Motion for Default Judgment
IN THE UNITED STATES DISTRICT COURT FOR THE
NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
E360INSIGHT, LLC,
an Illinois Limited Liability Company, and
DAVID LINHARDT, an individual
Plaintiffs,
v.
THE SPAMHAUS PROJECT,
a company limited by guarantee and
organized under the laws of England, aka
THE SPAMHAUS PROJECT LTD,
Defendant.
PLAINTIFF’S MOTION FOR DEFAULT
JUDGMENT AND ORDER FOR PERMANENT INJUNCTION
Plaintiffs, e360Insight, LLC and David Linhardt (collectively Plaintiffs), by and through their attorneys, Synergy Law Group, LLC, respectfully requests that this court enter a judgment and issue a permanent injunction against Defendant The Spamhaus Project, aka The Spamhaus Project Ltd., (Defendant), resulting from Defendant’s default on August 23, 2006. In support of this motion, Plaintiffs state:
1. On July 20, 2006 the Honorable Phillip Bronstein, Judge of the Circuit Court of Cook County, issued a Temporary Restraining Order against Defendant. Judge Bronstein also ordered that discovery be expedited, and Plaintiffs served written discovery on Defendant on this same day.
2. On July 21, 2006 Defendant filed an Answer in the Circuit Court and also removed the matter to this Court pursuant to 28 U.S.C. § 1441.
3. On July 24, 2006 Defendant removed the then existing references to Plaintiffs e360Insight LLC and David Linhardt from its website.
4. On August 17, 2006 counsel for Defendant, Evan Brown, of Hinshaw & Culbertson, LLP, informed Plaintiffs’ counsel that: 1) He and his firm were withdrawing from representing Defendant because Defendant was releasing the Hinshaw & Culbertson firm and, to his knowledge, Defendant did not intend to obtain new counsel; 2) Defendant was seeking to withdraw its Answer to the Amended Complaint filed in the Circuit Court before Defendant removed this matter to this Court; and 3) Defendant would not be providing responses to the discovery propounded by Plaintiffs.
5. On August 17, 18 and 19, 2006 Defendant placed new references to Plaintiffs, specifically “E360 Insight”; E360Insight: Ravinia Hosting Company LLC”; “E360 Insight / e360data.com”; “e360Insight:bargaindepot.net / bargainshoppecorp.com”; “Discount Accessories aka e360data.com”; “Northgate Internet Services aka e360data.com”; and “E360 Insight / e360data.com: home base” on the Spamhaus website in contravention of the Circuit Court’s TRO by Defendant’s listing of e360 on the following Spamhaus webpages:
http://www.spamhaus.org/sbl/sbl.lasso?query=SBL26394
http://www.spamhaus.org/sbl/sbl.lasso?query=SBL45581
http://www.spamhaus.org/sbl/sbl.lasso?query=SBL45582
http://www.spamhaus.org/sbl/sbl.lasso?query=SBL45583
http://www.spamhaus.org/sbl/sbl.lasso?query=SBL45584
http://www.spamhaus.org/sbl/sbl.lasso?query=SBL45585
http://www.spamhaus.org/sbl/sbl.lasso?query=SBL45586
http://www.spamhaus.org/sbl/sbl.lasso?query=SBL45587
http://www.spamhaus.org/sbl/sbl.lasso?query=SBL45648
http://www.spamhaus.org/sbl/sbl.lasso?query=SBL45649
http://www.spamhaus.org/sbl/sbl.lasso?query=SBL45651
http://www.spamhaus.org/sbl/sbl.lasso?query=SBL45652
http://www.spamhaus.org/sbl/sbl.lasso?query=SBL45685.
6. On August 23, 2006 this matter was before the Court for status and for presentment of Plaintiffs’ Motions for Rules to Show Cause pertaining to Defendant’s violation of the Temporary Restraining Order, and Defendant’s failure to respond to Court Ordered discovery. Counsel for both parties appeared at this hearing.
7. At this hearing Defendant’s oral motion for leave to withdraw its answer to the complaint was granted. Defendant’s motion [docket entry Document 13] to withdraw the appearance of Evan Brown and Andrew Cripe as counsel for Defendant was also granted. Plaintiffs’ oral motion for entry of default against Defendant was also granted. Finally, the Court converted the then current Temporary Restraining Order to a Preliminary Injunction. (See docket entry Document 19.)
8. Plaintiff respectfully requests that judgment pursuant to Federal Rule of Civil Procedure 55 be entered against Defendant in the amount of $26,715,000.00 in damages and $40,695.55 in court costs and fees. The damages amount is supported by the facts contained in the accompanying affidavit of David Linhardt and also includes Plaintiffs’ request for punitive damages, which Plaintiffs respectfully submit should be an amount sufficient to punish Defendant for its past intentional and malicious conduct and deter Defendant from engaging in the same conduct in the future, $15,000,000.00. The fees and costs are supported by the facts contained in the accompanying affidavit of Bartly J. Loethen, counsel for plaintiffs.
9. Plaintiffs also respectfully request that the Court enter a Permanent Injunction requiring the following:
a. Defendant Spamhaus shall not ever take any action to cause email sent by Plaintiff e360 Insight, Plaintiff David Linhardt, or any affiliates, subsidiaries, or related companies owned or controlled by e360 Insight or Linhardt (collectively the “Plaintiff Parties”) to be blocked, delayed, altered, or interrupted in any way (including, without limitation, by listing Plaintiff Parties on Defendant’s website on the ROKSO list, within an SBL listing on Defendant’s website, using blacklisting technology in concert or conjunction with others, or taking any other action to cause any such interference) unless Spamhaus can demonstrate by clear and convincing evidence that Plaintiff Parties have violated CAN-SPAM or other relevant provisions of US law. Such clear and convincing evidence may only be shown after providing Plaintiff Parties an opportunity to review any alleged offending email, including a review of the email header and content (in its entirety), and providing Plaintiff Parties an opportunity to show the offending email was not sent in violation of US law to the satisfaction of a reasonable person. If such clear and convincing evidence is shown, then (and only then) may Spamhaus list the IP address (and only the IP address) from which the offending email was sent on its website. Spamhaus shall not list entire networks or ranges of IP addresses owned or operated by Plaintiffs simply because they are registered in the Plaintiff’s name or physical address without meeting the clear and convincing standard for the ip address in question.
b. Defendant Spamhaus shall also, within 5 business days of the date hereof, post on its website at both the main home page and at the ROKSO jump page, a message of 1 inch by 1 inch, the text of which is to be reasonably approved by Plaintiffs, and which, generally, indicates Plaintiffs were erroneously listed on the website as spammers, and that Plaintiffs are not spammers. Defendant Spamhaus shall leave such message on its site for a period of six months.
c. Defendant Spamhaus shall not contact (and shall not cause others to so contact) any customers or suppliers of the Plaintiff Parties in efforts to cause said customers or suppliers to cease doing business with Plaintiff Parties, nor shall Spamhaus contact (or cause others to so contact) customers or suppliers of Plaintiff Parties and allege or assert that Plaintiff Parties are “Internet Spammers” or other like term.
Respectfully submitted,
E360Insight, LLC. and David Linhardt
By: /s/ Joseph L. Kish
One of Their Attorneys
Bartly J. Loethen
Joseph L. Kish
Kristen M. Lehner
Synergy Law Group, LLC
730 West Randolph, 6th Floor
Chicago, Illinois 60661
Telephone: (312) 454-0015
Facsimile: (312) 454-0261
=================================
CERTIFICATE OF SERVICE
I hereby certify that on August 30, 2006 I electronically filed the foregoing document with the Clerk of the United States District Court for the Northern Division of Illinois using the CM/ECF system which will send notification of such filing to the following:
Evan D. Brown [ebrown@hinshawlaw.com]
Andrew B. Cripe [acripe@hinshawlaw.com]
Joseph L. Kish [jkish@synergylawgroup.com]
Kristen M. Lehner [klehner@synergylawgroup.com]
And I hereby certify that I have sent by Federal Express via International Priority the document to the following non CM/ECF participants: The Spamhaus Project, aka The Spamhaus Project Ltd. .
And I hereby certify that I have caused to be hand delivered the document to the following non CM/ECF participants: The Spamhaus Project, aka The Spamhaus Project Ltd.
________/s/ Kristen M. Lehner__________
Kristen M. Lehner
Linhardt Affidavit in Support
This is David Linhardt's affidavit in support of e360insight LLC's Motion for Default Judgment.
===============================
STATE OF ILLINOIS
COUNTY OF COOK
AFFIDAVIT OF DAVID LINHARDT I, David Linhardt, under oath states as follows:
1. I am the President of e360Insight, LLC (e360). I am 36 years old and competent to testify. I have personal knowledge of the matters stated in this affidavit and can and will truthfully testify as to those matters.
2. e360 is an email based marketing company whose business practices have, at all times, complied with federal and state requirements and standards pertaining to the sending of commercial email, including the Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003, 15 U.S.C. § 7701 (CAN-SPAM).
3. e360 uses Internet Service Providers (ISPs) to facilitate its marketing efforts on behalf of its business partners. At all times relevant to this case, e360 has complied with all Accepted Use Policies and Terms Of Service agreements stated by the ISPs.
4. e360 does not engage in "spamming". The internet marketing in which e360 engages employs a variety of permission processes that e360 controls, and that its marketing partners use, to obtain permission and consent from, and provide notice to, the consumers that receive the email messages.
5. Before December 2003, e360 had never been removed from any ISP for violating its Authorized Use Policy, Terms of Service, or any other policies and procedures.
6. Spamhaus acts as a blacklisting agent for ISPs, who purchase Spamhaus' blocking technology in order to police their Accepted Use Policies and Terms of Use Agreements for compliance. ISPs do this so they can assure their customers that they will not be inundated by unwanted email solicitations and messages.
7. One of the automated lists that Spamhaus generates is the ROKSO list.
8. Spamhaus notes on its website: "ROKSO is a "3 strikes" register. We don't list inadvertent spammers or newbie marketing departments spamming 'by mistake'. To get to 3 strikes (i.e.: 3 terminations for spam offences such as emailing spam, hosting spammers, selling spamware) requires a very determined spam outfit. Being thrown off an ISP takes a lot of doing, nobody is thrown off an ISP without having been given ample warnings and chances to stop violating the ISPs Terms of Service. Being thrown off ISPs *twice * for the spam offences means the spmnmer is determined, knows the consequences, and has actually signed up to a new ISP with the specific intention of breaking the ISPs Terms of Service. Being thrown off *three* ISPs for spam offences means the spmnmer is a committed hard-line spam operation which regards ISPs as simply throwaway resources." Id.
9. On its website, Spamhaus promotes the efficacy of the ROSKO list by noting that it includes only serious offenders: "ROKSO is a register of known hard-line professional spam operations (bulk emailers and "spam gangs') that have been thrown off Internet Service Providers 3 times or more for spamming or spam-related offenses. As the ROKSO database collates information and evidence on each gang, it's an invaluable tool for ISP Abuse Desks to vet prospective customers. For the legal departments of ISPs who are looking for the information linking the spam they get to the spammers sending it. Global Law Enforcement Agencies also use the data to help track down and bring to justice spammers who are violating any number of laws when spamming." See http://www.spamhaus.org/faq/answers.lasso?section=ROKSO%20FAQ. Thus, by placing e360 and Linhardt on the ROKSO, even erroneously, Spamhaus can justify its heavy-handed tactics to third parties by telling them that they are dealing with a "hard-line" professional spam operation. As Spamhaus notes: "No ISP with any sense will allow ROKSO spammers on their network." See http://www.spamhaus.org/rokso/about.html.
10. In December 2003, Spamhaus listed me and e360 on the ROKSO list.
11. Neither I nor e360 had ever been terminated from, or "thrown off of' any ISPs for violating any Acceptable Use Policy, Terms Of Service, or any other policy or procedure prior to the ROKSO listing.
12. I immediately brought Spamhaus' error to its attention. I made numerous additional attempts to have my and e360's names removed from the ROKSO list by communicating the problem directly to Spamhaus. Spamhaus refused and continued to keep me and e360 on the ROKSO list.
13. In addition to placing me and e360 on the ROKSO list, and refusing to remove me and e360 from it, Spamhaus continued to directly cause damage to e360 and me by coercing and intimidating e360's business partners by conveying that continued involvement with e360 and me by such parties would have dire consequences for the partner's ability to continue engaging in e-commerce on the internet.
14. Spamhaus facilitates these threats by labeling the partner a spammer solely due to its association with e360 and me. Spamhaus then indiscriminately blocks all of the partner's e-mail from being sent regardless of its content. This action effectively puts partner out of business and prevents their customers from receiving important and legitimate email from the partner. Only when an e360 partner would terminate its agreement(s) with e360 and me would Spamhaus release the block.
15. Based on the circumstances stated above, e360 and I obtained a Temporary Restraining Order on July 20, 2006.
16. Defendant removed the then occurring references to e360 and me from the Spamhaus website on July 24, 2006.
17. Defendant subsequently removed the litigation to the Northern District of Illinois and answered the complaint.
18. On August 17, 18 and 19, 2006 Defendant placed new references to Plaintiffs, specifically "E360 Insight"; ` E360Insight: Ravinia Hosting Company LLC"; "E360Insight/e360data.com"; "e360lnsight:bargaindepot.net/bargainshoppecorp.com' ; "Discount Accessories aka e360data.com"; "Northgate Internet Services aka e360data.com"; and "E360 Insight/e360data.com: home base" on the Spamhaus website. These references are located on the Spamhaus website at the following internet addresses:
http://www.spamhaus.org/sbl/sbl.lasso?query=SBL26394
http://www.spamhaus.org/sbl/sbl.lasso?query=SBL45581
http://www.spamhaus.org/sbl/sbl.lasso?query=SBL45582
http://www.spamhaus.org/sbl/sbl.lasso?query=SBL45583
http://www.spamhaus.org/sbl/sbl.lasso?query=SBL45584
http://www.spamhaus.org/sbl/sbl.lasso?query=SBL45585
http://www.spamhaus.org/sbl/sbl.lasso?query=SBL45586
http://www.spamhaus.org/sbl/sbl.lasso?query=SBL45587
http://www.spamhaus.org/sbl/sbl.lasso?query=SBL45648
http://www.spamhaus.org/sbl/sbl.lasso?query=SBL45649
http://www.spamhaus.org/sbl/sbl.lasso?query=SBL45651
http://www.spamhaus.org/sbl/sbl.lasso?query=SBL45652
http://www.spamhaus.org/sbl/sbl.lasso?query=SBL45685
(True and correct copies of these pages are attached to this affidavit as Exhibit C.)
19. Discount Accessories, a sister company of e360 and a company owned by me was also listed as new Spamhaus blacklist references, which listings include references to me personally.
20. Ravinia Hosting Company, LLC a sister company of e360 and a company owned by me was also listed as new Spamhaus blacklist references, which listings include references to me personally.
21. Bargaindepot.net/Bargainshoppecorp.com, a division of e360 was also listed as new Spamhaus blacklist references, which listings include references to me personally.
22. The webpages referenced in paragraph 23 are all false because they connote that e360 and I are engaged in activity that is illegal, violates ISP's Acceptable Use Policy, Terms Of Service, and other policies or procedures. e360, Discount Accessories, and I do not engage in any such activity.
23. The webpages referenced in paragraph 18 connote that e360 and I are "Spammers", which we are not.
24. The webpages referenced in paragraph 18 are also false in the following specific ways:
SBL45581, SBL45582, SBL45583, SBL 45584, SBL45648 and SBL45649 are all used to send messages to those "opting-in" to receive messages from a partner of e360 or one of the other listed entities. All of these listings comply with CAN-SPAM, none are unsolicited, and none of these listings have ever been associated with Brian Haberstroh or Atriks.
25. The webpages referenced in paragraph 18 are also false in the following specific ways:
The ISP sending domains listed in SBL 45585, SBL 45586, and SBL 45587 were never used or controlled by me and were instead registered in error to Discount Accessories by the ISP. There is no possible way these Internet addresses were blocked due to e360 (or another listed entity owned by me) sending email messages, as I have never had the ability to send email from such Internet addresses.
26. The webpages referenced in paragraph 18 are also false in the following specific ways:
SBL45651 is a listing that only has names which are "double confirmed," such that the user has elected, by clicking a link for a second time to provide an additional affirmative consent, to receive the message. Thus, these listings conform to not only CAN-SPAM as well as all ISP Acceptable Use Policy, Terms Of Service and other policies and procedures, they conform to Spamhaus' own guidelines for what are acceptable email transmissions that are exempt form listing on the Spamhaus website. None of these listings have ever been associated with Brian Haberstroh or Atriks.
27. The webpages referenced in paragraph 18 are also false in the following specific ways:
SBL45652 is for an IP address that e360 has not owned or controlled since at least July 24, 2006. Thus the listing referenced could not have arisen as is indicated in the listing of August 18, 2006, as is alleged by Defendant.
28. The webpages referenced in paragraph 18 are also false in the following specific ways:
SBL45685 references the static IP address for my personal cable modem located at my house. It is not used for transmitting any messages pertaining to e360 business except internally and no bulk email has ever been sent from this address. Thus, this listings conforms to not only CAN SPAM as well as all ISP Acceptable Use Policy, Terms Of Service and other policies and procedures, it conforms to Spamhaus' own guidelines for what are acceptable email transmissions that are exempt form listing on the Spamhaus website. This IP address has never been associated with Brian Haberstroh or Atriks.
29. The webpages referenced in paragraph 18 are also false in the following specific ways:
SBL26394 conforms to CAN-SPAM as well as all ISP Acceptable Use policy, Terms Of Service and other policies and procedures.
30. The false listings and negative connotations arising therein have caused our sending of commercial email messages to cease. Thus we are unable to realize revenue from our business. Further, such listings are jeopardizing our data lines, our relationship with our ISPs, and our ability to earn revenue from legitimate business activity.
31. e360 and I have suffered disastrous consequences as a direct result of being placed on the Spamhaus lists and being subjected to Spamhaus' tactics. e360 generates revenue based on the volume of emails it sends to people on its client lists who have opted-in (that is, requested or agreed to receive the emails). e360 cannot generate this revenue when Spamhaus blocks e360 from sending the messages.
32. e360 and I also have had active and pending contracts cancelled as a result of Spamhaus' conduct. Contracts that have been cancelled include SmartBargains, Vendare Media, and OptinBig. I have calculated the loss of revenue from having these active and pending contracts cancelled as a result of Spamhaus' conduct to be $2,465,000.00.
33. e360 and I also have lost numerous opportunities to obtain future work as a result of Spamhaus' conduct. Lost business opportunities include Net Blue, Cogent, Habeas, Yipes. I have determined that the lost value of the business as a result of the inability to monetize the revenue potential from the company and in the lost enterprise value to be at least $9,250,000.
34. The calculation of lost enterprise value results from the following consideration:
businesses operating proprietary opt-in email marketing lists are valued at twice the annual revenue of the business. Similarly, most email marketing companies with opt-in lists are valued at somewhere between $0.25 and $0.50 per active unique opt-in email address. For most of our competition, these valuations are roughly equivalent. Due to our trouble in sending from our list due to the Spamhaus listings, our revenue is roughly $1,000,000 per year, thus the valuation based upon revenue is $2,000,000; despite the fact that we have 45 million unique opt-in email addresses, which would equate to a valuation in a range of $11,250,000 to $22,500,000, thus a reduced valuation due to the inability to monetize our opt-in list of at least $9,250,000.
35. Over and above financial losses stated above, e360 and my reputation in the business community has suffered significantly and continues to suffer, all as a direct consequence of Spamhaus' wrongful acts. In my professional experience, there is nothing more damaging to an Internet marketing business than to be labeled a "spammer". I believe my and e360's reputation in the Internet marketing industry has been damaged in an amount equal to at least $9,250,000, as is detailed above.
36. The fact that e360 and Linhardt remain on the ROKSO list, and remain on the SBL list, make it increasingly difficult and, in some cases, impossible to purchase bandwidth from ISPs, without which e360 simply ceases to be able to operate.
37. I further believe that e360 and I should be awarded punitive damages as well, in the amount of $15,000,000.00 given Defendant's intentional conduct, disregard for my and e360's rights and the laws of the United States. Defendant knew as early as December of 2003 that they had wrongfully listed e360 and me. Rather than taking any corrective measures, Defendant not only continued posting the incorrect listings of e360 and me, it posted additional listings of e360 and me, none of which were posted in compliance with Defendant's own guidelines, United States laws or any foreign law.
38. After the filing of the litigation in this matter and after the entry of the temporary restraining order against Spamhaus, Defendant removed the improper listings temporarily, but rather than provide discovery materials and comply with the rule of United States law, Spamhaus chose to enter new listings, all of which (as detailed above) are false in complete disregard for the orders of United States courts.
39. Defendant called e360 and me "spammers" even though Defendant knew that e360 and I complied with all recognized laws as well as the policies and procedures of the ISPs that e360 and I were involved with and were never accused of violating any Acceptable Use Policy, Terms Of Service, or any other policy or procedure prior to the wrongful ROKSO listing.
40. In addition to the damages sought above, I seek a permanent injunction in order to stop Defendant's wrongful, intentional and malicious conduct from continuing in the future. Defendant has previously disregarded the Temporary Restraining Order so I fear that it might do so in the future.
41. If Defendant does not obey the orders for injunctive relief, the only way to force them to cease the offending action would be to cause a registry of Internet domain names to require the domain name of Defendant (www.spamhaus.org) to be turned over to a third party to ensure compliance with the court's order.
Futher Affiant Sayeth Naught.
________________________________
David Linhardt
Signed and Sworn to before me on
this 30th day of August 2006
________________________________
Notary Public
My commission expires on 2/16/09.
OFFICIAL SEAL
KATHLEEN M SMITH
NOTARY PUBLIC - STATE OF ILLINOIS
MY COMMISSION EXPIRES: 2/16/09
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Loethen Affidavit in Support
STATE OF ILLINOIS
COUNTY OF COOK
AFFIDAVIT OF BARTLY J. LOETHEN
I, Bartly J. Loethen, under oath states as follows:
1. I am a partner with the law firm of Synergy Law Group, L.L.C. which serves as counsel to Plaintiffs e3601nsight, LLC and David Linhardt in this case.
