Court Finds Professional Spam Litigator Guilty of Misdemeanor Idiocy
Gordon has testified that in 2006 he received no income that was not the result of a settlement of a dispute. He also testified that he has been filing lawsuits over commercial email since at least 2003. … He also admitted that his “clients”–apparently people to whom he provides email accounts–supply him with emails they deem are spam for him to use in his disputes, and that they get an unspecified percentage of the settlements.”
–Man, Oh Man, What a Racket, DIRECT, May 22, 2007
Spam litigation is not the stuff of which cottage industries are made. Just ask James Gordon who’s been ordered to pay attorneys’ fees and costs in the amount of $111,440 to Virtumundo, the email marketer he sued under the CAN-SPAM Act.
In his complaint, Gordon–whose only source of income for the past year was “settlements and disputes,” according to court documents–demanded damages of more than $20 million, claiming Virtumundo had buried him in some 13,800 unsolicited emails. Problem was, Gordon doesn’t operate a traditional ISP, and thus lacked legal standing to sue under CAN-SPAM. And so in May a U.S. district court in Washington state dismissed his claim, ruling Virtumundo was entitled to recover attorneys’ fees.
All $111,440 worth of them, according to the court decision released last week that adds insult to Gordon’s financial injury. “The court finds that the [plaintiff's] instant lawsuit is an excellent example of the ill-motivated, unreasonable and frivolous type of lawsuit that justifies an award of attorneys’ fees to defendants,” according to the decision. “The Court finds that the goal of deterrence is particularly relevant here. Plaintiffs should be deterred from further litigating their numerous other CAN-SPAM lawsuits now that they are aware of their lack of CAN-SPAM standing.”
Ironic, isn’t it? Especially given Virtumundo’s Spamhaus status.
“I believe this ruling represents the first time that a CAN-SPAM plaintiff has been ordered to pay attorneys’ fees and costs to a defendant,” Santa Clara University School of Law professor Eric Goldman wrote in a post to his blog. “As a result, it’s a leading example that courts can and do grow tired of bogus antimarketing lawsuits, and perhaps it will serve as an expensive warning to CAN-SPAM plaintiffs to ensure the merits of their lawsuit. As the court describes, Gordon runs a ‘spam business’–basically, a for-profit plaintiff litigation shop to go after spammers (the court also calls it a ‘litigation factory’). The court correctly notes that Congress really wasn’t trying to enable lots of private lawsuits from CAN-SPAM, so the risk of chilled plaintiffs is appropriate in this context.”