2. Attached to this affidavit are true and correct copies of the invoices reflecting the work performed by Synergy Law Group, L.L.C. through the month of July, 2006 pertaining to obtaining a Temporary Restraining Order and Preliminary Injunction, and obtaining and enforcing the judgment against Defendant The Spamhaus Project, aka The Spamhaus Project Ltd.
3. In addition to the bills I and the attorneys referenced below have performed work on this matter in the month of August, 2006, for which bills have not yet been generated. Based on my review of written time sheets, I estimate that Plaintiffs will incur $11,602.50 in attorneys fees and costs for the month of August.
4. My standard billing rate is $275.00 per hour. I devoted 9.3 hours to the matters pertaining to obtaining a Temporary Restraining Order and Preliminary Injunction, and obtaining and enforcing the judgment against Defendant The Spamhaus Project, aka The Spamhaus Project Ltd.
5. I was assisted in this case by Joseph L. Kish, a Litigation Partner at Synergy Law Group, L.L.C. Mr. Kish's standard billing rate is $275.00. He devoted 69.9 hours to the matters pertaining to obtaining a Temporary Restraining Order and Preliminary Injunction, and obtaining and enforcing the judgment against Defendant The Spamhaus Project, aka The Spamhaus Project Ltd.
6. I was also assisted in this case by an Associate Attorney at Synergy Law Group, L.L.C. Kristen Lehner. Ms. Lehner's standard billing rate is $175.00 per hour. She devoted 21.2 hours to the matters pertaining to obtaining a Temporary Restraining Order and Preliminary Injunction, and obtaining and enforcing the judgment against Defendant The Spamhaus Project, aka The Spamhaus Project Ltd.
7. I was also assisted in this case by a Research Clerk at Synergy Law Group, L.L.C. Claire Weinstein. Ms. Weinstein's standard billing rate is $85.00 per hour. She devoted 8.7 hours to the matters pertaining to obtaining a Temporary Restraining Order and Preliminary Injunction, and obtaining and enforcing the judgment against Defendant The Spamhaus Project, aka The Spamhaus Project Ltd.
8. I was also assisted in this case by a Paralegal at Synergy Law Group, L.L.C. Curtis Hill. Ms. Hill's standard billing rate is $75.00 per hour. He devoted 11.9 hours to the matters pertaining to obtaining a Temporary Restraining Order and Preliminary Injunction, and obtaining and enforcing the judgment against Defendant The Spamhaus Project, aka The Spamhaus Project Ltd.
9. In addition, the invoices reflect that reasonable necessary costs incurred by Synergy Law Group LLC on behalf of Plaintiffs e360lnsight, LLC and David Linhardt total $1971.05. These costs include filing and process service fees, transportation for court appearances and mailings to the United Kingdom, where Defendant The Spamhaus Project, aka The Spamhaus Project Ltd. is located.
10. The total attorneys fees, costs and expenses incurred by Synergy Law Group, L.L.C. related to the matters pertaining to obtaining a Temporary Restraining Order and Preliminary Injunction, and obtaining and enforcing the judgment against Defendant The Spamhaus Project, aka The Spamhaus Project Ltd. in this case equals $40,695.55.
Further Affiant Sayeth Naught.
Bartly J. Loethen
Signed and Sworn to before me on
30th day of August 2006
(Seal)
My commission expires 2/16/09
OFFICIAL SEAL
KATHLEEN M SMITH
NOTARY PUBLIC - STATE OF ILLINOIS
MY COMMISSION EXPIRES:2/16/09
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Proposed Order
IN THE UNITED STATES DISTRICT COURT FOR THE
NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
E360INSIGHT, LLC,
an Illinois Limited Liability Company, and
DAVID LINHARDT, an individual
Plaintiffs,
v.
THE SPAMHAUS PROJECT,
a company limited by guarantee and
organized under the laws of England, aka
THE SPAMHAUS PROJECT LTD,
Defendant.
PROPOSED ORDER
This matter coming before the Court upon Plaintiffs’ motion for judgment on the default of Defendant, all Parties given due notice, and the Court being fully advised in the premises; THIS COURT FINDS THAT:
As a result of the default of Defendant, and upon showing of harm to Plaintiffs, Plaintiffs are entitled to relief sought in their complaint for monetary and equitable relief and for costs incident to the case, specifically
1. Defendant has wrongfully placed Plaintiffs on its blacklist of companies who have sent “spam” email.
2. Defendant has tortiously interfered with Plaintiffs contracts with its suppliers and customers.
3. Defendant has tortiously interfered with Plaintiffs prospective economic advantage by blocking email Plaintiffs have a right to send.
4. Defendant has defamed Plaintiffs by publishing false statements about Plaintiffs on its website.
5. Plaintiff is entitled to punitive damages as a result of the reckless and intentional actions of Defendant.
IT IS ORDERED:
For all of the foregoing reasons, the Court grants Plaintiffs e360Insight, LLC and David Linhardt’s Motion For Default Judgment And Order For Permanent Injunction as follows:
A. Defendant Spamhaus shall not ever take any action to cause email sent by Plaintiff e360 Insight, Plaintiff David Linhardt, or any affiliates, subsidiaries, or related companies owned or controlled by e360 Insight or Linhardt (collectively the “Plaintiff Parties”) to be blocked, delayed, altered, or interrupted in any way (including, without limitation, by listing Plaintiff Parties on Defendant’s website on the ROKSO list, within an SBL listing on Defendant’s website, using blacklisting technology in concert or conjunction with others, or taking any other action to cause any such interference) unless Spamhaus can demonstrate by clear and convincing evidence that Plaintiff Parties have violated CAN-SPAM or other relevant provisions of US law. Such clear and convincing evidence may only be shown after providing Plaintiff Parties an opportunity to review any alleged offending email, including a review of the email header and content (in its entirety), and providing Plaintiff Parties an opportunity to show the offending email was not sent in violation of US law to the satisfaction of a reasonable person. If such clear and convincing evidence is shown, then (and only then) may Spamhaus list the Internet Provider (IP) address, and only the IP address, from which the offending email was sent on its website. Spamhaus shall not list entire networks or ranges of IP addresses owned or operated by Plaintiffs simply because they are registered in the Plaintiff’s name or physical address without meeting the clear and convincing standard for the IP address in question.
B. Defendant Spamhaus shall also, within 5 business days of the date hereof, post on its website at both the main home page and at the ROKSO jump page, a message of 1 inch by 1 inch, the text of which is to be reasonably approved by Plaintiffs, and which, generally, indicates Plaintiffs were erroneously listed on the website as spammers, and that Plaintiffs are not spammers. Defendant Spamhaus shall leave such message on its site for a period of six months.
C. Defendant Spamhaus shall not contact (and shall not cause others to so contact) any customers or suppliers of the Plaintiff Parties in efforts to cause said customers or suppliers to cease doing business with Plaintiff Parties, nor shall Spamhaus contact (or cause others to so contact) customers or suppliers of Plaintiff Parties and allege or assert that Plaintiff Parties are “Internet Spammers” or other like term.
D. Defendant is ordered to pay Plaintiffs Two Million Four Hundred Sixty Five Thousand Dollars ($2,465,000) for lost business as a result of the tortious interference with Plaintiffs’ contracts.
E. Defendant is ordered to pay Plaintiffs and additional Nine Million Two Hundred Fifty Thousand Dollars ($9,250,000) for lost revenue resulting from the interference with Plaintiffs’ prospective economic advantage due to Defendant’s blocking revenue producing email messages to consumers seeking those messages, and for Defendant’s defamation of Plaintiffs.
F. Defendant is ordered to pay Plaintiffs Fifteen Million Dollars ($15,000,000) as punitive damages as a result of Defendant’s intentional and reckless actions toward Plaintiffs.
G. Defendant is ordered to pay Plaintiffs Forty Thousand Six Hundred Ninety Five Dollars and Fifty Five Cents ($40,695.55) for legal fees and other costs incident to this action.
ENTERED: September ___, 2006
_____________________________________
CHARLES P. KOCORAS
UNITED STATES DISTRICT JUDGE
Docket Entry: Hearing on Default Judgment
UNITED STATES DISTRICT COURT
FOR THE Northern District of Illinois − CM/ECF LIVE, Ver 2.5
Eastern Division
e360 Insight, LLC, et al.
Plaintiff,
v. Case No.: 1:06−cv−03958
Honorable Charles P. Kocoras
Spamhaus Project, The
Defendant.
NOTIFICATION OF DOCKET ENTRY
This docket entry was made by the Clerk on Tuesday, September 12, 2006:
MINUTE entry before Judge Charles P. Kocoras :Motion hearing held on 9/12/2006. Plaintiff's motion [20] for default judgment and order for permanent injunction is taken under advisement. Mailed notice(sct, )
ATTENTION: This notice is being sent pursuant to Rule 77(d) of the Federal Rules of Civil Procedure or Rule 49(c) of the Federal Rules of Criminal Procedure. It was generated by CM/ECF, the automated docketing system used to maintain the civil and criminal dockets of this District. If a minute order or other document is enclosed, please refer to it for additional information.
For scheduled events, motion practices, recent opinions and other information, visit our web site at www.ilnd.uscourts.gov.
Final Judgment
United States District Court
Northern District of Illinois
Eastern Division
e360 Insight, LLC et al JUDGMENT IN A CIVIL CASE
v. Case Number: 06 C 3958
The Spamhaus Project
- Jury Verdict. This action came before the Court for a trial by jury. The issues have been
tried and the jury rendered its verdict. - Decision by Court. This action came to trial or hearing before the Court. The issues have been tried or heard and a decision has been rendered.
IT IS HEREBY ORDERED AND ADJUDGED that default judgment is entered in favor of the plaintiffs and against defendant for compensatory damages totaling $11,715,000.00, and $1,971.05 in litigation costs.
The Court enters a permanent injunction as follows:
1. Spamhaus shall not take any action to cause email sent by Plaintiffs or their affiliates, subsidiaries, or related companies owned or controlled by Plaintiffs to be blocked, delayed, altered, or interrupted in any way (including, without limitation, by listing Plaintiffs on Spamhaus’s ROKSO list, within an SBL listing on Spamhaus’s website, using blacklisting technology in concert or conjunction with others, or taking any other action to cause any such interference) unless Spamhaus can demonstrate by clear and convincing evidence that Plaintiffs have violated relevant United States law. Such clear and convincing evidence may only be shown after proving Plaintiffs with an opportunity to review any alleged offending email, including a review of the email header and content (in its entirety), and providing Plaintiffs with an opportunity to show the offending email was not sent in violation of United States law to the satisfaction of a reasonable person. If such clear and convincing evidence is shown, then and only then may Spamhaus list the Internet Protocol (IP) address, and only the IP address, from which the offending email was sent on its website.
2. Spamhaus shall not list entire networks or ranges of IP addresses owned or operated by Plaintiffs simply because they are registered in the Plaintiffs’ names or physical addresses without meeting the clear and convincing standard for the IP address in question.
3. Spamhaus shall post, within five business days of the date of this order, on its website at both the main home page and at the ROKSO jump page, a message of 1 inch by 1 inch, the text of which is to be reasonably approved by Plaintiffs, and which, generally, indicates that Plaintiffs were erroneously listed on the website as spammers and that Plaintiffs are not spammers.
Defendant Spamhaus shall leave such message on its site for a period of six months.
4. Spamhaus shall not contact or cause others to contact any customers or suppliers of the Plaintiffs in efforts to cause said customers or suppliers to cease doing business with Plaintiffs.
5. Spamhaus shall not contact or cause others to contact any customers or suppliers of Plaintiffs and allege or assert that Plaintiffs are spammers or other like term.
Michael W. Dobbins, Clerk of Court
Date: September 13, 2006 ________________________________
/s/ Stephen C. Tokoph, Deputy Clerk
Appeal of Default Judgment
This is the Notice of Appeal to the 7th Circuit Court of Appeals in e360insight, LLC. v. The Spamhaus Project, Ltd..
Current docket sheet
General Docket
US Court of Appeals for the Seventh Circuit
Court of Appeals Docket #: 06-3779 Filed: 10/16/06
Nsuit: 3380 Oth Per Property Damage-FedQue
e360 Insight, et al v. The Spamhaus Project
Appeal from: United States District Court
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
Lower court information:
District: 0752-1 : 06 C 3958
Ordering Judge: Charles P. Kocoras, Judge
Court Reporter: Joene Hanhardt, Court Reporter
Date Filed: 7/21/06
Date order/judgment: 9/13/06
Date NOA filed: 10/13/06
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
Fee status: paid
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
Prior cases:
None
Current cases:
Lead Member Start End
Consolidated:
06- 3779 06- 4169 11/30/06
Docket as of May 17, 2007 11:01 pm Page 1
06-3779 e360 Insight, et al v. The Spamhaus Project
E360 INSIGHT, an Illinois Bartly J. Loethen
Limited Liability Company 314/454-0015
Plaintiff - Appellee Sixth Floor
[COR LD NTC ret]
SYNERGY LAW GROUP
730 W. Randolph Street
Chicago, IL 60661
DAVID LINHARDT Bartly J. Loethen
Plaintiff - Appellee (See above)
[COR LD NTC ret]
v.
THE SPAMHAUS PROJECT, a Matthew M. Neumeier
Company Limited by Guarantee FAX 312/264-0361
and Organized Under the Laws 312/846-5640
of England also known as THE Suite 3400
SPAMHAUS PROJECT, LIMITED [COR LD NTC ret]
Defendant - Appellant HOWREY, SIMON, ARNOLD & WHITE
321 N. Clark Street
Chicago, IL 60611-4714
USA
Docket as of May 17, 2007 11:01 pm Page 2
06-3779 e360 Insight, et al v. The Spamhaus Project
e360 INSIGHT, an Illinois Limited
Liability Company and DAVID LINHARDT,
Plaintiffs - Appellees
v.
THE SPAMHAUS PROJECT, a Company Limited by Guarantee and
Organized Under the Laws of England also known as THE
SPAMHAUS PROJECT, LIMITED,
Defendant - Appellant
Docket as of May 17, 2007 11:01 pm Page 3
06-3779 e360 Insight, et al v. The Spamhaus Project
10/16/06 Private civil case docketed. [06-3779] [2036150-1]
Transcript information sheet due 10/26/06. Appellant's
brief due 11/27/06 for The Spamhaus Project. Docketing
Statement due 10/20/06. (amyd) [06-3779]
10/16/06 [06-3779] ROA from No. Dist. of Il., E. Div. due 11/3/06.
(amyd) [06-3779]
10/17/06 Filed Seventh Circuit Transcript Information Sheet by
Matthew M. Neumeier for Appellant The Spamhaus Project.
[06-3779] [2036150-1] (kell) [06-3779]
10/20/06 Filed Appellant The Spamhaus Project docketing statement.
[06-3779] [2037931-1] (josh) [06-3779]
10/23/06 Filed Seventh Circuit Transcript Information Sheet by
Carrie A. Fino for Appellant The Spamhaus Project.
[06-3779] [2036150-1] (juli) [06-3779]
10/23/06 ORDER: IT IS ORDERED that defendant-appellant file a
supplemental statement of jurisdiction listing the
citizenship of all members of plaintiff e360 Insight, LLC.
The statement is due on or before October 30, 2006.
[2036150-1] DW [06-3779] (See order for further details)
Statement due 10/30/06 for The Spamhaus Project. (juli)
[06-3779]
10/31/06 Disclosure Statements filed by Matthew M. Neumeier (lead
counsel), Carrie A. Fino, Stephen M. Geissler and Craig C.
Martin for Appellant The Spamhaus Project. [06-3779]
[2036150-1] (juli) [06-3779]
11/2/06 ORDER: The court, on its own motion, orders attorney
Matthew M. Neumeier to show cause for his failure to
respond to the court s order of October 23, 2006. Attorney
Neumeier shall file his response on or before November 9,
2006. Counsel is advised that failure to respond may result
in monetary or disciplinary sanctions. [2036150-1] DW
[06-3779] Response to showcause due 11/9/06 for Matthew M.
Neumeier. (juli) [06-3779]
11/3/06 ORDER: Pursuant to Circuit Rule 33, briefing will proceed
as follows: [2036150-1] SCO [06-3779] Appellant's brief due
12/22/06 for The Spamhaus Project. Appellee's brief due
1/22/07 for David Linhardt, for e360 Insight. Appellant's
reply brief due 2/5/07 for The Spamhaus Project. (juli)
[06-3779]
11/6/06 Filed response to order to showcause by Matthew M. Neumeier
for Appellant The Spamhaus Project. [06-3779] [2043342-1]
(hudk) [06-3779]
11/6/06 Filed Appellant The Spamhaus Project supplemental statement
of jurisdiction. [06-3779] [2036150-1] (amyd)
Docket as of May 17, 2007 11:01 pm Page 4
06-3779 e360 Insight, et al v. The Spamhaus Project
[06-3779]
11/9/06 ORDER re: RESPONSE TO SHOW CAUSE ORDER DATED NOVEMBER 2,
2006 filed by defendant-appellant on November 6, 2006, IT
IS ORDERED that the Rule to Show Cause is DISCHARGED.
[2043342-1] DW [06-3779] (juli) [06-3779]
11/15/06 Original record on appeal filed. Contents of record: 1 vol.
pleadings. [06-3779] [2045920-1] (bria) [06-3779]
11/28/06 Supplemental record on appeal filed. Contents of record: 4
vol. transcripts. [06-3779] [2049139-1] (dave)
[06-3779]
12/4/06 Filed motion by Appellant The Spamhaus Project in 06-3779,
Appellant The Spamhaus Project in 06-4169 to consolidate
cases. [2051670-1] [06-3779, 06-4169] (juli)
[06-3779 06-4169]
12/5/06 ORDER: The court orders these appeals CONSOLIDATED for
purposes of briefing and disposition. The briefing schedule
is as follows: [2051160-1] DW [06-3779, 06-4169]
Appellant's brief due 1/9/07 for The Spamhaus Project in
06-3779, for The Spamhaus Project in 06-4169. Appellee's
brief due 2/8/07 for David Linhardt in 06-3779, for e360
Insight in 06-3779, for David Linhardt in 06-4169, for e360
Insight in 06-4169. Appellant's reply brief due 2/22/07 for
The Spamhaus Project in 06-3779, for The Spamhaus Project
in 06-4169. (juli) [06-3779 06-4169]
12/5/06 ORDER: IT IS ORDERED that appellant file a supplemental
statement of jurisdiction indicating the state in which
Maverick Direct Marketing Solutions, Inc. has its principal
place of business. The statement is due on or before
December 12, 2006. (See order for further detail.) DW
[06-4169] [2036150-1] Appellant's statement or declaration
shall be filed on or before 12/12/06 for The Spamhaus
Project. (juli) [06-4169]
12/6/06 ORDER issued DENYING motion to consolidate cases as moot.
These appeals were consolidated on December 5, 2006.
[2051670-1] DW [06-3779, 06-4169] (juli) [06-3779 06-4169]
12/12/06 ORDER: Pursuant to Circuit Rule 33, the briefing schedule
is modified as follows: [2051160-1] SCO [06-3779, 06-4169]
Appellant's brief due 1/23/07 for The Spamhaus Project in
06-3779, for The Spamhaus Project in 06-4169. Appellee's
brief due 2/22/07 for David Linhardt in 06-3779, for e360
Insight in 06-3779, for David Linhardt in 06-4169, for e360
Insight in 06-4169. Appellant's reply brief due 3/8/07 for
The Spamhaus Project in 06-3779, for The Spamhaus Project
in 06-4169. (juli) [06-3779 06-4169]
Docket as of May 17, 2007 11:01 pm Page 5
06-3779 e360 Insight, et al v. The Spamhaus Project
12/12/06 Filed Seventh Circuit Transcript Information Sheet by
Matthew M. Neumeier for Appellant The Spamhaus Project in
06-4169. [06-4169] [2036150-1] (juli) [06-4169]
12/12/06 Supplemental Statement of Jurisdiction filed by Appellant
The Spamhaus Project in 06-4169. [06-4169] [2055197-1]
(juli) [06-4169]
12/13/06 Disclosure Statement filed by Bartly J. Loethen (as lead
counsel) and Joseph L. Kish for Appellee David Linhardt,
Appellee e360 Insight in 06-3779. [06-3779] [2051160-1]
(juli) [06-3779]
12/13/06 Disclosure Statement filed by Stephen M. Geissler for
Appellant The Spamhaus Project in 06-4169. [06-4169]
[2036150-1] (juli) [06-4169]
1/8/07 ORDER: Pursuant to Circuit Rule 33, briefing will proceed
as follows: [2051160-1] SCO [06-3779, 06-4169] Appellant's
brief due 2/21/07 for The Spamhaus Project in 06-3779, for
The Spamhaus Project in 06-4169. Appellee's brief due
3/23/07 for David Linhardt in 06-3779, for e360 Insight in
06-3779, for David Linhardt in 06-4169, for e360 Insight in
06-4169. Appellant's reply brief due 4/6/07 for The
Spamhaus Project in 06-3779, for The Spamhaus Project in
06-4169. (fern) [06-3779 06-4169]
2/21/07 Filed 15c appellant's brief by The Spamhaus Project in
06-3779, The Spamhaus Project in 06-4169. Disk filed.
[06-3779, 06-4169] [0-0] (josh) [06-3779 06-4169]
2/21/07 Filed 10c appendix by Appellant The Spamhaus Project in
06-3779, Appellant The Spamhaus Project in 06-4169.
[06-3779, 06-4169] [2077110-1] (josh) [06-3779 06-4169]
2/28/07 Filed motion by Apexix AG; Beyond Security, Inc.'
Brandenburg Internet Working; Bright Wings, Inc.;
Changeip.com; Coalition against Unsolicited Commerical
Email (CAUCE) - US; Datran Media Corp.; EMAILLABS; Michael
Geist; Habeas, Inc.; Internet Law Group. PLLC; INNOVYX,
Inc.; Internet Tools, Inc.; Institute for SPAM and Internet
Public Policy (ISIPP); Chris Lewis; John Levine; Mailshell
Inc.; MV Communications, Inc.; Return Path, Inc.; Secure
Computing Corp.; Snertsoft; Spin S.R.L.; SURBL; Talbix,
Inc.; Unspam Technologies, Inc.; Paul Vixie; Webmail.us,
Inc.; Whizardries, Inc.; and Derek Wyatt; for leave to file
their amicus brief in support of defendant-appellant
Reverseal. [2079754-1] 15c amicus curiae tendered. [0-0]
[06-3779, 06-4169] (kell) [06-3779 06-4169]
Docket as of May 17, 2007 11:01 pm Page 6
06-3779 e360 Insight, et al v. The Spamhaus Project
3/5/07 ORDER re: Motion to file amicus curiae brief in support of
appellant and reversal. GMM [06-3779, 06-4169] Matthew B.
Prince, counsel for the potential amici curiae, file a
supplemental statement on or before March 8, 2007 hat
explains whether the John Marshall Law School has
authorized him to use its name in connection with this
litigation. (hard) [06-3779 06-4169]
3/8/07 Filed Notice-Only in 06-3779, Notice-Only in 06-4169
statement of counsel for the amici curiae in support of
defendant-appellant in response to March 5th order.
[06-3779, 06-4169] [2051160-1] (kell) [06-3779 06-4169]
3/9/07 Filed motion by Appellee e360 Insight in 06-3779, Appellee
David Linhardt in 06-3779, Appellee e360 Insight in
06-4169, Appellee David Linhardt in 06-4169 to strike
amicus curiae brief. [2082846-1] [06-3779, 06-4169] (hard)
[06-3779 06-4169]
3/12/07 ORDER issued GRANTING motion to file amicus brief.
[2079754-1] The clerk of this court shall file INSTANTER the
tendered copies of the amicus curiae brief and distribute a
copy of this order and the brief to the members of the
assigned merits panel. The motion to strike the brief of the
amicus curiae is DENIED. [2082846-1] The clerk of this court
is directed to file instanter the tendered copies of the
amicus curiae brief. [2051160-1] GMM [06-3779, 06-4169]
(hard) [06-3779 06-4169]
3/12/07 THIS CAUSE CONSISTS OF MORE THAN 5 PARTIES FOR EITHER SIDE.
The following are those parties to this cause as reflected
on the District Court docket, yet are not reflected on the
Appellate docket/caption for administrative purposes:
AMICUS CURIAE: BRANDENBURG INTERNET WORKING; BRIGHT WINGS,
INC.; CHANGEIP.CO; COALITION AGAINST UNSOLICITED COMMERCIAL
EMAIL (CAUCE)- US; DATRAN MEDIA CORP.; EMAILLABS; MICHAEL
GEIST; HABEAS, INC.; INTERNET LAW GROUP, PLLC INNOVYX, INC.;
INTERNET TOOLS, INC.; THE INSTITUTE FOR SPAM AND INTERNET
PUBLIC POLICY (ISIPP); CHRIS LEWIS; JOHN LEVINE; MAILSHELL
INC.; MV COMMUNICATIONS, INC.; RETURN PATH, INC.; SECURE
COMPUTING CORP.; SNERTSOFT; SPIN, S.R.L.; SURBL; TALKBIZ,
INC.; UNSPAM TECHNOLOGIES, INC.; PAUL VIXIE; WEBMAIL. US,
INC.; WHIZARDRIES, INC.; AND DEREK WYATT, MP. [06-3779,
06-4169] [2051160-1] (hard) [06-3779 06-4169]
3/12/07 Filed 15c amicus brief by Amicus Curiae Apexis AG in
06-3779, Amicus Curiae Beyond Security Inc in 06-3779, per
order. Disk filed. [06-3779, 06-4169] [0-0] (odea)
[06-3779 06-4169]
3/23/07 Filed 15c appellee's brief by e360 Insight in 06-3779,
David Linhardt in 06-3779, e360 Insight in 06-4169, David
Linhardt in 06-4169. Disk filed. [06-3779, 06-4169] [0-0]
(andb) [06-3779 06-4169]
Docket as of May 17, 2007 11:01 pm Page 7
06-3779 e360 Insight, et al v. The Spamhaus Project
3/23/07 Filed 10c appendix vols. I & II by Appellee e360 Insight in
06-3779, Appellee David Linhardt in 06-3779, Appellee e360
Insight 06-4169, Appellee David Linhardt in 06-4169.
[06-3779, 06-4169] [2087161-1] (andb) [06-3779 06-4169]
4/6/07 Filed 15c appellant's reply brief by The Spamhaus Project
in 06-3779, The Spamhaus Project in 06-4169. Disk filed.
[06-3779, 06-4169] [0-0] (odea) [06-3779 06-4169]
4/25/07 ORDER: Argument set for Wednesday, June 6, 2007 at 9:30
a.m. Each side limited to 20 minutes. [06-3779, 06-4169]
[2097101-1] (josh) [06-3779 06-4169]
5/7/07 Filed motion by Appellant The Spamhaus Project in 06-3779,
Appellant The Spamhaus Project in 06-4169 to reschedule
oral argument. [2101154-1] [06-3779, 06-4169] (josh)
[06-3779 06-4169]
5/7/07 Disclosure Statement filed by Matthew M. Neumeier for
Appellant The Spamhaus Project in 06-3779, Matthew M.
Neumeier for Appellant The Spamhaus Project in 06-4169.
[06-3779, 06-4169] [2051160-1] (hard) [06-3779 06-4169]
5/9/07 ORDER issued DENYING motion to reschedule oral argument.
[2101154-1] CF [06-3779, 06-4169] (andb) [06-3779 06-4169]
5/16/07 Disclosure Statement filed by Matthew B. Prince for Amicus
Curiae Beyond Security Inc, Amicus Curiae Apexis AG in
06-3779, Matthew B. Prince for Notice-Only in 06-4169.
[06-3779, 06-4169] [2051160-1] (kell) [06-3779 06-4169]
Docket as of May 17, 2007 11:01 pm Page 8
Docketing Statement
This is Spamhaus' Docketing Statement.
Transcript Information Sheet
This is the Transcript Information Sheet associated with the appeal.
Transmitted Long Record
This is the transmittal of the long record to the 7th Circuit.
Spamhaus Appeal Brief
Nos. 06-3779 and 06-4169
_______________________________________________
IN THE UNITED STATES COURT OF APPEALS
FOR THE SEVENTH CIRCUIT
_______________________________________________
THE SPAMHAUS PROJECT, a company limited by guarantee and organized under the laws of England, a/k/a THE SPAMHAUS PROJECT, LTD.,
Defendant-Appellant,
vs.
e360 INSIGHT, LLC, an Illinois Limited Liability Company, and DAVID LINHARDT, an individual,
Plaintiff-Appellees.
_______________________________________________
Appeal from the United States District Court
for the Northern District of Illinois,
District Court No. 06 C 3958
The Honorable Charles P. Kocoras, District Judge
________________________________________________
BRIEF OF DEFENDANT-APPELLANT
THE SPAMHAUS PROJECT
________________________________________________
Matthew M. Neumeier
Craig C. Martin
Carrie A. Fino
JENNER & BLOCK LLP
330 North Wabash Ave.
Chicago, IL 60611
(312) 222-9350
February 21, 2007
CIRCUIT RULE 26.1 DISCLOSURE STATEMENT
Appellate Court No: 06-3779
Short Caption: e360 Insight, LLC et al. v. The Spamhaus Project
To enable the judges to determine whether recusal is necessary or appropriate, an attorney for a non-governmental party or amicus curiae, or a private attorney representing a government party, must furnish a disclosure statement providing the following information in compliance with Circuit Rule 26.1 and Fed. R. App. P. 26.1.
The Court prefers that the disclosure statement be filed immediately following docketing; but, the disclosure statement must be filed within 21 days of docketing or upon the filing of a motion, response, petition, or answer in this court, whichever occurs first. Attorneys are required to file an amended statement to reflect any material changes in the required information. The text of the statement must also be included in front of the table of contents of the party’s main brief. Counsel is required to complete the entire statement and to use N/A for any information that is not applicable if this form is used.
(1) The full name of every party that the attorney represents in the case (if the party is a corporation, you must provide the corporate disclosure information required by Fed. R. App. P. 26.1 by completing item #3):
The Spamhaus Project
(2) The names of all law firms whose partners or associates have appeared for the party in the case (including proceedings in the district court or before an administrative agency) or are expected to appear for the party in this court:
Jenner & Block LLP - Chicago, IL (expected to appear); Wellborn & Wallaco, LLC - Atlanta, GA (appeared in the past); Hinshaw & Culbertson, LLP - Chicago, IL (appeared in the past).
(3) If the party or amicus is a corporation:
i) Identify all its parent corporations, if any; and
None
ii) List any publicly held company that owns 10% or more of the party’s or amicus’ stock:
None
Attorney’s Signature: s/Matthew M. Neumeier Date: 10-26-06
Attorney’s Printed Name: Matthew M. Neumeier
Please indicate if you are Counsel of Record for the above listed parties pursuant to Circuit Rule 3(d). Yes X No _____
Address: Jenner & Block LLP
330 N. Wabash Ave., Chicago, IL 60611
Phone Number: (312) 923-2749 Fax Number: (312) 840-7749
E-Mail Address: mneumeier@jenner.com
CIRCUIT RULE 26.1 DISCLOSURE STATEMENT
Appellate Court No: 06-3779
Short Caption: e360 Insight, LLC et al. v. The Spamhaus Project
To enable the judges to determine whether recusal is necessary or appropriate, an attorney for a non-governmental party or amicus curiae, or a private attorney representing a government party, must furnish a disclosure statement providing the following information in compliance with Circuit Rule 26.1 and Fed. R. App. P. 26.1.
The Court prefers that the disclosure statement be filed immediately following docketing; but, the disclosure statement must be filed within 21 days of docketing or upon the filing of a motion, response, petition, or answer in this court, whichever occurs first. Attorneys are required to file an amended statement to reflect any material changes in the required information. The text of the statement must also be included in front of the table of contents of the party’s main brief. Counsel is required to complete the entire statement and to use N/A for any information that is not applicable if this form is used.
(1) The full name of every party that the attorney represents in the case (if the party is a corporation, you must provide the corporate disclosure information required by Fed. R. App. P. 26.1 by completing item #3):
The Spamhaus Project
(2) The names of all law firms whose partners or associates have appeared for the party in the case (including proceedings in the district court or before an administrative agency) or are expected to appear for the party in this court:
Jenner & Block LLP - Chicago, IL (expected to appear); Wellborn & Wallaco, LLC - Atlanta, GA (appeared in the past); Hinshaw & Culbertson, LLP - Chicago, IL (appeared in the past).
(3) If the party or amicus is a corporation:
i) Identify all its parent corporations, if any; and
None
ii) List any publicly held company that owns 10% or more of the party’s or amicus’ stock:
None
Attorney’s Signature: s/Craig C. Martin Date: 10-26-06
Attorney’s Printed Name: Craig C. Martin
Please indicate if you are Counsel of Record for the above listed parties pursuant to Circuit Rule 3(d). Yes _____ No X
Address: Jenner & Block LLP
330 N. Wabash Ave., Chicago, IL 60611
Phone Number: (312) 923-2776 Fax Number: (312) 840-7776
E-Mail Address: cmartin@jenner.com
CIRCUIT RULE 26.1 DISCLOSURE STATEMENT
Appellate Court No: 06-3779
Short Caption: e360 Insight, LLC et al. v. The Spamhaus Project
To enable the judges to determine whether recusal is necessary or appropriate, an attorney for a non-governmental party or amicus curiae, or a private attorney representing a government party, must furnish a disclosure statement providing the following information in compliance with Circuit Rule 26.1 and Fed. R. App. P. 26.1.
The Court prefers that the disclosure statement be filed immediately following docketing; but, the disclosure statement must be filed within 21 days of docketing or upon the filing of a motion, response, petition, or answer in this court, whichever occurs first. Attorneys are required to file an amended statement to reflect any material changes in the required information. The text of the statement must also be included in front of the table of contents of the party’s main brief. Counsel is required to complete the entire statement and to use N/A for any information that is not applicable if this form is used.
(1) The full name of every party that the attorney represents in the case (if the party is a corporation, you must provide the corporate disclosure information required by Fed. R. App. P. 26.1 by completing item #3):
The Spamhaus Project
(2) The names of all law firms whose partners or associates have appeared for the party in the case (including proceedings in the district court or before an administrative agency) or are expected to appear for the party in this court:
Jenner & Block LLP - Chicago, IL (expected to appear); Wellborn & Wallaco, LLC - Atlanta, GA (appeared in the past); Hinshaw & Culbertson, LLP - Chicago, IL (appeared in the past).
(3) If the party or amicus is a corporation:
i) Identify all its parent corporations, if any; and
None
ii) List any publicly held company that owns 10% or more of the party’s or amicus’ stock:
None
Attorney’s Signature: s/Carrie A. Fino Date: 10-24-06
Attorney’s Printed Name: Carrie A. Fino
Please indicate if you are Counsel of Record for the above listed parties pursuant to Circuit Rule 3(d). Yes No X
Address: Jenner & Block LLP
330 N. Wabash Ave., Chicago, IL 60611
Phone Number: (312) 840-7290 Fax Number: (312) 840-7390
E-Mail Address: cfino@jenner.com
CIRCUIT RULE 26.1 DISCLOSURE STATEMENT
Appellate Court No: 06-3779
Short Caption: e360 Insight, LLC et al. v. The Spamhaus Project
To enable the judges to determine whether recusal is necessary or appropriate, an attorney for a non-governmental party or amicus curiae, or a private attorney representing a government party, must furnish a disclosure statement providing the following information in compliance with Circuit Rule 26.1 and Fed. R. App. P. 26.1.
The Court prefers that the disclosure statement be filed immediately following docketing; but, the disclosure statement must be filed within 21 days of docketing or upon the filing of a motion, response, petition, or answer in this court, whichever occurs first. Attorneys are required to file an amended statement to reflect any material changes in the required information. The text of the statement must also be included in front of the table of contents of the party’s main brief. Counsel is required to complete the entire statement and to use N/A for any information that is not applicable if this form is used.
(1) The full name of every party that the attorney represents in the case (if the party is a corporation, you must provide the corporate disclosure information required by Fed. R. App. P. 26.1 by completing item #3):
The Spamhaus Project
(2) The names of all law firms whose partners or associates have appeared for the party in the case (including proceedings in the district court or before an administrative agency) or are expected to appear for the party in this court:
Jenner & Block LLP - Chicago, IL (expected to appear); Wellborn & Wallaco, LLC - Atlanta, GA (appeared in the past); Hinshaw & Culbertson, LLP - Chicago, IL (appeared in the past).
(3) If the party or amicus is a corporation:
i) Identify all its parent corporations, if any; and
None
ii) List any publicly held company that owns 10% or more of the party’s or amicus’ stock:
None
Attorney’s Signature: s/Stephen M. Geissler Date: 10-24-06
Attorney’s Printed Name: Stephen M. Geissler
Please indicate if you are Counsel of Record for the above listed parties pursuant to Circuit Rule 3(d). Yes No X
Address: Jenner & Block LLP
330 N. Wabash Ave., Chicago, IL 60611
Phone Number: (312) 923-2620 Fax Number: (312) 923-2720
E-Mail Address: sgeissler@jenner.com
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TABLE OF CONTENTS
CIRCUIT RULE 26.1 DISCLOSURE STATEMENTS
TABLE OF CONTENTS.....................................................................................i
TABLE OF AUTHORITIES...............................................................................iv
JURISDICTIONAL STATEMENT.......................................................................1
ISSUES PRESENTED......................................................................................2
STATEMENT OF THE CASE............................................................................3
STATEMENT OF FACTS..................................................................................5
SUMMARY OF ARGUMENT.............................................................................9
STANDARD OF REVIEW...............................................................................10
ARGUMENT..................................................................................................10
I. The Entry of Default Judgment Must Be Reversed Because the District Court Failed to Find that Service of Process was Properly Effected on Spamhaus and that Failure Violates International and United States Law...........................................................................................................11
A. Prior to entering the default judgment, the district court violated international and United States law by failing to consider whether service of process was properly effected on Spamhaus.....................11
1. The District Court Failed to Consider Spamhaus’ Threshold Argument That Service Was Not Proper......................................11
2. Under International and United States Law, the District Court’s Entry of Default, Prior to Making Findings on Service of Process, Was Improper.................................................................14
i. Under the Hague Convention, the Entry of Default Judgment Was Improper.......................................................14
ii. The District Court Improperly Entered Default Judgment without First Determining Whether the Motion for Default Judgment was Properly Served............................15
B. The Default Judgment is Void and Must Be Vacated Because the District Court Lacks Personal Jurisdiction Over Spamhaus...........17
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1. The Entry of Default Judgment is Void and Must be Vacated Because the District Court Entered Default Judgment Without Inquiring into or Determining Whether it had Personal Jurisdiction over Spamhaus.........................................17
2. The Jurisdictional Statements in e360’s Complaint are Insufficient to Confer Personal Jurisdiction over Spamhaus and the Default Judgment is Therefore Void and Should be Vacated...................................................................................................20
C. The District Court’s Entry of Default Judgment Must Be Vacated Because the Claims are Insufficient to State a Claim for which Relief can be Granted, a Hearing on Damages was not Held, and the Damages were Awarded Without Sufficient Evidentiary Support..............................................................................................................................26
1. e360’s Allegations Are Insufficient To State A Claim For Relief........................................................................................................27
2. The District Court Abused Its Discretion When It Entered Default Judgment Against Spamhaus Without Holding A Hearing On the Damages Amount................................................28
3. The District Court Abused Its Discretion By Entering a Damages Judgment Against Spamhaus Without Sufficient Evidentiary Support...........................................................................31
4. The District Court Abused Its Discretion By Failing To Enter Findings Of Fact In Support Of The Damages Amount Awarded In The Default Judgment...............................................32
D. Reversing the District Court’s Default Judgment Conforms With the Seventh Circuit’s Preference for Cases to be Tried on the Merits, and Would Allow Spamhaus the Opportunity to Present Its Meritorious Defenses.....................................................................................33
II. The District Court’s Injunction Must be Vacated Because the District Court Failed to Apply the Traditional Test Required for Injunctive Relief, Neglected its Duties under Federal Rule of Civil Procedure 65, and Issued an Injunction that Violates the First Amendment.................................35
A. The District Court erred in not applying the traditional four-part test prior to granting injunctive relief......................................................37
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B. The District Court erred because the injunctive relief issued does not comport with the requirements under Federal Rule of Civil Procedure 65.....................................................................................................39
C. The Permanent Injunction Issued by the District Court Violates the First Amendment and Must be Reversed................................................42
1. The Injunction Constitutes an Impermissible Prior Restraint and is Facially Invalid........................................................................43
2. The Injunction Amounts to Impermissible Compelled Speech...................................................................................................................44
3. The Injunction is Impermissibly Broad.......................................46
III. The District Court Erred in Denying Spamhaus’ Motion to Vacate Default Judgment under Federal Rule of Civil Procedure 60(b).........................48
A. The District Court Abused its Discretion by Refusing to Vacate the Default Judgment and Ruling Without Allowing Spamhaus an Opportunity to Present Evidence to Support its Rule 60(b)(4) Motion that the Default Judgment was Void for Lack of Personal Jurisdiction.......................................................................................................48
CONCLUSION...............................................................................................52
CERTIFICATE OF COMPLIANCE WITH TYPE-VOLUME LIMITATION, TYPEFACE REQUIREMENTS AND TYPE-STYLE REQUIREMENTS.......54
CIRCUIT RULE 30(d) CERTIFICATION...........................................................55
CERTIFICATE OF COMPLIANCE WITH CIRCUIT RULE 31(e).........................56
CERTIFICATE OF SERVICE..........................................................................57
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TABLE OF AUTHORITIES
CASES
Adam v. Saenger, 303 U.S. 59 (1938)...................................................49
Albiero v. City of Kankakee, 246 F.3d 927 (7th Cir. 2001).....................30
Alexander v. United States, 509 U.S. 544 (1993)...................................43
Anilina Fabrique de Colorants v. Aakash Chemicals & Dyestuffs, Inc., 856 F.2d 873 (7th Cir. 1988)...................................................17
Atiyeh v. Capps, 449 U.S. 1312 (1981).................................................40
Audio Enterprise, Inc. v. B & W Loudspeakers, 957 F.2d 406 (7th Cir.1992).................................................................................16
Bally Exp. Corp. v. Balicar, Ltd., 804 F.2d 398 (7th Cir. 1986)..............17
Board of Trustees v. Elite Erectors, Inc., 64 F.Supp.2d 839 (S.D. Ind. 1999)........................................................................48, 49
Berthold Types Ltd. v. European Mikrograf Corp., 102 F.Supp.2d 928 (N.D. Ill. 2000)..........................................................................21
Black v. Lane, 22 F.3d 1395 (7th Cir. 1994)...................................23, 27
Bombliss v. Cornelson, 355 Ill.App.3d 1107, 824 N.E.2d 1175 [291 Ill. Dec. 925] (2005).........................................................................21
Burda Media, Inc. v. Viertel, 417 F.3d 292 (2d Cir. 2005)......................14
Burger King v. Rudzewicz, 471 U.S. 462 (1985)....................................25
Carroll v. President and Com'rs of Princess Anne, 393 U.S. 175 (1968).............................................................................................46
Chicago Board of Ed. v. Substance, Inc., 354 F.3d 624 (7th Cir. 2003)................................................................................40
Chicago & North Western Trans. Co. v. Railway Labor Exec. Associate, 908 F.2d 144 (7th Cir. 1990)..........................................40
Chung v. Tarom, S.A., 990 F.Supp. 581 (N.D. Ill. 1998).........................14
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Club Assistance Program, Inc. v. Zukerman, 594 F.Supp. 341 (N.D. Ill. 1984)................................................................................23
Cripps v. Life Insurance Co. of N. America, 980 F.2d 1261 (9th Cir. 1992)................................................................................27
Dearborn National Casualty Co. v. Consumers Petroleum Co., 164 F.2d 332 (7th Cir. 1947)..................................................................32
Dennis Garberg & Associates, Inc. v. Pack-Tech International Corp., 115 F.3d 767 (10th Cir. 1997).........................................................19
Doe v. Xudong, No. 04-C-4097, 2005 U.S.Dist. LEXIS 33377 , (N.D. Ill. Dec. 15, 2005).............................................................18, 19
Dormeyer Co. v. M.J.Sales & Distributing Co., 461 F.2d 40 (7th Cir. 1972)................................................................................33
Dresser Industrial, Inc., Waukesha Engine Division v. Gradall Co., 965 F.2d 1442 (7th Cir. 1992).........................................................30
Dundee Cement Co. v. Howard Pipe & Concrete Products, Inc., 722 F.2d 1319 (7th Cir. 1983).....................................................26, 28, 33
Durasys, Inc. v. Leyba, 992 F.2d 1465 (7th Cir. 1993)..........................33
EEOC v. Severn Trent Serv., Inc., 358 F.3d 438 (7th Cir. 2004).............39
Ebay Inc. v. Mercexchange, LLC, 126 S.Ct. 1837 (2006)..................37, 38
Eden v. Klaas, 165 Neb. 323 (Neb. 1957).............................................29
Entertainment Software Associate v. Blagojevich, 404 F.Supp.2d 1051 (N.D. Ill. 2005)..................................................................44, 45
First National Bank of Louisville v. Bezema, 569 F.Supp. 818 (S.D. Ind. 1983)..............................................................................18
Flaks v. Koegel, 504 F.2d 702 (2d Cir. 1974)........................................31
Francis v. Flinn, 118 U.S. 385 (1886).............................................46, 47
Gaudiya Vaishnava Social v. San Francisco, 952 F.2d 1059 (9th Cir. 1991)................................................................................42
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Geddes v. United Finance Group, 559 F.2d 557 (9th Cir. 1977).............37
Greater New Orleans Broad. Associate, Inc. v. United States, 527 U.S. 173 (1999)...............................................................................45
Greyhound Exhibitgroup, Inc., v. E.L.U.L. Realty Corp., 973 F.2d 155 (2d Cir. 1992)...........................................................................31
Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408 (1984).............................................................................................21
Homer v. Jones-Bey, 415 F.3d 748 (7th Cir. 2005)................................10
Hurley v. Irish-American Gay, Lesbian & Bisexual Group, 515 U.S. 557 (1995)......................................................................................45
Indianapolis Colts v. Metropolitan Baltimore Football Club Ltd. Partnership, 34 F.3d 410 (7th Cir. 1994).........................................25
Insurance Corp. of Ireland, Ltd. v. Compagnie des Bauxites de Guinee, 456 U.S. 694 (1982)...........................................................49
Integrated Bus. Information Services, Ltd. v. Dunn & Bradstreet Corp., 714 F.Supp. 296 (N.D. Ill. 1989)............................................23
Johnson v. Nordstrom, Inc., 260 F.3d 727 (7th Cir. 2001).....................29
Kampmier v. Emeritus Corp., 472 F.3d 930 (7th Cir. 2007)...................41
Klump v. Duffus, 71 F.3d 1368 (7th Cir. 1995).....................................17
LaSalle National Bank v. Vitro, S.A., 85 F.Supp.2d 857 (N.D. Ill. 2000)................................................................................21
Lifeway Foods, Inc. v. Fresh Made, Inc., 940 F.Supp. 1316 (N.D. Ill. 1996)................................................................................25
McGee v. International Life Insurance Co., 355 U.S. 220 (1957).............25
Merrill Lynch Mortg. Corp. v. Narayan, 908 F.2d 246 (7th Cir. 1990).....31
Michael J. Neuman & Associates, Ltd. v. Florabelle Flowers, Inc., 15 F.3d 721 (7th Cir. 1994)..................................................................24
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Minnesota Mining & Manufacturing Co. v. Pribyl, 259 F.3d 587 (7th Cir. 2001)................................................................................37
Morrell v. Mock, 270 F.3d 1090 (7th Cir. 2001).....................................49
Neb. Press Association v. Stuart, 427 U.S. 539 (1976)...........................47
Organization for a Better Austin v. Keefe, 402 U.S. 415 (1971)..............43
Oshana v. Coca-Cola Co., 472 F.3d 506 (7th Cir. 2006)........................41
Pennekamp v. Florida, 328 U.S. 331 (1946)..........................................47
Plaintiffs A, B, C, D, E, F v. Zemin, No. 02-C07530, 2003 U.S.Dist. LEXIS 17673 (N.D. Ill. Oct. 15, 2003)........................................18, 19
Pretzel & Stouffer v. Imperial Adjusters, Inc., 28 F.3d 42 (7th Cir. 1994)................................................................................17
Publ'ns International, Ltd. v. Burke/Triolo, Inc., 121 F.Supp.2d 1178 (N.D. Ill. 2000)........................................................................21
Purdue Research Foundation v. Sanofi-Synthelabo, S.A., 338 F.3d 773 (7th Cir. 2003).........................................................................21
RAR Inc. v. Turner Diesel, Ltd., 107 F.3d 1272 (7th Cir. 1997)..............17
Riemer v. KSL Recreation Corp., 348 Ill.App.3d 26, 807 N.E.2d 1004 [283 Ill. Dec. 163] (2004)........................................................24
Robinson Engineering Co. Pension Plan & Trust v. George, 223 F.3d 445 (7th Cir. 2000).........................................................................10
SEC v. Everest Management Corp., 87 F.R.D. 100 (S.D.N.Y. 1980)........16
Schmidt v. Lessard, 414 U.S. 473 (1974)..............................................40
Sequoia Books, Inc. v. Ingemunson, 901 F.2d 630 (7th Cir. 1990)...10, 42
Shelton v. Tucker, 364 U.S. 479 (1960).................................................46
Stafford v. Mesnik, 63 F.3d 1445 (7th Cir. 1995)............................10, 33
Swaim v. Moltan Co., 73 F.3d 711 (7th Cir. 1996).................................20
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System Pipe & Supply, Inc. v. M/V Viktor Kurnatovskiy, 242 F.3d 322 (5th Cir. 2001).........................................................................19
Thompson v. Whitman, 85 U.S. (18 Wall.) 457 (1874)............................49
Travelers Casualty & Surety Co. v. Interclaim (Berm.) Ltd., 304 F.Supp.2d 1018 (N.D. Ill. 2004).......................................................21
Tuli v. Republic of Iraq, 172 F.3d 707 (9th Cir. 1999)............................19
Turner Broad. System v. FCC, 512 U.S. 622 (1994)...............................45
Ty, Inc. v. Jones Group, Inc., 237 F.3d 891 (7th Cir. 2001)....................38
United States v. County of Cook, 167 F.3d 381 (7th Cir. 1999)..............49
United States v. De Frantz, 708 F.2d 310 (7th Cir. 1983)......................28
United States v. Di Mucci, 879 F.2d 1488 (1989).............................28, 37
United States v. Kaun, 827 F.2d 1144 (7th Cir. 1987)...........................43
United States v. Wilson, 154 F.3d 658 (7th Cir. 1998).....................10, 42
In re Uranium Antitrust Litigation, 473 F.Supp. 382 (N.D. Ill. 1979).......32
Va. State Board of Pharmacy v. Va. Citizens Consumer Council, Inc., 425 U.S. 748 (1976)........................................................................45
Wallace v. Herron, 778 F.2d 391 (7th Cir. 1985)...................................25
Webber v. Eye Corp., 721 F.2d 1067 (7th Cir. 1983).............................33
White v. Cleveland Foundry Co., 24 Ohio C.C. (n.s.) 180 (1902)............19
White v. Ratcliffe, 285 Ill.App.3d 758, 674 N.E.2d 906 [211 Ill. Dec. 113] (1996).....................................................................................14
Wooley v. Maynard, 430 U.S. 705 (1977)..............................................45
Zippo Manufacturing Co. v. Zippo Dot Com, Inc., 952 F.Supp. 1119 (W.D. Pa. 1997).........................................................................21, 22
Zuelzke Tool & Engineering Co. v. Anderson Die Castings, Inc., 925 F.2d 226 (7th Cir. 1991)..................................................................15
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STATUTES
28 U.S.C. § 1291...................................................................................2
Communications Decency Act ("CDA") of 1996, 47 U.S.C. § 230, et seq..............................................................................................34
Controlling the Assault of Non-Solicited Pornography and Marketings (CAN-SPAM) Act of 2003, 15 U.S.C. §§ 7701-7713...34, 35
Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters (“Hague Convention”), Nov. 15, 1965, 20 U.S.T. 361, 658 U.N.T.S. 163.............................................................................14, 15
RULES
Fed. R. Civ. P. 4(c)(2)(c)(ii)....................................................................16
Fed. R. Civ. P. 4(f)(1) ...........................................................................14
Fed. R. Civ. P. 4(h)...............................................................................14
Fed R. Civ. P. 5....................................................................................16
Fed. R. Civ. P. 52...........................................................................32, 33
Fed. R. Civ. P. 55(b)..................................................................15, 16, 17
Fed. R. Civ. P. 56.................................................................................29
Fed. R. Civ. P. 60(b)...................................................................8, 10, 51
Fed. R. Civ. P. 65..................................................................4, 10, 39, 40
MISCELLANEOUS
5 C.J.S. Appeal & Error § 718 (1993)...................................................27
M. Nimmer, Nimmer on Freedom of Speech §4.03 (1984).......................43
JURISDICTIONAL STATEMENT
This appeal arises from a Complaint filed by Plaintiffs-Appellees, David Linhardt and e360 Insight, LLC (“e360”) on June 21, 2006 in the Circuit Court of Cook County, Illinois County Department, Chancery Division, against Defendant-Appellant, The Spamhaus Project (“Spamhaus”) (App. 5-20), and removed to the United States District Court for the Northern District of Illinois, Eastern Division, on July 21, 2006. (A. 1-4.) The Complaint alleged four state law claims against Spamhaus. (A. 12-20.) The parties are of diverse citizenship and the Complaint sought compensatory and punitive damages exceeding $10 million, as well as injunctive relief. (A. 1-2.) Spamhaus is a company organized under the laws of the United Kingdom, with its principal place of business in London, United Kingdom, and is not now nor ever has been a citizen of Illinois. (Id.)
David Linhardt is a citizen of the State of Illinois. (A. 2.) e360 is an Illinois Limited Liability Company located in Wheeling, Illinois. (A. 6.) Its members listed with the Illinois Secretary of State’s Office include Maverick Direct Marketing Solutions, Inc., an Illinois Corporation with its principal place of business in Wheeling, Illinois; and David Linhardt, the President of Maverick Direct Marketing Solutions, Inc. in Highland Park, Illinois. Both e360 and Maverick Direct Marketing Solutions, Inc. list Darren M. Green in Chicago, Illinois, as their registered agent.
On July 21, 2006, Spamhaus filed a Notice of Removal (A. 1-4) and its Answer, expressly reserving its personal jurisdiction and service of process-related defenses. (A. 24-33.) The case was removed to the United States District
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Court for the Northern District of Illinois before the Honorable Charles P. Kocoras. (A. 1.)
On September 13, 2006, the district court entered an Order for default judgment against Spamhaus. (A. 140-43.) On October 13, 2006, new counsel for Spamhaus filed an Appearance and a Notice of Appeal from the entry of default judgment. (A. 144.)
On October 26, 2006, Spamhaus filed a Motion to Vacate Default Judgment and For Leave to File a Memorandum in Support under Federal Rule of Civil Procedure 60(b). (A. 150-154.) On October 31, 2006, the district court denied the Motion to Vacate without granting leave to file a memorandum in support. (A. 158.) On November 28, 2006, Spamhaus filed a Notice of Appeal from the denial of the Motion to Vacate. (A. 194.)
This Court has jurisdiction under 28 U.S.C. § 1291.
ISSUES PRESENTED
1. Whether the district court erred by entering a default judgment against Spamhaus, a United Kingdom-based non-profit organization with no contacts in the State of Illinois, (a) despite the lack of any evidence in the record that service was properly effected under the Hague Convention; (b) without considering whether it has personal jurisdiction over the defendant; and (c) when the well-pleaded allegations of the complaint, taken as true, failed to state a claim upon which relief may be granted, and the court awarded damages without a hearing and sufficient evidentiary support?
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2. Whether the district court violated the Constitution in entering an injunction constituting a prior restraint on Spamhaus’ First Amendment rights, when the injunction was entered without application of the traditional four-part test for injunctive relief, and without consideration of the requirements of Federal Rule of Civil Procedure 65?
3. Whether the district court erred by denying Spamhaus’ Motion to Vacate the Default Judgment without allowing it an adequate opportunity to brief its motion to vacate the default judgment and present extrinsic evidence regarding defective service of process and lack of personal jurisdiction?
STATEMENT OF THE CASE
e360 filed suit against Spamhaus on June 21, 2006 in the Circuit Court of Cook County, alleging state law claims for tortious interference with contract, tortious interference with prospective economic advantage, defamation per se, and defamation per quod. (A. 12-20.) On July 21, 2006, Spamhaus removed the case to the United States District Court for the Northern District of Illinois, Eastern Division (A. 1-4) and answered the complaint, expressly reserving its personal jurisdiction and service of process-related defenses. (A. 24-33.)
On August 23, 2006, the district court granted Spamhaus’ Motion to Withdraw the Appearances of Counsel (A. 117) and oral Motion for Leave to Withdraw its Answer to the Complaint. (Id.) At the same time, the court granted e360’s oral Motion for Entry of Default (Id.) and converted a Temporary Restraining Order entered on July 20, 2006 by the Circuit Court of Cook
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County into a Preliminary Injunction, without conducting a hearing or reviewing the Temporary Restraining Order. (Id.; see A. 159-66.)
On September 13, 2006, the district court entered an order for default judgment against Spamhaus, without considering whether service of process was proper under the Hague convention or whether the court had personal jurisdiction over Spamhaus. (A. 140-43; see A. 167-69.) Spamhaus timely filed its Notice of Appeal on October 13, 2006, which was docketed by the United States Court of Appeals for the Seventh Circuit as Case No. 06-3779. (A. 144.) On October 17, 2006, this Court entered an initial briefing schedule for this appeal, which was revised on November 3, 2006, pursuant to Circuit Rule 33.
On October 26, 2006, Spamhaus filed a Motion to Vacate Default Judgment and For Leave to File a Memorandum in Support under Federal Rule of Civil Procedure 60(b), arguing that based on the information then available to its newly-retained counsel the district court erred in entering the default judgment because it did not consider (a) whether service of process was proper, (b) whether it had personal jurisdiction over Spamhaus, and because (c) the injunctive relief entered did not comply with Fed. R. Civ. P. 65 and violated the First Amendment. (A. 150-54.) Spamhaus requested an opportunity to brief the motion because, although the transcripts of the prior proceedings had been ordered, they had not yet been provided. (A. 154.) Despite that request, the court denied the Motion to Vacate on October 31, 2006, without granting Spamhaus leave to file a memorandum in support. (A. 158; see A. 174-84.)
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Spamhaus timely filed its second Notice of Appeal from the denial of the Motion to Vacate on November 28, 2006 (A. 194), which was docketed by this Court as Case No. 06-4169. On December 5, 2006, this Court consolidated Case Nos. 06-3779 and 06-4169.
STATEMENT OF FACTS
Spamhaus is a United Kingdom non-profit limited liability company located in London, United Kingdom, and operating through its website located at http://www.spamhaus.org. (A. 6.) Spamhaus is not a citizen of Illinois, and conducts its business solely within the United Kingdom. (A. 191.) Spamhaus has no employees in Illinois; pays no salaries or taxes in Illinois; has no real property, offices, warehouses, distributors, agents, employees, mailboxes, bank accounts, or business operations in Illinois; does not target advertising at Illinois; does not maintain a registered agent for service of process in Illinois; and does not now nor has it ever provided goods or services to persons in Illinois, derived revenue from goods provided or services rendered in Illinois, nor been a party to any contract with any person or entity located in Illinois or requiring performance in Illinois. (A. 191-92.)
Spamhaus operates as an internet watch dog group, tracking purveyors of unsolicited e-mail solicitations and messages (“spam”) in order to aid interested internet service providers (“ISPs”) in protecting their users from unwanted spam e-mails. (A. 8.) As part of its operations, Spamhaus generates the Register of Known Spam Operations (“ROKSO”) list, identifying individuals or entities that have been terminated from ISPs three or more times for engaging
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in spam offenses. (Id.) In December 2003, Spamhaus listed e360 and Linhardt on the ROKSO list for “being assigned to, under the control of, or providing service to a known professional spam operation run by Brian Haberstroh / Atriks.” (A. 34.) e360 responded by filing a Complaint on June 21, 2006, for Injunctive Relief and Damages against Spamhaus in the Circuit Court of Cook County. (A. 5-20.) An Amended Complaint was filed on June 23, 2006. (Id.)
On July 21, 2006, Spamhaus filed a Notice of Removal in the United States District Court for the Northern District of Illinois, asserting that citizenship is diverse and damages in excess of $10 million was sought. (A. 1-2.) That same day, Spamhaus filed its Answer, expressly reserving its jurisdiction-related defenses, denying any wrongful acts, and asserting fourteen affirmative defenses, including lack of personal jurisdiction and improper service of process. (A. 24-33.)
At a hearing on August 23, 2006, the district court noted “[w]e need some better presentation as to the citizenship of the parties, particularly since the plaintiff is a limited liability company whose citizenship is not akin to a corporate citizenship.” (A. 160.) Subsequently, Spamhaus’ counsel asked to withdraw its appearance and the answer. (A. 161.) The district court allowed the withdrawal of the appearance and the answer, but stated that because “it was a dead-bang certainty that default is going to be entered without any resistance to the lawsuit — I am going to enter a default order today.” (A. 164.) The district court entered the default order, advising counsel for e360 that if Spamhaus failed to defend the case any further, they were to “submit a copy of
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[a default judgment] motion — or motions — or serve the other side in the normal way…then, I will call it up,” and Spamhaus would lose the case by means of a default judgment. (A. 165.)
On September 12, 2006, the hearing on the motion for default judgment was conducted in the district court, with only e360 present. (A. 167-69.) In this proceeding, e360 claimed that the motion for default judgment had been “served…in four different ways: Once on their old counsel; once by e-mail; once by Fed Ex; and, once by in-person service in the United Kingdom.” (A. 168.) The district court questioned whether there was any issue regarding federal jurisdiction. (Id.) e360 responded only that there was no issue because Spamhaus sought to remove it. (Id.) The district court granted the default judgment without conducting a hearing on damages (A. 167-69), and the next day issued its default judgment order granting e360 a default judgment and charging Spamhaus with $11,715,000 in compensatory damages and $1,971.05 in litigation costs, as well as issuing an injunction ordering Spamhaus to “not take any action to cause email sent by [e360] or their affiliates, subsidiaries, or related companies…to be blocked, delayed, altered, or interrupted in any way…unless Spamhaus can demonstrate by clear and convincing evidence that Plaintiffs have violated relevant United States law.” (A. 140-43.) There was no evidence or affidavit in the record before the district court regarding the service of process, and the district court failed to address the propriety of the service.
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On October 13, 2006, Spamhaus’ current counsel was retained and filed both a Notice of Appeal of the Default Judgment to the Seventh Circuit Court of Appeals (A. 144) and appearances by its attorneys with the district court. (Atty. Appearances, Oct. 13, 2006, Docket Nos. 32-34.) On October 26, 2006, in response to e360’s Citation to Discover Assets, Spamhaus filed (1) a Motion to Quash Plaintiff’s Citation to Discover Assets (A. 148-49); (2) a Motion to Stay Enforcement of the Judgment Pending Appeal (A. 155-57); and (3) a Rule 60(b) Motion to Vacate the District Court’s Default Judgment and For Leave to File a Memorandum in Support. (A. 150-54.) Because counsel for Spamhaus had not yet received any transcripts of earlier proceedings in the district court upon which they could base their arguments, the Rule 60(b) Motion to Vacate requested that a briefing schedule be set to allow Spamhaus an opportunity to file a Memorandum in Support of its Motion. (A. 154.)
The district court addressed those motions on October 31, 2006, where counsel for Spamhaus repeatedly stressed its contention that the district court’s default judgment was void and should be vacated under Fed. R. Civ. P. 60(b)(4) for lack of proper service and lack of personal jurisdiction over Spamhaus. (A. 174-84.) Spamhaus also asserted that it had not yet received transcripts and needed a briefing schedule to fully present its arguments; that the damages award in the case was granted without a required hearing; and that the scope of the injunction was improper. (Id.) The district court disagreed, holding that “yes, we do have to have jurisdiction over subject matter, as well as the person or presence of a defendant in the first instance.” (A. 181-82.)
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Furthermore, the court held that Spamhaus’ failure to participate in litigation and present its jurisdictional arguments prevented those issues from being “crystallized by way of counter-affidavits or some other such thing,” and thus “[t]here was not anything about this case that at least suggested itself to me that I lacked personal jurisdiction, either over the person of the defendant or the subject matter of the case.” (Id.) The court denied all of Spamhaus’ motions. (A. 158.)
On November 28, 2006, Spamhaus filed a Notice of Appeal from the district court’s denial of Spamhaus’ Rule 60(b) Motion to Vacate the Default Judgment. (A. 194.)
SUMMARY OF ARGUMENT
The district court’s entry of default judgment and permanent injunction must be reversed because they contain fatal errors. First, the district court failed to determine whether service of process was proper prior to entering default judgment, which violates the Hague Convention. Second, prior to entering the default judgment, the district court failed to determine whether it had personal jurisdiction over Spamhaus, even though Spamhaus had properly raised this argument in earlier proceedings. Third, the default judgment was improperly entered because the well-pleaded allegations of the complaint fail to state a claim upon which relief may be granted, and the damages were awarded without either a hearing or sufficient evidentiary support.
The permanent injunction entered by the district court also must be vacated because the court failed to apply the traditional test for injunctive relief and
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disregarded Fed. R. Civ. P. 65. Furthermore, the permanent injunction as entered violates the First Amendment because it is a prior restraint, impermissibly compels speech, and is overbroad.
Finally, the district court also erred when it denied Spamhaus’ Rule 60(b) motion without allowing Spamhaus an opportunity to brief the motion. At the time the court denied the Rule 60(b) motion, Spamhaus’ new counsel had been retained for less than three weeks, and, although counsel had ordered the transcripts in the case, they had not yet been received. Counsel needed an opportunity to review the prior court proceedings in order to properly and ethically develop its Rule 60(b) arguments.
STANDARD OF REVIEW
An appellate court reviews a district court's entry of a default judgment and a district court's decision on a Rule 60(b) motion to vacate a default judgment for an abuse of discretion. Homer v. Jones-Bey, 415 F.3d 748, 753 (7th Cir. 2005); Robinson Eng’g Co. Pension Plan & Trust v. George, 223 F.3d 445, 448 (7th Cir. 2000). Constitutional issues, however, are reviewed de novo. United States v. Wilson, 154 F.3d 658, 662 (7th Cir. 1998); Sequoia Books, Inc. v. Ingemunson, 901 F.2d 630, 633 (7th Cir. 1990).
ARGUMENT
“While this circuit no longer disfavors default judgments…a default judgment should not be considered a ready response to all litigant misbehavior.” Stafford v. Mesnik, 63 F.3d 1445, 1450 (7th Cir. 1995) (internal citations omitted). When a district court imposes a default judgment, that
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judgment must be legal and valid, having been arrived at by observation of proper procedural requirements. In this case: (1) the district court's failure to ensure the validity of service of process; (2) the court's lack of personal jurisdiction over Spamhaus; (3) the non-existence of legal claims upon which relief can be granted; and (4) the unconstitutionality of the injunctive relief entered, all constitute grounds to reverse the default judgment.
I. The Entry of Default Judgment Must Be Reversed Because the District Court Failed to Find that Service of Process was Properly Effected on Spamhaus and that Failure Violates International and United States Law.
A. Prior to entering the default judgment, the district court violated international and United States law by failing to consider whether service of process was properly effected on Spamhaus.
On September 13, 2006, the district court entered a default judgment against Spamhaus. (A. 140-43.) This decisions must be reversed and this matter must be remanded. First, in its decision, the district court did not give due consideration to Spamhaus’ threshold argument that e360 failed to comply with applicable rules for service of process. Second, under either a binding international agreement or Illinois law, the district court’s decisions were based on an inadequate factual record and service was improper.
1. The District Court Failed to Consider Spamhaus’ Threshold Argument That Service Was Not Proper.
Although Spamhaus clearly informed the district court that it had not been properly served (A. 2, 31), the court failed to consider whether service was proper prior to entering the default judgment and permanent injunction. (A. 140-43; see A. 167-69.) The facts relevant to this issue are simple and
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illustrate the need for reversal and remand. First, when the case was removed to federal court, Spamhaus immediately raised the issue of lack of service of process in its removal petition. (A. 2.) (“service has not been perfected against Spamhaus”). Second, nothing in the documents attached to the removal petition indicated whether Spamhaus was served or, if it was served, the method of service used, let alone whether any attempt of service was proper. Third, nothing that e360 subsequently submitted to the district court ever explained, or even addressed, the issue of service of process. Therefore, the entire record on which the district court based its entry of default judgment lacked any facts regarding the method used to serve Spamhaus or whether service was proper. At the same time, the district court was on notice of potential service issues because the Complaint plainly acknowledged that Spamhaus was a foreign corporation based in the United Kingdom, without any physical presence in the United States. (A. 6.)
The transcripts from the district court proceedings demonstrate the absence of facts indicating proper service. The court failed to even address the issue when hearing the motion for default judgment. (A. 167-69.) Even though Spamhaus raised improper service in its removal petition (A. 2), the district court simply stated, “I am going to grant your [e360’s] motion on the basis that there is no opposition to it, and it appears none is in the offing.” (A. 169.) The court also failed to acknowledge or address Spamhaus’ objections to service of process in any of its written orders. (A. 117, 140-43, 146-47, 158.)
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The transcript from the hearing on Spamhaus’ Motion to Vacate Default Judgment shows the district court’s complete disregard for the requirement that a court must determine that service was proper prior to entering default judgment. (A. 174-84.) During that hearing, Spamhaus again informed the court that service was not proper by noting, “I have not seen any finding that there was proper service, as required by the Hague Convention. And the finding of service is a requirement for default judgment.” (A. 179.) e360 provided no argument to show that the summons and complaint were served or that service was proper. (A. 174-84.) Moreover, the court responded only by stating that findings of jurisdiction and “whatever else you think I neglected to do” are “often ma[de] . . . relying on affidavits which. . . . [is] the routine way that we consider what . . . . judgments to enter in default cases.” (A. 182.) However, the district court did not have any such affidavits in the record before it. Only five affidavits were in the record before the district court. (A. 124-34; Linhardt Aff., Document 17-2, 5:1-12:35, Aug. 21, 2006; Linhardt Aff., Document 26-2, 7-10, Sept. 26, 2006; Hutcheson Aff., Document 26-2, 12:1-13:8, Sept. 28, 2006.) None of those affidavits addressed whether service of process was effected on Spamhaus, and if it was, what method was used. The affidavits also did not respond to Spamhaus’ objection that it was not properly served.
Spamhaus repeatedly claimed that service was improper in this case. However, the district court simply ignored those assertions without looking into the record. A review of the record establishes that the district court had no information regarding whether service had been attempted, what method may
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have been used, whether Spamhaus received the service, or whether any service was proper. The court failed to address Spamhaus’ objections regarding improper service of process and failed to determine whether service was proper prior to entering default judgment in this case.
2. Under International and United States Law, the District Court’s Entry of Default, Prior to Making Findings on Service of Process, Was Improper.
i. Under the Hague Convention, the Entry of Default Judgment Was Improper.
Because Spamhaus is a United Kingdom company, the issue of service is governed by the Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters (“Hague Convention”), Nov. 15, 1965, 20 U.S.T. 361, 658 U.N.T.S. 163. See Fed. R. Civ. P. 4(f)(1) & 4(h); see also Chung v. Tarom, S.A., 990 F. Supp. 581, 584 n.2 (N.D. Ill. 1998). Because the district court had no evidence regarding service on Spamhaus, a remand is necessary to determine whether service was proper under the Hague Convention.
Article 15 of the Hague Convention provides:
where a writ of summons or an equivalent document had to be transmitted abroad for the purpose of service, under the provisions of the present Convention, and the defendant has not appeared, judgment shall not be given until it is established that:
(a) the document was served by a method prescribed by the internal law of the State addressed for the service of documents in domestic actions upon persons who are within its territory, or
(b) the document was actually delivered to the defendant or to his residence by another method provided for by this Convention . . .
Hague Convention, supra, art. 15.
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Article 15 has been recognized as part of United States law by both state and federal courts. Burda Media, Inc. v. Viertel, 417 F.3d 292, 299-300 (2d Cir. 2005); White v. Ratcliffe, 285 Ill. App. 3d 758, 765-66, 674 N.E.2d 906, 911-12, 211 Ill. Dec. 113 (1996). Prior to entering default, a court must determine “(1) that service was proper under the internal law of the country where the defendant is to be served; (2) that the document was actually delivered to the defendant; and (3) that service was effected in sufficient time for the defendant to defend.” Id. at 768, 674 N.E.2d at 914.
Although Spamhaus specifically informed the district court that, under the Hague Convention, it must make a finding regarding service of process prior to the entry of default judgment, the court failed to address that argument. (A. 179.) By ignoring Spamhaus’ objections to service of process, see discussion supra Part I.A.1, and failing to determine whether the summons and complaint were actually served by a method prescribed by the United Kingdom, the court failed to comply with Article 15 of the Hague Convention. (A. 174-84.) Therefore, the entry of default judgment was improper as a matter of law and must be reversed and remanded.
ii. The District Court Improperly Entered Default Judgment without First Determining Whether the Motion for Default Judgment was Properly Served.
A defaulting party who has appeared in an action must be served with written notice of an application for default judgment at least three days prior to the hearing on that application. Fed. R. Civ. P. 55(b)(2). A party has appeared “where that party has actually made some presentation or submission to the
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district court in the pending action.” Zuelzke Tool & Eng’g Co. v. Anderson Die Castings, Inc., 925 F.2d 226, 230 (7th Cir. 1991) (emphasis omitted). In this case, while preserving its objection to personal jurisdiction and service of process, Spamhaus removed the action to the federal court, filed an answer, and originally appeared. (A. 1-2, 24-33.) Accordingly, it was entitled to proper service of e360’s application for default judgment. Fed. R. Civ. P. 55(b)(2).
Spamhaus never received proper service of e360’s Motion for Default Judgment. (A. 118-123.) In the Certificate of Service attached to the Motion for Default Judgment, e360 asserts that it effectuated service on Spamhaus in three different ways: via email to Spamhaus’ former attorneys, via Federal Express, and via in-hand delivery on Spamhaus. (A. 123.) However, all three of those methods are insufficient under Rule 5. Fed R. Civ. P. 5(b).
First, at the time this motion was filed, Spamhaus was no longer represented by counsel. (A. 117, 118-123.) Thus, email notification sent to Spamhaus’ former counsel was an ineffective means of service. Fed R. Civ. P. 5(b)(1); see also SEC v. Everest Mgmt. Corp., 87 F.R.D. 100, 102 n.1 (S.D.N.Y. 1980) (“If a party is no longer represented by an attorney . . . service must be made on the party [it]self”). Second, this Court has never held delivery by Federal Express to be an adequate form of service “by mail.” Audio Enter., Inc. v. B & W Loudspeakers, 957 F.2d 406, 409 (7th Cir.1992) (holding that Federal Express is not first class mail and thus failed to satisfy Fed. R. Civ. P. 4(c)(2)(C)(ii)). Lastly, although e360 claims it served Spamhaus by in-hand delivery, there is no evidence in the record demonstrating how this service was
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purportedly perfected. (A. 123.) In fact, no authorized representative of Spamhaus has ever been properly served with in-hand delivery of any document by plaintiffs.
Thus, e360 failed to properly serve Spamhaus with the three-day notice of its Motion for Default Judgment as required under Fed. R. Civ. P. 55(b)(2), and that failure is grounds for reversal of a default judgment when attacked on direct appeal. Anilina Fabrique de Colorants v. Aakash Chems. & Dyestuffs, Inc., 856 F.2d 873, 877 (7th Cir. 1988).
B. The Default Judgment is Void and Must Be Vacated Because the District Court Lacks Personal Jurisdiction Over Spamhaus.
While an appellate court will reverse a district court’s default judgment only upon finding an abuse of discretion, Pretzel & Stouffer v. Imperial Adjusters, Inc., 28 F.3d 42, 45 (7th Cir. 1994), this Court has held that a district court abuses its discretion by entering a default judgment without personal jurisdiction. Bally Exp. Corp. v. Balicar, Ltd., 804 F.2d 398, 400 (7th Cir. 1986). Because the district court lacked personal jurisdiction over Spamhaus, this Court must reverse the district court’s default judgment.
1. The Entry of Default Judgment is Void and Must be Vacated Because the District Court Entered Default Judgment Without Inquiring into or Determining Whether it had Personal Jurisdiction over Spamhaus.
Whether a court has personal jurisdiction over a party is a question of law, Klump v. Duffus, 71 F.3d 1368, 1371 (7th Cir. 1995), and the legal conclusion that personal jurisdiction exists over a defendant is reviewed by an appellate court de novo. RAR Inc. v. Turner Diesel, Ltd., 107 F.3d 1272, 1275 (7th Cir.
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1997). In this case, the record is bereft of any inquiry or findings, much less a conclusion, by the district court that it actually had personal jurisdiction over Spamhaus. During the hearing on August 23, 2006, the court noted that “[w]e need some better presentation as to the citizenship of the parties, particularly since the plaintiff is a limited liability company whose citizenship is not akin to a corporate citizenship. You have to go find out where the parties are positioned.” (A. 160.) However, after mentioning the possibility of a subject matter jurisdiction problem based on the presence of a foreign-based entity, the district court never again inquired into whether personal jurisdiction was proper.
District courts within the Seventh Circuit have held that a court has an affirmative duty to determine personal jurisdiction sua sponte before imposing default judgment against an absent, foreign-based defendant. See e.g., First Nat’l Bank of Louisville v. Bezema, 569 F. Supp. 818, 819 (S.D. Ind. 1983); Plaintiffs A, B, C, D, E, F v. Zemin, No. 02-C07530, 2003 U.S. Dist. LEXIS 17673, at *4 (N.D. Ill. Oct. 15, 2003); Doe v. Xudong, No. 04-C-4097, 2005 U.S. Dist. LEXIS 33377, at *4-5 (N.D. Ill. Dec. 15, 2005). In Bezema, the court addressed a motion for default judgment against a non-resident defendant who had failed to answer or otherwise respond to the complaint, and held that “the rule that a court may not sua sponte dismiss for lack of personal jurisdiction does not apply where a defendant has not entered an appearance by filing a motion.” 569 F. Supp. at 819. Recently, two other district courts in this Circuit have noted that “it is well established that a Court may (and perhaps must)
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consider the issue of personal jurisdiction sua sponte when addressing the imposition of a default judgment.” Zemin, 2003 U.S. Dist. LEXIS 17673, at *4; Xudong, 2005 U.S. Dist. LEXIS 33377, at *4-5. Other federal circuits have also held that a district court has an affirmative duty to inquire sua sponte into personal jurisdiction before entering a default judgment against a defendant who has failed to answer or appear in the case. See Sys. Pipe & Supply, Inc. v. M/V Viktor Kurnatovskiy, 242 F.3d 322, 324 (5th Cir. 2001); Tuli v. Republic of Iraq, 172 F.3d 707, 712 (9th Cir. 1999); Dennis Garberg & Associates, Inc. v. Pack-Tech International Corp., 115 F.3d 767, 771 (10th Cir. 1997).
This case demonstrates why the Seventh Circuit should recognize that due process places an affirmative duty upon district courts to inquire into personal jurisdiction before entering a default judgment. Spamhaus is “a United Kingdom non-profit limited liability company…located in London, England.” (A. 6.) Given Spamhaus’ non-resident status, the internet-related subject matter of the suit (which raises complicated personal jurisdiction questions in its own right), and Spamhaus’ failure to answer the Complaint,1 the district court should have been aware that personal jurisdiction was an issue in this case that needed to be resolved sua sponte before imposing default judgment. The court recognized that the citizenship of the parties was an issue before
1 Although Spamhaus had filed an Answer to e360’s Complaint, the district court later granted Spamhaus’ counsel’s Motion to Withdraw the Answer. No objection was raised by e360’s counsel to this request. Once Spamhaus’ Answer was withdrawn, Spamhaus was in the position as if it had never filed such an answer. See White v. Cleveland Foundry Co., 24 Ohio C.C. (n.s.) 180, 183 (1902) (“permission having been given to the defendant to withdraw his answer, the case stood as if no answer had been filed”).
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Spamhaus was permitted to withdraw its answer and appearance, thus leading to its default. (A. 160.) Despite this recognition that personal jurisdiction was an issue, the district court entered default judgment without making any inquiry or determination regarding its personal jurisdiction over Spamhaus. (A. 140-43; see A. 167-169.)
If the district court had undertaken its own inquiry, it would have found it had no personal jurisdiction over Spamhaus and dismissed the case, as discussed infra at Section I.B.2. Instead, the district court entered the default judgment without performing this affirmative duty, and for this error the default judgment should be reversed.
2. The Jurisdictional Statements in e360’s Complaint are Insufficient to Confer Personal Jurisdiction over Spamhaus and the Default Judgment is Therefore Void and Should be Vacated.
The district court’s failure to inquire into personal jurisdiction sua sponte has left Spamhaus in the position of asking this Court to “review[ ] no exercise of discretion for an abuse of discretion.” Swaim v. Moltan Co., 73 F.3d 711, 717 (7th Cir. 1996). This Court is thus forced to “decide questions of fact that were never considered by the district court” without the benefit of any factual findings on personal jurisdiction by the district court. Id. at 719.
Compounding this error is the uncontroverted evidence that Spamhaus has no offices, employees, or property in Illinois, and conducts no regular business in Illinois. (A. 191-92.) As the Supreme Court has held, general personal jurisdiction exists when a defendant has “continuous and systematic general
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business contacts” with the forum state, Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414-16 (1984), and these “contacts must be so extensive as to make it ‘fundamentally fair to require [defendant] to answer in any [Illinois] court in any litigation arising out of any transaction or occurrence taking place anywhere in the world.’” Travelers Cas. & Sur. Co. v. Interclaim (Berm.) Ltd., 304 F. Supp. 2d 1018, 1024 (N.D. Ill. 2004) (quoting Purdue Research Found. v. Sanofi-Synthelabo, S.A., 338 F.3d 773, 787 (7th Cir. 2003) (emphasis in original)). Had the district court inquired into its personal jurisdiction over Spamhaus, the absence of any contact between Spamhaus and Illinois would have prompted the district court to find that it lacked personal jurisdiction over Spamhaus.
Furthermore, an inquiry into its personal jurisdiction over Spamhaus would have revealed to the district court that Spamhaus exists solely as an “information-only” website with minimal interactivity and no commercial purpose. As one Illinois court has noted, “[t]he type of Internet activity that is sufficient to establish personal jurisdiction remains an emerging area of jurisprudence.” Bombliss v. Cornelson, 355 Ill. App. 3d 1107, 1114, 824 N.E.2d 1175, 1180, 291 Ill. Dec. 925 (2005).
On this issue, courts in the Seventh Circuit have adopted the “sliding scale” analysis of Zippo Manufacturing Co. v. Zippo Dot Com, Inc., 952 F. Supp. 1119 (W.D. Pa. 1997). See e.g., LaSalle Nat’l Bank v. Vitro, S.A., 85 F. Supp. 2d 857, 861 (N.D. Ill. 2000); Publ’ns Int’l, Ltd. v. Burke/Triolo, Inc., 121 F. Supp. 2d 1178, 1182 (N.D. Ill. 2000); Berthold Types Ltd. v. European Mikrograf Corp.,
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102 F. Supp. 2d 928, 932 (N.D. Ill. 2000). In Zippo, the district court described the “sliding scale” as follows:
At one end of the spectrum are situations where a defendant clearly does business over the Internet…. At the opposite end are situations where a defendant has simply posted information on an Internet Web site which is accessible to users in foreign jurisdictions. A passive website that does little more than make information available to those who are interested in it is not grounds for the exercise of personal jurisdiction.
Zippo, 952 F. Supp. at 1124. Thus, had Spamhaus been allowed to demonstrate to the district court that it merely “makes information available to those who are interested in it,” the district court would have found that it lacked personal jurisdiction over Spamhaus, regardless of Spamhaus’ website’s accessibility to Illinois Internet users.
Even without this evidentiary record, this Court should vacate the district court’s default judgment against Spamhaus because the allegations in e360’s complaint regarding personal jurisdiction are vague legal conclusions, not “well-pleaded facts” sufficient to support a finding of personal jurisdiction over Spamhaus. (A. 5-7.) In its complaint, e360 makes only two allegations regarding the court’s personal jurisdiction over Spamhaus. (A. 6.) First, it states that “Spamhaus does business in Illinois by, among other things, marketing its services to companies, and specifically Internet Service Providers (ISP), located in Illinois.” (Id.) Based on this allegation, e360 contended that the court had broad, general jurisdiction over Spamhaus. (Id.) Second, e360’s complaint states that “Jurisdiction is proper because a substantial part of the events or omissions giving rise to the claims alleged herein occurred in Illinois,
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or a substantial part of the property that is the subject of the action is situated in Illinois.” (Id.) Neither of these allegations is sufficient to confer personal jurisdiction over Spamhaus, let alone general jurisdiction.
The question of whether a company is “doing business” in Illinois under Illinois’s long-arm statute is a legal conclusion, not a factual allegation, and therefore this Court need not conclude that Spamhaus was doing business in Illinois just because e360’s complaint and affidavits assert that it is so. Integrated Bus. Info. Servs., Ltd. v. Dunn & Bradstreet Corp., 714 F. Supp. 296, 299 (N.D. Ill. 1989); see also Club Assistance Program, Inc. v. Zukerman, 594 F. Supp. 341, 351 (N.D. Ill. 1984) (“Even the Rules’ notice pleading requires the allegation of facts, not mere legal conclusions”); Black v. Lane, 22 F.3d 1395, 1399 (7th Cir. 1994) (holding that when a default judgment is entered, facts alleged in the complaint may not be contested but a defaulted party can challenge the sufficiency of the complaint). Because e360’s allegation in its complaint that “Spamhaus does business” is a legal conclusion — and, thus, is not presumptively “true” like facts alleged in a defaulted complaint — the district court’s jurisdiction over Spamhaus must come from the allegation that Spamhaus’ “marketing [of] its services to companies…located in Illinois” constitutes “doing business” for purposes of Illinois long-arm personal jurisdiction. (A. 6.) This allegation is insufficient to support a finding of personal jurisdiction over Spamhaus as a matter of law.
The assertion that “marketing” to Illinois companies alone constitutes “doing business” for purposes of long-arm jurisdiction has been rejected by Illinois
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courts. As this Court has noted, personal jurisdiction under Illinois’ long-arm statute for “doing business” involves a “regularity of activities in Illinois,” and a company must be operating in the state “not occasionally or casually, but with a fair measure of permanence.” Michael J. Neuman & Assocs., Ltd. v. Florabelle Flowers, Inc., 15 F.3d 721, 724 (7th Cir. 1994) (internal quotations omitted). While “there is no fixed ‘doing business’ test, most Illinois courts finding personal jurisdiction over foreign corporations have based their determinations on facts such as whether the defendant has maintained offices or engaged in sales activities in Illinois,” and “[n]otably, mere advertisement, even through the Internet, participation in trade shows, or solicitation by an employee or agent who lacks authority to do more have not been enough to sustain personal jurisdiction in Illinois.” Riemer v. KSL Recreation Corp., 348 Ill. App. 3d 26, 36, 807 N.E.2d 1004, 1013, 283 Ill. Dec. 163 (2004) (internal citations omitted).
e360 made no allegations in its complaint that Spamhaus had employees, offices, or property in the state of Illinois, nor did e360 make any allegations in its complaint that Spamhaus had sold or delivered its ROKSO list to companies or individuals located in Illinois. (A. 5-20.) e360’s lone allegation that Spamhaus is “doing business” in Illinois by “marketing” its ROKSO list to Illinois companies through Internet advertising is insufficient under Riemer’s holding that such advertising alone does not sustain personal jurisdiction.
e360’s second jurisdictional allegation is that “[j]urisdiction is proper because a substantial part of the events or omissions giving rise to the claims
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alleged herein occurred in Illinois, or a substantial part of the property that is the subject of the action is situated in Illinois.” (A. 6.) While e360 is “an Illinois Limited Liability Company located in Wheeling, Illinois,” and its owner David Linhardt “is an individual who resides … [in] Highland Park, [Illinois],” (Id.) the citizenship of the plaintiff is irrelevant to establishing personal jurisdiction — “jurisdiction is proper [only]…where the contacts proximately result from actions by the defendant himself that create a ‘substantial connection’ with the forum state.” Burger King v. Rudzewicz, 471 U.S. 462, 473 (1985) (quoting McGee v. Int’l Life Ins. Co., 355 U.S. 220, 223 (1957)). Furthermore, “[a]n Illinois court does not acquire jurisdiction simply because the ‘last act’ of the tort is an economic loss felt in Illinois when all the conduct contributing to the injury occurred outside of Illinois…[and] an economic injury, by itself does not support the conclusion that a tortious act was committed in Illinois.” Lifeway Foods, Inc. v. Fresh Made, Inc., 940 F. Supp. 1316, 1319-20 (N.D. Ill. 1996); see also Indianapolis Colts v. Metro. Baltimore Football Club Ltd. P’ship, 34 F.3d 410, 412 (7th Cir. 1994) (requiring more than simply causing injury in the forum state); Wallace v. Herron, 778 F.2d 391, 394 (7th Cir. 1985).
As e360’s complaint acknowledges, “Spamhaus is…a United Kingdom non-profit limited liability company…located in London, England,” and e360 has stated nothing in its complaint that indicates that Spamhaus took any action in Illinois with regard to publishing its ROKSO list. (A. 6.) If Spamhaus owns no property in the state of Illinois and all its conduct occurred outside of Illinois, a court sitting in Illinois lacks personal jurisdiction over Spamhaus. If
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e360 does have a cause of action against Spamhaus, personal jurisdiction would exist only where the defendant’s conduct occurred or where the defendant is located — namely, the United Kingdom.
Because the factual allegations in e360’s complaint are insufficient as a matter of law to establish the district court’s personal jurisdiction over Spamhaus, the district court’s default judgment is void. This Court should therefore vacate the default judgment against Spamhaus for lack of personal jurisdiction.
C. The District Court’s Entry of Default Judgment Must Be Vacated Because the Claims are Insufficient to State a Claim for which Relief can be Granted, a Hearing on Damages was not Held, and the Damages were Awarded Without Sufficient Evidentiary Support.
An appellate court reviews a lower court’s entry of default judgment using an abuse of discretion standard. Dundee Cement Co. v. Howard Pipe & Concrete Prods., Inc., 722 F.2d 1319, 1322 (7th Cir. 1983). Because Spamhaus timely filed a notice of appeal, the propriety of the underlying judgment order has been preserved for appellate review. Id. at 1323 n.6.
In this case, the district court abused its discretion in denying Spamhaus’ motion to vacate the default judgment without conducting any inquiry into Spamhaus’ bases for relief. (A. 158; see A. 174-84.) The entry of default judgment should be reversed for three reasons. First, the district court abused its discretion by not considering whether e360’s claims were sufficient to state a claim for relief. Second, the district court erred by not conducting the required hearing on damages. Third, the district court awarded excessive
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damages without proper findings or any admissible evidence on which to base them.
1. e360’s Allegations Are Insufficient To State A Claim For Relief.
Upon default, all of the plaintiff’s well-pleaded factual allegations are taken as true. Black v. Lane, 22 F.3d 1395, 1399 (7th Cir. 1994). Generally, therefore, a default judgment establishes liability against the defendants as to each well-pled count in the complaint. Id. However, entry of default judgment does not bar a party from challenging the sufficiency of the complaint, because a party in default does not admit mere conclusions of law. Id.; see also Cripps v. Life Ins. Co. of N. Am., 980 F.2d 1261, 1267 (9th Cir. 1992) (default judgment set aside because claims were legally unsupportable); 5 C.J.S. Appeal & Error § 718 (1993). Therefore, prior to entering default judgment, the court has a responsibility to apply the unchallenged facts of the complaint to the elements of the asserted claims to determine if the facts alleged constitute a legitimate cause of action. Id.
Here, there is no indication that the district court ever considered whether the facts alleged by e360 sufficiently state claims for tortious interference with contract, tortious interference with prospective economic advantage, defamation per se, and defamation per quod. The district court never considered any of the elements of these claims and never applied the facts of the case to the elements of those claims to determine whether the facts
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sufficiently supported them. This failure alone by the district court is an abuse of discretion warranting reversal of its order.
2. The District Court Abused Its Discretion When It Entered Default Judgment Against Spamhaus Without Holding A Hearing On the Damages Amount.
Upon default judgment, allegations relating to damages are not taken as true. United States v. Di Mucci, 879 F.2d 1488, 1497 (1989). Rather, damages must be proved, and a judgment may not properly be entered without an evidentiary hearing on damages unless the amount claimed is “liquidated or capable of ascertainment from definite figures contained in the documentary evidence or in detailed affidavits.” Dundee Cement Co. v. Howard Pipe & Concrete Products, Inc., 722 F.2d 1319, 1323 (7th Cir. 1983); United States v. De Frantz, 708 F.2d 310, 312 (7th Cir. 1983) (“Rule 55(b)(2) of the Federal Rules of Civil Procedure requires a hearing after entry of default judgment if ‘necessary . . . to determine the amount of damages’”).
As an initial matter, the district court agreed to grant e360’s Motion For Default Judgment prior to even considering whether this motion was amply supported. (A. 169.) (“I am going to grant your motion [for default judgment] on the basis that there is no opposition to it, and it appears none is in the offing.”) Without even a cursory glance at the motion or affidavits allegedly supporting it, the district court agreed to let e360 “win everything by default.” (A. 169.) The district court’s disregard of its responsibility to make even a threshold determination of whether the affidavits were sufficiently detailed to support the
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requested damages was a paramount abuse of discretion. Based on this error alone, the default judgment should be reversed.
Moreover, e360 was awarded $11,716,971.05 in un-liquidated damages claims without an evidentiary hearing. (A. 140-43; see A. 167-169.) The court based its award solely on the conclusory affidavits submitted by e360, which contained no evidence supporting the determinations set forth. The district court took the affidavits at face value without conducting any examination into the sufficiency of those affidavits. Had the district court examined the affidavits, it would have discovered that they were deficient and incapable of supporting any damages award, let alone one in excess of $11 million. Instead, the district court awarded $11,716,971.05 without conducting a damages hearing (A. 140-43), relying solely on the affidavits of David Linhardt, the President of e360, and his attorney, Bartly Loethen. (A. 124-34.)
For an affidavit to be sufficient, it must be based on personal knowledge, set forth facts that would be admissible in evidence, and show affirmatively that the affiant is a competent witness on those matters. Fed. R. Civ. P. 56(e); Johnson v. Nordstrom, Inc., 260 F.3d 727, 736 (7th Cir. 2001). Statements in affidavits about opinion, belief, or conclusions of law are to be given no effect. See Eden v. Klaas, 165 Neb. 323, 328 (Neb. 1957). In this case, Linhardt’s affidavit in support of e360’s requested damages is deficient on its face because it contains opinions, speculation, unqualified expert opinion, and facts not supported by documentary evidence. (A. 129-31.) For instance, in paragraph 32, Linhardt states that e360 lost $2,465,000 in revenue because certain active
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and pending contracts were cancelled. (A. 129.) Although Linhardt provides the names of alleged cancelled contracts, he failed to submit copies of those contracts, and further failed to offer details about the duration or amounts of those contracts. (Id.) Additionally, Linhardt neglected to provide any basis for how the revenue losses from those lost contracts was calculated. (Id.) Conclusory, self-serving affidavits that are unsupported by an evidentiary record have been held insufficient to support factual findings. Albiero v. City of Kankakee, 246 F.3d 927, 933 (7th Cir. 2001). Accordingly, the court should have conducted a damages hearing and given Spamhaus an opportunity to dispute these unsupported claims.
In addition, Linhardt claims to have lost $9,250,000 in future business opportunities, but failed to adequately support this amount with any documentary evidence. (A. 129.) Although Linhardt states how he calculated “lost enterprise value,” this calculation is based on merely speculative, hearsay statements about the value of unique opt-in email addresses for “most email marketing companies,” but not for e360 in particular. Id. This Court has held that “lost profits…must be supported by credible evidence and not based upon mere guesswork or speculation.” Dresser Indus., Inc., Waukesha Engine Div. v. Gradall Co., 965 F.2d 1442, 1447 (7th Cir. 1992). Because Linhardt is not an expert on calculating lost profits, and failed to present any expert qualifications to make that conclusion, the speculative statements in his affidavit lack a proper foundation and are insufficient to adequately support e360’s damages
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request. By entering a default judgment on this insufficient evidentiary record, the district court abused its discretion and should therefore be reversed.
3. The District Court Abused Its Discretion By Entering a Damages Judgment Against Spamhaus Without Sufficient Evidentiary Support.
A district court’s damages award on default judgment is typically upheld unless the award is clearly excessive. Merrill Lynch Mortg. Corp. v. Narayan, 908 F.2d 246, 253 (7th Cir. 1990). However, recovery on default judgment is limited to damages arising from the acts and injuries proximately caused by the defendant. Greyhound Exhibitgroup, Inc., v. E.L.U.L. Realty Corp., 973 F.2d 155, 158-159 (2d Cir. 1992). Thus, even though liability may be established as a result of the default judgment, e360 must still prove the amount of damages suffered as a result of Spamhaus’ allegedly wrongful conduct. Id.; Flaks v. Koegel, 504 F.2d 702, 707 (2d Cir. 1974).
In this case, e360 failed to prove that its damages proximately flowed from Spamhaus’ acts. None of the factual allegations or affidavits submitted by e360 contain evidence of what services were contracted for, or how Spamhaus’ acts interfered with those contracts. In fact, these cancelled contracts and lost opportunities could be completely unrelated to any conduct by Spamhaus. Nonetheless, the district court entered judgment against Spamhaus in excess of $11 million dollars with no discussion of the supporting evidence. (A. 140-41.) Accordingly, the district court abused its discretion in entering this clearly excessive award.
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4. The District Court Abused Its Discretion By Failing To Enter Findings Of Fact In Support Of The Damages Amount Awarded In The Default Judgment.
Fed. R. Civ. P. 52(a) requires a district court to make findings of fact on damages when entering a default judgment. See In re Uranium Antitrust Litig., 473 F. Supp. 382, 391 (N.D. Ill. 1979). Compliance with Rule 52(a) is mandatory in all actions tried upon the facts without a jury. Dearborn Nat'l Cas. Co. v. Consumers Petroleum Co., 164 F.2d 332, 333 (7th Cir. 1947). Thus, in this case, the district court had an affirmative duty to analyze the proof offered by e360 regarding damages and issue findings of fact supporting its damages award. Despite this affirmative duty, the court failed to make sufficient findings of fact when granting e360’s Motion for Default Judgment, and the default judgment should be reversed.
Indeed, the district court merely stated that e360 had “submitted affidavits to support [its] request for compensatory damages totaling $11,715,000 for tortious interference with existing contractual relations and prospective economic advantage and $1,971.05 in litigation costs.” (A. 140.) Awarding the amount requested by e360, the district court noted that “Spamhaus has not countered Plaintiffs’ claims of entitlement to this relief or the amounts requested.” Id. However, the district court made no findings of fact concerning the sufficiency of the evidence presented by e360 in support of the requested damages. By relying solely on e360’s deficient affidavits without so much as a cursory inspection of whether those affidavits adequately supported the claimed damages, the court neglected its responsibility of holding e360 to its
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burden of proving damages to a reasonable certainty. Dundee Cement Co. v. Howard Pip & Concrete Prods., Inc., 722 F.2d 1319, 1323 (7th Cir. 1983); Durasys, Inc. v. Leyba, 992 F.2d 1465, 1470 (7th Cir. 1993). Thus, because the district court made no findings of fact supporting its award and failed to comply with the mandatory requirements of Rule 52(a), the default judgment should be reversed.
D. Reversing the District Court’s Default Judgment Conforms With the Seventh Circuit’s Preference for Cases to be Tried on the Merits, and Would Allow Spamhaus the Opportunity to Present Its Meritorious Defenses.
Finally, the default judgment should be reversed to comport with the Seventh Circuit’s preference for resolving litigation through the adversarial process. While this court has acknowledged that default judgments are not completely disfavored in this circuit, this court has also held that default judgment should not be used to respond to all litigant misconduct. Stafford v. Mesnik, 63 F.3d 1445, 1450 (7th Cir. 1995). This Court has long held that “[t]he philosophy of modern federal procedure favors trials on the merits,” Dormeyer Co. v. M.J.Sales & Distributing Co., 461 F.2d 40, 43 (7th Cir. 1972) (internal quotations omitted), and that “[a] dismissal with prejudice is particularly disfavored with relatively young cases.” Webber v. Eye Corp., 721 F.2d 1067, 1070 (7th Cir. 1983).
Given that the default judgment was ordered at an early stage in the proceedings before Spamhaus had filed an answer presenting its arguments on the defective service of process and the court’s lack of personal jurisdiction,
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this Court should reverse the trial court’s default judgment. By reversing the default judgment, this Court would allow Spamhaus an opportunity to fully brief and present these arguments, and these important jurisdictional issues at stake in this suit would be resolved through the preferred adversarial process.
Furthermore, reversing the default judgment would allow Spamhaus the opportunity to contest e360’s causes of actions on the merits. Not only does Spamhaus have traditional defenses against e360’s defamation and tortious interference causes of action, Spamhaus is also immune from e360’s claims based on federal statutes — namely the Communications Decency Act (“CDA”) of 1996, 47 U.S.C. § 230, and the Controlling the Assault of Non-Solicited Pornography and Marketings (CAN-SPAM) Act of 2003, 15 U.S.C. §§ 7701-7713. Under the CDA and CAN-SPAM, Spamhaus and ISPs using Spamhaus’ ROKSO list are defined as “internet access servers.” 47 U.S.C. § 231(e)4); 15 U.S.C. § 7702(11). As an “internet access server,” Spamhaus and the users of its ROKSO list are immune from liability related to their blocking of selected e-mail transmissions. According to the CDA:
(2) No provider or user of an interactive computer service shall be held liable on account of (A) any action voluntarily taken in good faith to restrict access to or availability of material that the provider or user considers to be obscene, lewd, lascivious, filthy, excessively violent, harassing, or otherwise objectionable, whether or not such material is constitutionally protected; or (B) any action taken to enable or make available to information content providers or others the technical means to restrict access to [such] material.
47 U.S.C. § 230(C)(2); see also CAN-SPAM, 15 U.S.C. § 7707(c) (2003) (“[n]othing in this Act shall be construed to have any effect on the lawfulness or
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unlawfulness, under any other provision of law, of the adoption, implementation, or enforcement by a provider of Internet access service of a policy of declining to transmit, route, relay, handle, or store certain types of electronic mail messages”).
All of e360’s claims for relief are based on allegations that Spamhaus and ISP’s using the ROKSO list are blocking e360’s e-mail transmissions. Since the CDA and CAN-SPAM expressly protect “internet access servers” from liability for adopting e-mail blocking policies, the CDA and CAN-SPAM serve as a complete defense for Spamhaus. In order to allow this defense to be presented to the district court and fully litigated, this Court should reverse the district court’s default judgment, and allow this case to proceed to a trial on the merits.
II. The District Court’s Injunction Must be Vacated Because the District Court Failed to Apply the Traditional Test Required for Injunctive Relief, Neglected its Duties under Federal Rule of Civil Procedure 65, and Issued an Injunction that Violates the First Amendment.
On July 20, 2006, one day prior to the removal of this case to the federal court, the Circuit Court of Cook County issued a temporary restraining order against Spamhaus, ordering it to remove any references to e360 or Linhardt from the Spamhaus Registry of Known Spam Operations (“ROKSO”). (A. 21-23.) The TRO however, did not preclude Spamhaus from determining, based on its own criteria, that e360 or Linhardt’s future actions warrant inclusion on the ROKSO list. Id. The TRO remained in effect until August 23, 2006, when the district court converted the TRO, which it was not previously aware of until, to
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a Preliminary Injunction in conclusory fashion. (A. 117, 15-66.) On that same day, the district court entered a default order against Spamhaus. (A. 117.]
After the district court entered default, e360 moved for the issuance of a permanent injunction. (Pl.’s Mot. for Default Judgment and Permanent Injunction, Aug. 20, 2006, Docket No. 20.] In its motion for a permanent injunction, e360 failed to cite any authority regarding the requirements for entry of an injunction, failed to list the inquiry the court should undertake, and failed to allege any irreparable injury, inadequate remedies at law, why an equitable remedy is warranted when balancing the hardships of the plaintiff and defendant, and that the public interest would not be disserved by the issuance of the injunction. Id. Despite the lack of the requisite showing, the district court orally granted e360’s motion for default judgment and order for a permanent injunction. (A. 169.) At that time, the court indicated that it would consider the proposed permanent injunction and sign it if “it comports with what I think is appropriate.” Id.
The court entered a permanent injunction on September 13, 2006, ordering Spamhaus to (1) remove e360 from the SBL and ROKSO listing and not take further action, unless Spamhaus demonstrates by “clear and convincing evidence that Plaintiffs have violated relevant United States law;” (2) refrain from listing entire networks or ranges of IP addresses owned by Plaintiffs simply because the addresses are registered to Plaintiffs, without meeting the “clear and convincing evidence” standard for that IP address; (3) post, for a period of six months, “on its website at both the main home page and at the
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ROKSO jump page, a message of 1 inch by 1 inch, the text of which is to be reasonably approved by Plaintiffs, and which, generally, indicates that Plaintiffs were erroneously listed on the website as spammers and that Plaintiffs are not spammers;” (4) refrain from contacting any of e360’s customers or suppliers in an effort to cause that customer to cease doing business with e360; and (5) refrain from contacting any customer or supplier of e360 and allege or assert that Plaintiffs are “spammers” or other like term. (A 140-41.)
In issuing the permanent injunction, the district court failed to apply the traditional test for permanent injunctions and failed to comply with the requirements of Fed. R. Civ. P. 65. A district court’s decision to grant a permanent injunction is reviewed for abuse of discretion. Ebay Inc. v. Mercexchange, LLC, 126 S.Ct. 1837, 1839 (2006). While factual determinations are reviewed for clear error, and legal conclusions are reviewed de novo, either a “factual or legal error may be sufficient to establish an abuse of discretion.” Minnesota Mining & Mfg. Co. v. Pribyl, 259 F.3d 587, 597 (7th Cir. 2001).
A. The District Court erred in not applying the traditional four-part test prior to granting injunctive relief.
This Court has established that a hearing on affirmative injunctive relief is appropriate even when “the facts establishing the necessity for affirmative injunctive relief are not likely to be different from the facts already legally determined by the entry of the default judgment.” United States v. Di Mucci, 879 F.2d 1488, 1497-98 (1989); Geddes v. United Fin. Group, 559 F.2d 557 (9th Cir. 1977). Thus, by entering the permanent injunction without first holding an
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evidentiary hearing, the district court abused its discretion, and the district court’s default judgment should therefore be reversed.
In addition to showing a likelihood of success on the merits, a plaintiff seeking a permanent injunction must prove: (1) it has suffered irreparable injury; (2) any remedies available at law (i.e. money damages) are inadequate to compensate for the injury; (3) when considering the balance of hardships between the plaintiff and defendant, a remedy in equity is warranted; and (4) the public interest would be served by the issuance of the permanent injunction. Ebay Inc. v. Mercexchange, LLC, 126 S.Ct. 1837, 1839 (2006) (reiterating the long-standing requirements for the entry of a permanent injunction); see also Ty, Inc. v. Jones Group, Inc., 237 F.3d 891, 895 (7th Cir. 2001). In Ebay, the Supreme Court vacated an injunction because neither the district court nor the court of appeals applied the traditional four-factor test for injunctive relief. 126 S.Ct. at 1841.
Similarly, in this case, the injunction should be vacated because e360 failed to establish any of the requisite proof under the four-factor test and the district court failed to apply this test. First, when the district court converted the TRO issued by the state court into a preliminary injunction, it appears that the court did not even read the TRO to determine whether it comported with the proper principles of law. (A. 162-64) (court questioned whether a TRO had been entered by the state court and whether it was still effective). When the district court made the preliminary injunction determination, it had no evidence before it about any irreparable injury, inadequate remedies at law, the balance of
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hardships, or public interest considerations. (See, e.g., A. 118-34.) Second, when the district court converted the preliminary injunction into a permanent injunction, it still had no evidence regarding any of these factors. In fact, e360’s motion for entry of a permanent injunction was completely devoid of any of the law or analysis that must be undertaken prior to the entry of an injunction in federal court. Furthermore, the district court failed to enter any findings to support the injunctive relief. In this case, the court never conducted an evidentiary hearing prior to either the entry of the preliminary injunction or the permanent injunction to determine whether it was proper, and failed to consider the requisite factors for injunctive relief. For these reasons, the entry of the permanent injunction should be vacated.
B. The District Court erred because the injunctive relief issued does not comport with the requirements under Federal Rule of Civil Procedure 65.
Federal Rule of Civil Procedure 65 proscribes the requirements for injunctive relief. Rule 65(d) requires specificity in the terms of an injunction:
[e]very order granting an injunction . . . shall set forth the reasons for its issuance; shall be specific in terms; shall describe in reasonable detail, and not by reference to the complaint or other document, the act or acts sought to be restrained . . ..
This Court has held that injunctions that fail to adequately explain the reasons for issuance should be vacated. For example, in EEOC v. Severn Trent Serv., Inc., 358 F.3d 438, 442, 446 (7th Cir. 2004), this Court vacated an injunction that lacked adequate explanation, finding that “[a]n injunction so poorly buttressed by explanation flunks Fed. R. Civ. P. 65(d).” EEOC, 358 F.3d
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at 442. Although the explanation can be oral or written and the absence of an explanation can be forgiven if the justification is clear from the record, EEOC, 358 F.3d at 442, the “specificity provisions of Rule 65(d) are no mere technical requirements,” Atiyeh v. Capps, 449 U.S. 1312, 1317 (1981) (quoting Schmidt v. Lessard, 414 U.S. 473, 476 (1974)). Rather, Rule 65 is intended to prevent confusion and uncertainty about an injunctive order and to allow for proper appellate review of the injunction. Atiyeh, 449 U.S. at 1317. Both the preliminary injunction entered on August 23, 2006 and the permanent injunction entered on September 13, 2006 fail to provide any reasoning, much less adequate reasoning, for their issuance. (See A. 117, 140-41.)
Furthermore, the permanent injunction issued in this case is vague and overbroad. “A court has an independent duty to assure that the injunctions it issues comply with the directive of Fed. R. Civ. P. 65(d).” Chicago Bd. of Ed. v. Substance, Inc., 354 F.3d 624, 632 (7th Cir. 2003) (internal citations omitted) (finding the injunction at issue “appallingly” bad because it contained gibberish, and some terms were opaque and overbroad). A “district court has not only the power but also the duty to refuse to enter a defective injunction even if neither party objects.” Chicago & North Western Trans. Co. v. Ry. Labor Exec. Assoc., 908 F.2d 144, 149 (7th Cir. 1990). The district court, in this case, failed to comply with that duty.
The permanent injunction issued has many defects. First, the injunction is not specific in terms of who is covered. Linhardt has a multitude of businesses that he regularly creates for the purpose of sending “bulk” email. (See e.g., A.
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34-110.) It is unclear whether the injunction is meant to cover only the companies owned or controlled by e360 at the time of the entry of the injunction or forever into the future. Second, the injunction is unclear about who is included as a customer or supplier of e360, let alone how Spamhaus could determine that. (A 140-41.) Also, the injunction requires that Spamhaus keep e360 and Linhardt off the SBL and ROKSO lists “unless Spamhaus can demonstrate by clear and convincing evidence” that a U.S. “law” has been violated. (A. 140-41.) However, the injunction requires that e360 be provided with an opportunity to show that the offending email was not sent in violation of U.S. law. (A. 141.) This requirement is vague because there is no indication of what kind of proof on the part of e360 or what standard is required for this proof.
Furthermore, the legal standard of “clear and convincing” is inconsistent with federal law, making the injunction confusing and unclear. Ordinarily, federal civil actions apply a “preponderance of the evidence” burden of proof. See Kampmier v. Emeritus Corp., 472 F.3d 930, 942 (7th Cir. 2007) (applying a “preponderance of the evidence” standard in a case involving the ADA, Title VII, and ERISA claims); Oshana v. Coca-Cola Co., 472 F.3d 506, 510-11 (7th Cir. 2006) (applying a “preponderance of the evidence” standard in a consumer class action). The injunction requires Spamhaus to prove by “clear and convincing evidence” that e360 violated U.S. law prior to placing the company back on the SBL or ROKSO listing. In issuing the injunction, the court failed to provide any basis for shifting the burden of proof onto Spamhaus or for
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requiring the heightened “clear and convincing” standard. (See, e.g., A. 140-41.) The “clear and convincing” standard imposes a higher burden on Spamhaus than was originally placed on e360 to prove defamation or other liability.
Thus, the injunction does not comport with the requirements established in Fed. R. Civ. P. 65(d), requiring specificity in terms to prevent confusion and uncertainty and to allow for proper appellate review of the injunction issued by the district court. The injunction fails to meet those specifications and should be vacated.
C. The Permanent Injunction Issued by the District Court Violates the First Amendment and Must be Reversed.
The injunction violates the First Amendment because it constitutes an impermissible prior restraint on speech, compels speech, and is impermissibly broad. Constitutional issues are reviewed de novo by federal circuit courts. United States v. Wilson, 154 F.3d 658, 662 (7th Cir. 1998); Sequoia Books, Inc. v. Ingemunson, 901 F.2d 630, 633 (7th Cir. 1990); see also Gaudiya Vaishnava Soc. v. San Francisco, 952 F.2d 1059, 1062 (9th Cir. 1991) (reviewing de novo a permanent injunction for constitutional infirmity). By broadly restricting Spamhaus’ ability to list e360 as a “spammer,” the district court’s injunction constitutes an unconstitutional prior restraint on Spamhaus’ First Amendment freedoms and must be reversed. By ordering Spamhaus to post a specific opinion message on its website, the injunction unconstitutionally compels speech and must be reversed.
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1. The Injunction Constitutes an Impermissible Prior Restraint and is Facially Invalid.
The Supreme Court defines an injunctive “prior restraint” as a judicial order “forbidding certain communications when issued in advance of the time that such communications are to occur.” Alexander v. United States, 509 U.S. 544, 550 (1993) (quoting M. Nimmer, Nimmer on Freedom of Speech §4.03, p. 4-14 (1984)). Prior restraints on speech and publication are the most serious and the least tolerable infringements on First Amendment rights. United States v. Kaun, 827 F.2d 1144, 1154 (7th Cir. 1987) (Ripple, J., concurring). An injunction that suppresses, on the basis of previous publications, the distribution of literature of any kind, is an unconstitutional prior restraint on defendants’ First Amendment rights and must be vacated. Org. for a Better Austin v. Keefe, 402 U.S. 415, 418-19 (1971).
Further, the unpopular or bothersome nature of the message content to its recipients does not remove the message from the reach of the First Amendment. See Keefe, 402 U.S. at 419 (overturning an injunction prohibiting leaflet distributors who were “engaged openly and vigorously in making the public aware of” practices they believed to be wrong). Even expressions that are unacceptable may not be subjected to a prior restraint, provided the means of communication are peaceful. See id.; Alexander, 509 U.S. at 550 (a permanent injunction is a classic prior restraint, even if it is imposed after a finding of liability). Here, the injunction issued by the district court constitutes a prior restraint because it prohibits Spamhaus’ communications before they occur.
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(A. 140-41.) Specifically, the injunction suppresses Spamhaus’ publication of the SBL and ROKSO listings and its expressions of opinion regarding future conduct by e360 on the basis of prior publications and opinions relating to the pre-suit conduct of e360. (Id.) Thus, the trial court’s injunction is presumptively invalid.
The injunction’s requirement that Spamhaus must overcome a “clear and convincing” hurdle before expressing its opinions ignores the nature of First Amendment protections. Although the published assertion that e360 is a “spammer” may be unpopular to e360 or any other listeners, the unpopular nature of the opinion expressed in that message does not place the message outside the scope of the First Amendment. The activities of Spamhaus “openly and vigorously” make the “public aware of” practices that it believes to be wrong; the activities were also conducted in a peaceful manner. They are, thus, absolutely protected. The injunction’s requirement that, prior to publishing its opinions, Spamhaus must demonstrate by “clear and convincing evidence” that e360 was in violation of United States law flouts the First Amendment. (A. 141.)
For the foregoing reasons, the injunctive relief that e360 sought and successfully obtained constitutes a blatant violation of the First Amendment, and should thus be reversed.
2. The Injunction Amounts to Impermissible Compelled Speech.
The First Amendment embodies the principle that “‘each person should decide for himself or herself the ideas and beliefs deserving of expression, consideration, and adherence.’” Entm’t Software Assoc. v. Blagojevich, 404 F.
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Supp. 2d 1051, 1071 (N.D. Ill. 2005) (quoting Turner Broad. Sys. v. FCC, 512 U.S. 622, 641 (1994)). Except in the context of commercial advertising,2 the government may not compel affirmance of a belief with which the speaker disagrees. Hurley v. Irish-American Gay, Lesbian & Bisexual Group, 515 U.S. 557, 574-75 (1995); Wooley v. Maynard, 430 U.S. 705, 714 (1977) (the First Amendment protects the right to refrain from speaking at all); Entm’t Software Assoc., 404 F. Supp. 2d at 1069 (holding statutes that required defendants to affix a sticker on video games to be in violation of First Amendment, where statutes required retailers to replace its chosen method of describing a rating system with a type of presentation mandated by the State).
This injunction constitutes impermissible compelled speech. It requires Spamhaus to publish a message expressing an opinion in the shape of a 1 inch by 1 inch square containing the assertion that although e360 is not a “spammer,” and was “erroneously listed on the website as” a “spammer.” (A. 141.) The injunction strong-arms Spamhaus into disseminating on its website an opinion about the nature of e360’s activities that contradicts its own opinion. It forces Spamhaus to revisit its assertion that e360 is a “spammer,” arrived at on the basis of established spamming trap technologies and
2 The activity by Spamhaus is not commercial speech because it does not even propose a commercial transaction. See Va. State Bd. of Pharmacy v. Va. Citizens Consumer Council, Inc., 425 U.S. 748, 771 (1976). If, however, the Court deemed it commercial speech, the activity is still protected by the First Amendment because the expressions at issue concern lawful activity and are not misleading, and there is no substantial government interest served by the speech restriction. Greater New Orleans Broad. Assoc., Inc. v. United States, 527 U.S. 173, 174 (1999).
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supported by the internet industry, and to displace it with a message that is mandated by the district court. This injunction cannot withstand constitutional review.
3. The Injunction is Impermissibly Broad.
As the Supreme Court has noted, an injunctive “order issued in the area of First Amendment rights must be couched in the narrowest terms that will accomplish the pin-pointed objective permitted by constitutional mandate and the essential needs of the public order,” and thus the “order must be tailored as precisely as possible to the exact needs of the case.” Carroll v. President and Com’rs of Princess Anne, 393 U.S. 175, 183-84 (1968). When employing an injunction, a court may not “broadly stifle fundamental personal liberties when the end can be more narrowly achieved.” Shelton v. Tucker, 364 U.S. 479, 488 (1960).
The district court’s permanent injunction against Spamhaus is not tailored to the exact needs of the case. First, the injunction does not specify which businesses owned or controlled by e360 are covered under the injunction, nor does it make clear who constitutes a “customer or supplier” of e360. (See, e.g., A. 140-41.) Given the injunction’s uncertain terms, it creates a potential “chilling effect” on Spamhaus’ ability to freely speak regarding “spammers” and their conduct.
Second, the Supreme Court has consistently recognized that damages, and not injunctions, are the appropriate remedy in defamation cases. For example, in Francis v. Flinn, 118 U.S. 385 (1886), the Supreme Court expressed the
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general rule that equitable relief is not permissible when there are remedies at law: “If the publications…are false and injurious, [the injured party] can prosecute the publishers for libel. If a court of equity can interfere and use its remedy of injunction in such cases, it would draw itself the greater part of the litigation belonging to courts of law.” Id. at 389; see also Pennekamp v. Florida, 328 U.S. 331, 348-49 (1946) (reversing a contempt citation against a newspaper publisher accused of publishing editorials that were purportedly contemptuous of judges because “when the statements [about a judge] amount to defamation, a judge has such a remedy in damages for libel as do other public servants”).
In this case, it is clear that an appropriate remedy exists at law. If e360 has been defamed, money damages provide a remedy. In fact, the district court ordered Spamhaus to pay over $11 million in damages. (A. 140.) By issuing an injunction, however, the district court has imperiled the First Amendment freedom of speech and departed from the traditional means of addressing e360’s purported injuries.
Third, the lack of clarity in the permanent injunction threatens to place the court in the role of perpetual censor, constantly being called upon to determine what speech is allowed and what is prohibited. The Supreme Court has noted that courts “cannot ignore the reality of the problems of managing” injunctions limiting speech. Neb. Press Ass’n v. Stuart, 427 U.S. 539, 565 (1976). By entering the permanent injunction here, the district court not only created an indefinite prior restraint on Spamhaus’ free speech rights, but also created a
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situation where the parties could perpetually return to court to litigate the terms and meaning of the injunction. Given all of these preceding reasons, the injunction is an unconstitutional, overly-broad infringement on Spamhaus’ First Amendment rights and must be reversed.
III. The District Court Erred in Denying Spamhaus’ Motion to Vacate Default Judgment Under Federal Rule of Civil Procedure 60(b).
The district court abused its discretion by denying Spamhaus’ Rule 60(b) motion without granting Spamhaus an opportunity to fully brief its motion or present extrinsic evidence regarding Spamhaus’ service of process and personal jurisdiction-related defenses.
A. The District Court Abused its Discretion by Refusing to Vacate the Default Judgment and Ruling Without Allowing Spamhaus an Opportunity to Present Evidence to Support its Rule 60(b)(4) Motion that the Default Judgment was Void for Lack of Personal Jurisdiction.
While failing to determine whether personal jurisdiction exists prior to entering the default judgment alone constitutes grounds for vacating the default judgment, the district court compounded the error by hastily refusing to vacate the default judgment when presented with Spamhaus’ Rule 60(b)(4) motion. It has long been established that “a defendant is entitled to one fair opportunity to litigate issues of fact and law essential to a court’s exercise of personal jurisdiction over that defendant,” and that a defendant “may take that opportunity in the original court or may take the riskier path of waiting until the plaintiff tries to enforce a default judgment from a distant court.” Bd. of Trustees v. Elite Erectors, Inc., 64 F. Supp. 2d 839, 843 (S.D. Ind. 1999); see
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also Insurance Corp. of Ireland, Ltd. v. Compagnie des Bauxites de Guinee, 456 U.S. 694, 706 (1982); Adam v. Saenger, 303 U.S. 59, 62 (1938). When the district court failed to inquire into the propriety of the service of process or the court’s personal jurisdiction over Spamhaus prior to entering the default judgment, Spamhaus pursued its “one fair opportunity to litigate issues of fact and law essential to [the district] court’s exercise of personal jurisdiction” by filing both its instant appeal of the default judgment (A. 144-45) and its motion to vacate the default judgment pursuant to Rule 60(b). (A. 194.)
Inherent in this opportunity to litigate the effectiveness of service and the court’s personal jurisdiction is the right to present evidence on these jurisdictional questions. See Thompson v. Whitman, 85 U.S. (18 Wall.) 457 (1874) (finding defendant should have had an opportunity to offer evidence contradicting the issuing court’s personal jurisdiction in his collateral challenge to the default judgment); see also Morrell v. Mock, 270 F.3d 1090, 1096 (7th Cir. 2001) (finding that a defaulted party has a right to “ignore the court’s proceedings, risk a default judgment, and resist enforcement in a collateral attack on the first court’s jurisdiction.”); United States v. County of Cook, 167 F.3d 381, 388 (7th Cir. 1999) (stating that “a party that simply refuses to appear may contend in a later case that the first tribunal lacked jurisdiction”); Elite Erectors, Inc., 64 F. Supp. 2d at 845 (“a defendant has a right to present evidence to dispute allegations which, if true, might establish personal jurisdiction”).
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Spamhaus was not given an opportunity to proffer any evidence regarding the deficiencies in service of process or the court’s lack of personal jurisdiction prior to the denial of the Rule 60(b) Motion. Spamhaus specifically filed a “Motion to Vacate Default Judgment and for Leave to File a Memorandum in Support” (emphasis added) because, as the motion noted, Spamhaus’ counsel “had been retained for less than two weeks … [and] have not had sufficient time to complete their factual investigation and analysis of all the issues raised by [the district] Court’s rulings to date.” (A. 151.) Furthermore, Spamhaus could not have offered any evidence regarding the ineffective service of process or the court’s lack of personal jurisdiction at that time without running afoul of Federal Rule of Civil Procedure 11 and facing potential sanctions: as Spamhaus’ motion specifically states, “a complete review of this Court’s rulings to date has been restricted in part because the transcripts from this Court’s proceedings [entering both the default and the default judgment] are not yet available, even though they have been ordered.” (A. 152.) Thus, “[i]n light of the limited time that counsel has been involved in this case and the fact that counsel has not had access to the transcripts from the prior court proceedings,” Spamhaus requested additional time to file a memorandum in support of the motion. (A. 154.)
The district court, however, denied Spamhaus its opportunity to present extrinsic evidence and affidavits regarding service of process and personal jurisdiction. In a hearing on October 31, 2006, after counsel for Spamhaus stated that “the gist of the principal [motion] is a motion to vacate, and we
51
would like to have an opportunity to brief that,” the district court tersely responded “No. You can tell me what is behind it. I do not think these are complicated motions.” (A. 175.) Following a discussion that centered largely on the impact of the withdrawal of Spamhaus’ counsel and answer had on Spamhaus’ motion to vacate under Rule 60(b)(1) — without any inquiry into service of process or personal jurisdiction — the district court denied the motion. According to the court, “there is no question” that the court “ha[d] jurisdiction over subject matter, as well as the person or presence of the defendant in the first instance,” and “[t]here was not anything about this case that at least suggested itself to me that I lacked jurisdiction, either over the person of the defendant or the subject matter of the case.” (A. 182.)
This contention, however, is disingenuous. First, as noted above, there was nothing in the federal record before the district court suggesting that service of process had been effectuated properly in accordance with the Hague Convention and United States law. Furthermore, as the court itself observed, in the first hearing, more information regarding the citizenship of Spamhaus and e360 was needed. (A. 160.) The district court had noted that jurisdiction was questionable and needed “better presentation,” yet never returned to the topic to determine whether it had personal jurisdiction over Spamhaus. (A. 160) Instead, the district court refused to allow Spamhaus the opportunity to make a “better presentation” as to why service of process was ineffective and personal jurisdiction was lacking (Id.) Thus, the default judgment should be vacated.
52
The real reason that “not anything about this case” suggested a failure in service of process or a lack of personal jurisdiction is because the district court prevented Spamhaus from presenting any evidentiary record regarding these questions. (A. 182) By failing to allow Spamhaus a chance to fully brief its motion to vacate the default judgment with extrinsic evidence and affidavits supporting Spamhaus’ claims that proper service of process was lacking and that the district court lacked personal jurisdiction, the district court abused its discretion. Its refusal to vacate the default judgment should be reversed and the case should be remanded with instructions to the district court to allow Spamhaus to supplement the record with evidence regarding the court’s lack of personal jurisdiction.
CONCLUSION
For the reasons set forth above, Defendant-Appellant The Spamhaus Project respectfully requests this court reverse the district court’s default judgment order in favor of Plaintiff-Appellee e360 Insight, LLC. Alternatively, Defendant-Appellant The Spamhaus Project respectfully requests this court reverse the district court’s denial of Defendant-Appellant’s Motion to Vacate the Default Judgment and For Leave to File a Memorandum In Support, and remand the
-53-
Motion to the district court for briefing and proceedings regarding whether service of process was effected and whether the district court has personal jurisdiction over Defendant-Appellant The Spamhaus Project.
DATED: This 21st day of February, 2007.
Respectfully submitted,
THE SPAMHAUS PROJECT
By: ____________________________
One of Its Attorneys
Matthew M. Neumeier
Craig C. Martin
Carrie A. Fino
330 NORTH WABASH AVENUE
One IBM Plaza
Chicago, IL 60611
(312) 222-9350
-54-
CERTIFICATE OF COMPLIANCE WITH TYPE-VOLUME LIMITATION, TYPEFACE REQUIREMENTS AND TYPE-STYLE REQUIREMENTS
1. This brief complies with the type-volume requirements of Fed. R. App. P. 32(a)(7)(B) because this brief contains 13,799 words excluding the parts of the brief exempted by Fed. R. App. P. 32(a)(7)(B)iii.
2. This brief complies with the typeface requirements of Fed. R. App. P. 32(a)(5) and the type style requirements of Fed. R. App. P. 32(a)(6) because this brief has been prepared in a proportionally spaced typeface using Microsoft Office Word 2003 in Bookman Old Style 12 font.
____________________________________
Matthew M. Neumeier
Dated: February 21, 2007
-55-
CIRCUIT RULE 30(d) CERTIFICATION
I, Matthew M. Neumeier, hereby certify pursuant to Circuit Rule 30(d) that all of the materials required by Circuit Rule 30(a) and 30(b) are included in the Appendix.
____________________________________
Matthew M. Neumeier
Dated: February 21, 2007
-56-
CERTIFICATE OF COMPLIANCE WITH CIRCUIT RULE 31(e)
The undersigned, one of the attorneys for Defendant-Appellant, hereby certifies that, pursuant to Circuit Rule 31(e), I have filed electronically versions of the brief and all of the appendix items that are available in non-scanned PDF format, and I hereby verify that the same is virus free.
____________________________________
Matthew M. Neumeier
Dated: February 21, 2007
-57-
CERTIFICATE OF SERVICE
I, Matthew M. Neumeier, an attorney, hereby certify that I served: (1) two copies of the foregoing Brief of Defendant-Appellant The Spamhaus Project; (2) two copies of the Appendix of Defendant-Appellant The Spamhaus Project; and (3) a CD containing the Brief of Defendant-Appellant The Spamhaus Project in a searchable PDF format upon:
Joseph L. Kish
Kristen M. Lehner
Bartly Joseph Loethen
Synergy Law Group, L.L.C.
730 West Randolph Street
6th Floor
Chicago, IL 60661
Phone: (312) 454-0015
Fax: (312) 454-0261
by depositing a copy of same in the United States Mail, postage prepaid, on this 21st day of February 2007.
____________________________________
Matthew M. Neumeier
Amicus Curae Brief
Nos. 06-3779 and 06-4169
IN THE UNITED STATE COURT OF APPEALS
FOR THE SEVENTH CIRCUIT
e360 INSIGHT, LLC, and Illinois
Limited Liability Company, and
DAVID LINHARDT, an individual,
Plaintiffs-Appellees,
vs.
THE SPAMHAUS PROJECT, a
company limited by guarantee and
organized under the laws of England,
a/k/a THE SPAMHAUS PROJECT,
LTD., Defendant-Appellant.
Appeal from the United States District Court
for the Northern District of Illinois,
District Court No. 06 C 3958
The Honorable Charles P. Kocoras, District Judge
BRIEF OF APEXIS AG; BEYOND SECURITY, INC.; BRANDENBURG INTERNET WORKING; BRIGHT WINGS, INC.;
CHANGEIP.COM; COALITION AGAINST UNSOLICITED COMMERCIAL EMAIL (CAUCE) - US; DATRAN MEDIA CORP.;
EMAILLABS; MICHAEL GEIST; HABEAS, INC.; INTERNET LAW GROUP, PLLC; INNOVYX, INC.; INTERNET TOOLS,
INC.; THE INSTITUTE FOR SPAM AND INTERNET PUBLIC POLICY (ISIPP); CHRIS LEWIS; JOHN LEVINE;
MAILSHELL INC.; MV COMMUNICATIONS, INC.; RETURN PATH, INC.; SECURE COMPUTING CORP.; SNERTSOFT;
SPIN, S.R.L.; SURBL; TALKBIZ, INC.; UNSPAM TECHNOLOGIES, INC.; PAUL VIXIE; WEBMAIL.US, INC.;
WHIZARDRIES, INC.; AND DEREK WYATT, MP IN SUPPORT OF
DEFENDANT-APPELLANT AND REVERSAL
Matthew B. Prince
Adjunct Professor of Internet Technology Law at John Marshall Law School
9prince@jmls.edu
1901 Prospector Avenue,
Suite 200
Park City, UT 84060
(435)615-9205
February 28, 2007
CIRCUIT RULE 26.1 DISCLOSURE STATEMENT
Appellate Court No: 06-3779
Short Caption: e360 Insight, LLC et al. v. The Spamhaus Project
To enable the judges to determine whether recusal is necessary or appropriate, an attorney for a non-governmental party or amicus curiae, or a private attorney representing a government party, must furnish a disclosure statement providing the following information in compliance with Circuit Rule 26.1 and Fed. R. App. P. 26.1.
The Court prefers that the disclosure statement be filed immediately following docketing; but, the disclosure statement must be filed within 21 days of docketing or upon the filing of a motion, response, petition, or answer in this court, whichever occurs first. Attorneys are required to file an amended statement to reflect any material changes in the required information. The text of the statement must also be included in front of the table of contents of the party’s main brief. Counsel is required to complete the entire statement and to use N/A for any information that is not applicable if this form is used.
(1) The full name of every party that the attorney represents in the case (if the party is a corporation, you must provide the corporate disclosure information required by Fed. R. App. P. 26.1 by completing item #3):
Apexis AG
(2) The names of all law firms whose partners or associates have appeared for the party in the case (including proceedings in the district court or before an administrative agency) or are expected to appear for the party in this court:
Matthew B. Prince, Attorney at Law
(3) If the party or amicus is a corporation:
i) Identify all its parent corporations, if any; and
None.
ii) List any publicly held company that owns 10% or more of the party’s or amicus’ stock:
None.
Attorney’s Signature: s/Matthew B. Prince Date: 02-28-07
Attorney’s Printed Name: Matthew B. Prince
Please indicate if you are Counsel of Record for the above listed parties pursuant to Circuit Rule 3(d). Yes X No _____
Address: 1901 Prospector Avenue, Suite 200, Park City, UT 84060
Phone Number: (435) 615-9205 Fax Number: (435) 615-9211
E-Mail Address: 9prince@jmls.edu
CIRCUIT RULE 26.1 DISCLOSURE STATEMENT
Appellate Court No: 06-3779
Short Caption: e360 Insight, LLC et al. v. The Spamhaus Project
To enable the judges to determine whether recusal is necessary or appropriate, an attorney for a non-governmental party or amicus curiae, or a private attorney representing a government party, must furnish a disclosure statement providing the following information in compliance with Circuit Rule 26.1 and Fed. R. App. P. 26.1.
The Court prefers that the disclosure statement be filed immediately following docketing; but, the disclosure statement must be filed within 21 days of docketing or upon the filing of a motion, response, petition, or answer in this court, whichever occurs first. Attorneys are required to file an amended statement to reflect any material changes in the required information. The text of the statement must also be included in front of the table of contents of the party’s main brief. Counsel is required to complete the entire statement and to use N/A for any information that is not applicable if this form is used.
(1) The full name of every party that the attorney represents in the case (if the party is a corporation, you must provide the corporate disclosure information required by Fed. R. App. P. 26.1 by completing item #3):
Beyond Security Inc.
(2) The names of all law firms whose partners or associates have appeared for the party in the case (including proceedings in the district court or before an administrative agency) or are expected to appear for the party in this court:
Matthew B. Prince, Attorney at Law
(3) If the party or amicus is a corporation:
i) Identify all its parent corporations, if any; and
None.
ii) List any publicly held company that owns 10% or more of the party’s or amicus’ stock:
None.
Attorney’s Signature: s/Matthew B. Prince Date: 02-28-07
Attorney’s Printed Name: Matthew B. Prince
Please indicate if you are Counsel of Record for the above listed parties pursuant to Circuit Rule 3(d). Yes X No _____
Address: 1901 Prospector Avenue, Suite 200, Park City, UT 84060
Phone Number: (435) 615-9205 Fax Number: (435) 615-9211
E-Mail Address: 9prince@jmls.edu
CIRCUIT RULE 26.1 DISCLOSURE STATEMENT
Appellate Court No: 06-3779
Short Caption: e360 Insight, LLC et al. v. The Spamhaus Project
To enable the judges to determine whether recusal is necessary or appropriate, an attorney for a non-governmental party or amicus curiae, or a private attorney representing a government party, must furnish a disclosure statement providing the following information in compliance with Circuit Rule 26.1 and Fed. R. App. P. 26.1.
The Court prefers that the disclosure statement be filed immediately following docketing; but, the disclosure statement must be filed within 21 days of docketing or upon the filing of a motion, response, petition, or answer in this court, whichever occurs first. Attorneys are required to file an amended statement to reflect any material changes in the required information. The text of the statement must also be included in front of the table of contents of the party’s main brief. Counsel is required to complete the entire statement and to use N/A for any information that is not applicable if this form is used.
(1) The full name of every party that the attorney represents in the case (if the party is a corporation, you must provide the corporate disclosure information required by Fed. R. App. P. 26.1 by completing item #3):
Brandenburg Internet Working
(2) The names of all law firms whose partners or associates have appeared for the party in the case (including proceedings in the district court or before an administrative agency) or are expected to appear for the party in this court:
Matthew B. Prince, Attorney at Law
(3) If the party or amicus is a corporation:
i) Identify all its parent corporations, if any; and
None.
ii) List any publicly held company that owns 10% or more of the party’s or amicus’ stock:
None.
Attorney’s Signature: s/Matthew B. Prince Date: 02-28-07
Attorney’s Printed Name: Matthew B. Prince
Please indicate if you are Counsel of Record for the above listed parties pursuant to Circuit Rule 3(d). Yes X No _____
Address: 1901 Prospector Avenue, Suite 200, Park City, UT 84060
Phone Number: (435) 615-9205 Fax Number: (435) 615-9211
E-Mail Address: 9prince@jmls.edu
CIRCUIT RULE 26.1 DISCLOSURE STATEMENT
Appellate Court No: 06-3779
Short Caption: e360 Insight, LLC et al. v. The Spamhaus Project
To enable the judges to determine whether recusal is necessary or appropriate, an attorney for a non-governmental party or amicus curiae, or a private attorney representing a government party, must furnish a disclosure statement providing the following information in compliance with Circuit Rule 26.1 and Fed. R. App. P. 26.1.
The Court prefers that the disclosure statement be filed immediately following docketing; but, the disclosure statement must be filed within 21 days of docketing or upon the filing of a motion, response, petition, or answer in this court, whichever occurs first. Attorneys are required to file an amended statement to reflect any material changes in the required information. The text of the statement must also be included in front of the table of contents of the party’s main brief. Counsel is required to complete the entire statement and to use N/A for any information that is not applicable if this form is used.
(1) The full name of every party that the attorney represents in the case (if the party is a corporation, you must provide the corporate disclosure information required by Fed. R. App. P. 26.1 by completing item #3):
Bright Wings, Inc.
(2) The names of all law firms whose partners or associates have appeared for the party in the case (including proceedings in the district court or before an administrative agency) or are expected to appear for the party in this court:
Matthew B. Prince, Attorney at Law
(3) If the party or amicus is a corporation:
i) Identify all its parent corporations, if any; and
None.
ii) List any publicly held company that owns 10% or more of the party’s or amicus’ stock:
None.
Attorney’s Signature: s/Matthew B. Prince Date: 02-28-07
Attorney’s Printed Name: Matthew B. Prince
Please indicate if you are Counsel of Record for the above listed parties pursuant to Circuit Rule 3(d). Yes X No _____
Address: 1901 Prospector Avenue, Suite 200, Park City, UT 84060
Phone Number: (435) 615-9205 Fax Number: (435) 615-9211
E-Mail Address: 9prince@jmls.edu
CIRCUIT RULE 26.1 DISCLOSURE STATEMENT
Appellate Court No: 06-3779
Short Caption: e360 Insight, LLC et al. v. The Spamhaus Project
To enable the judges to determine whether recusal is necessary or appropriate, an attorney for a non-governmental party or amicus curiae, or a private attorney representing a government party, must furnish a disclosure statement providing the following information in compliance with Circuit Rule 26.1 and Fed. R. App. P. 26.1.
The Court prefers that the disclosure statement be filed immediately following docketing; but, the disclosure statement must be filed within 21 days of docketing or upon the filing of a motion, response, petition, or answer in this court, whichever occurs first. Attorneys are required to file an amended statement to reflect any material changes in the required information. The text of the statement must also be included in front of the table of contents of the party’s main brief. Counsel is required to complete the entire statement and to use N/A for any information that is not applicable if this form is used.
(1) The full name of every party that the attorney represents in the case (if the party is a corporation, you must provide the corporate disclosure information required by Fed. R. App. P. 26.1 by completing item #3):
ChangeIP.com
(2) The names of all law firms whose partners or associates have appeared for the party in the case (including proceedings in the district court or before an administrative agency) or are expected to appear for the party in this court:
Matthew B. Prince, Attorney at Law
(3) If the party or amicus is a corporation:
i) Identify all its parent corporations, if any; and
None.
ii) List any publicly held company that owns 10% or more of the party’s or amicus’ stock:
None.
Attorney’s Signature: s/Matthew B. Prince Date: 02-28-07
Attorney’s Printed Name: Matthew B. Prince
Please indicate if you are Counsel of Record for the above listed parties pursuant to Circuit Rule 3(d). Yes X No _____
Address: 1901 Prospector Avenue, Suite 200, Park City, UT 84060
Phone Number: (435) 615-9205 Fax Number: (435) 615-9211
E-Mail Address: 9prince@jmls.edu
CIRCUIT RULE 26.1 DISCLOSURE STATEMENT
Appellate Court No: 06-3779
Short Caption: e360 Insight, LLC et al. v. The Spamhaus Project
To enable the judges to determine whether recusal is necessary or appropriate, an attorney for a non-governmental party or amicus curiae, or a private attorney representing a government party, must furnish a disclosure statement providing the following information in compliance with Circuit Rule 26.1 and Fed. R. App. P. 26.1.
The Court prefers that the disclosure statement be filed immediately following docketing; but, the disclosure statement must be filed within 21 days of docketing or upon the filing of a motion, response, petition, or answer in this court, whichever occurs first. Attorneys are required to file an amended statement to reflect any material changes in the required information. The text of the statement must also be included in front of the table of contents of the party’s main brief. Counsel is required to complete the entire statement and to use N/A for any information that is not applicable if this form is used.
(1) The full name of every party that the attorney represents in the case (if the party is a corporation, you must provide the corporate disclosure information required by Fed. R. App. P. 26.1 by completing item #3):
Coalition Against Unsolicited Commercial Email (CAUCE) - U.S.
(2) The names of all law firms whose partners or associates have appeared for the party in the case (including proceedings in the district court or before an administrative agency) or are expected to appear for the party in this court:
Matthew B. Prince, Attorney at Law
(3) If the party or amicus is a corporation:
i) Identify all its parent corporations, if any; and
None.
ii) List any publicly held company that owns 10% or more of the party’s or amicus’ stock:
None.
Attorney’s Signature: s/Matthew B. Prince Date: 02-28-07
Attorney’s Printed Name: Matthew B. Prince
Please indicate if you are Counsel of Record for the above listed parties pursuant to Circuit Rule 3(d). Yes X No _____
Address: 1901 Prospector Avenue, Suite 200, Park City, UT 84060
Phone Number: (435) 615-9205 Fax Number: (435) 615-9211
E-Mail Address: 9prince@jmls.edu
CIRCUIT RULE 26.1 DISCLOSURE STATEMENT
Appellate Court No: 06-3779
Short Caption: e360 Insight, LLC et al. v. The Spamhaus Project
To enable the judges to determine whether recusal is necessary or appropriate, an attorney for a non-governmental party or amicus curiae, or a private attorney representing a government party, must furnish a disclosure statement providing the following information in compliance with Circuit Rule 26.1 and Fed. R. App. P. 26.1.
The Court prefers that the disclosure statement be filed immediately following docketing; but, the disclosure statement must be filed within 21 days of docketing or upon the filing of a motion, response, petition, or answer in this court, whichever occurs first. Attorneys are required to file an amended statement to reflect any material changes in the required information. The text of the statement must also be included in front of the table of contents of the party’s main brief. Counsel is required to complete the entire statement and to use N/A for any information that is not applicable if this form is used.
(1) The full name of every party that the attorney represents in the case (if the party is a corporation, you must provide the corporate disclosure information required by Fed. R. App. P. 26.1 by completing item #3):
Datran Media Corp.
(2) The names of all law firms whose partners or associates have appeared for the party in the case (including proceedings in the district court or before an administrative agency) or are expected to appear for the party in this court:
Matthew B. Prince, Attorney at Law
(3) If the party or amicus is a corporation:
i) Identify all its parent corporations, if any; and
None.
ii) List any publicly held company that owns 10% or more of the party’s or amicus’ stock:
None.
Attorney’s Signature: s/Matthew B. Prince Date: 02-28-07
Attorney’s Printed Name: Matthew B. Prince
Please indicate if you are Counsel of Record for the above listed parties pursuant to Circuit Rule 3(d). Yes X No _____
Address: 1901 Prospector Avenue, Suite 200, Park City, UT 84060
Phone Number: (435) 615-9205 Fax Number: (435) 615-9211
E-Mail Address: 9prince@jmls.edu
CIRCUIT RULE 26.1 DISCLOSURE STATEMENT
Appellate Court No: 06-3779
Short Caption: e360 Insight, LLC et al. v. The Spamhaus Project
To enable the judges to determine whether recusal is necessary or appropriate, an attorney for a non-governmental party or amicus curiae, or a private attorney representing a government party, must furnish a disclosure statement providing the following information in compliance with Circuit Rule 26.1 and Fed. R. App. P. 26.1.
The Court prefers that the disclosure statement be filed immediately following docketing; but, the disclosure statement must be filed within 21 days of docketing or upon the filing of a motion, response, petition, or answer in this court, whichever occurs first. Attorneys are required to file an amended statement to reflect any material changes in the required information. The text of the statement must also be included in front of the table of contents of the party’s main brief. Counsel is required to complete the entire statement and to use N/A for any information that is not applicable if this form is used.
(1) The full name of every party that the attorney represents in the case (if the party is a corporation, you must provide the corporate disclosure information required by Fed. R. App. P. 26.1 by completing item #3):
EmailLabs (Legal Name: Uptilt, Inc. d/b/a EmailLabs)
(2) The names of all law firms whose partners or associates have appeared for the party in the case (including proceedings in the district court or before an administrative agency) or are expected to appear for the party in this court:
Matthew B. Prince, Attorney at Law
(3) If the party or amicus is a corporation:
i) Identify all its parent corporations, if any; and
J. L. Halsey Corporation
ii) List any publicly held company that owns 10% or more of the party’s or amicus’ stock:
J. L. Halsey Corporation (owns 10% +)
Attorney’s Signature: s/Matthew B. Prince Date: 02-28-07
Attorney’s Printed Name: Matthew B. Prince
Please indicate if you are Counsel of Record for the above listed parties pursuant to Circuit Rule 3(d). Yes X No _____
Address: 1901 Prospector Avenue, Suite 200, Park City, UT 84060
Phone Number: (435) 615-9205 Fax Number: (435) 615-9211
E-Mail Address: 9prince@jmls.edu
CIRCUIT RULE 26.1 DISCLOSURE STATEMENT
Appellate Court No: 06-3779
Short Caption: e360 Insight, LLC et al. v. The Spamhaus Project
To enable the judges to determine whether recusal is necessary or appropriate, an attorney for a non-governmental party or amicus curiae, or a private attorney representing a government party, must furnish a disclosure statement providing the following information in compliance with Circuit Rule 26.1 and Fed. R. App. P. 26.1.
The Court prefers that the disclosure statement be filed immediately following docketing; but, the disclosure statement must be filed within 21 days of docketing or upon the filing of a motion, response, petition, or answer in this court, whichever occurs first. Attorneys are required to file an amended statement to reflect any material changes in the required information. The text of the statement must also be included in front of the table of contents of the party’s main brief. Counsel is required to complete the entire statement and to use N/A for any information that is not applicable if this form is used.
(1) The full name of every party that the attorney represents in the case (if the party is a corporation, you must provide the corporate disclosure information required by Fed. R. App. P. 26.1 by completing item #3):
Michael Geist, Professor of Law and Canada Research Chair in Internet and E-Commerce Law, University of Ottawa
(2) The names of all law firms whose partners or associates have appeared for the party in the case (including proceedings in the district court or before an administrative agency) or are expected to appear for the party in this court:
Matthew B. Prince, Attorney at Law
(3) If the party or amicus is a corporation:
i) Identify all its parent corporations, if any; and
None.
ii) List any publicly held company that owns 10% or more of the party’s or amicus’ stock:
None.
Attorney’s Signature: s/Matthew B. Prince Date: 02-28-07
Attorney’s Printed Name: Matthew B. Prince
Please indicate if you are Counsel of Record for the above listed parties pursuant to Circuit Rule 3(d). Yes X No _____
Address: 1901 Prospector Avenue, Suite 200, Park City, UT 84060
Phone Number: (435) 615-9205 Fax Number: (435) 615-9211
E-Mail Address: 9prince@jmls.edu
CIRCUIT RULE 26.1 DISCLOSURE STATEMENT
Appellate Court No: 06-3779
Short Caption: e360 Insight, LLC et al. v. The Spamhaus Project
To enable the judges to determine whether recusal is necessary or appropriate, an attorney for a non-governmental party or amicus curiae, or a private attorney representing a government party, must furnish a disclosure statement providing the following information in compliance with Circuit Rule 26.1 and Fed. R. App. P. 26.1.
The Court prefers that the disclosure statement be filed immediately following docketing; but, the disclosure statement must be filed within 21 days of docketing or upon the filing of a motion, response, petition, or answer in this court, whichever occurs first. Attorneys are required to file an amended statement to reflect any material changes in the required information. The text of the statement must also be included in front of the table of contents of the party’s main brief. Counsel is required to complete the entire statement and to use N/A for any information that is not applicable if this form is used.
(1) The full name of every party that the attorney represents in the case (if the party is a corporation, you must provide the corporate disclosure information required by Fed. R. App. P. 26.1 by completing item #3):
Habeas, Inc.
(2) The names of all law firms whose partners or associates have appeared for the party in the case (including proceedings in the district court or before an administrative agency) or are expected to appear for the party in this court:
Matthew B. Prince, Attorney at Law
(3) If the party or amicus is a corporation:
i) Identify all its parent corporations, if any; and
None.
ii) List any publicly held company that owns 10% or more of the party’s or amicus’ stock:
None.
Attorney’s Signature: s/Matthew B. Prince Date: 02-28-07
Attorney’s Printed Name: Matthew B. Prince
Please indicate if you are Counsel of Record for the above listed parties pursuant to Circuit Rule 3(d). Yes X No _____
Address: 1901 Prospector Avenue, Suite 200, Park City, UT 84060
Phone Number: (435) 615-9205 Fax Number: (435) 615-9211
E-Mail Address: 9prince@jmls.edu
CIRCUIT RULE 26.1 DISCLOSURE STATEMENT
Appellate Court No: 06-3779
Short Caption: e360 Insight, LLC et al. v. The Spamhaus Project
To enable the judges to determine whether recusal is necessary or appropriate, an attorney for a non-governmental party or amicus curiae, or a private attorney representing a government party, must furnish a disclosure statement providing the following information in compliance with Circuit Rule 26.1 and Fed. R. App. P. 26.1.
The Court prefers that the disclosure statement be filed immediately following docketing; but, the disclosure statement must be filed within 21 days of docketing or upon the filing of a motion, response, petition, or answer in this court, whichever occurs first. Attorneys are required to file an amended statement to reflect any material changes in the required information. The text of the statement must also be included in front of the table of contents of the party’s main brief. Counsel is required to complete the entire statement and to use N/A for any information that is not applicable if this form is used.
(1) The full name of every party that the attorney represents in the case (if the party is a corporation, you must provide the corporate disclosure information required by Fed. R. App. P. 26.1 by completing item #3):
Internet Law Group, PLLC
(2) The names of all law firms whose partners or associates have appeared for the party in the case (including proceedings in the district court or before an administrative agency) or are expected to appear for the party in this court:
Matthew B. Prince, Attorney at Law
(3) If the party or amicus is a corporation:
i) Identify all its parent corporations, if any; and
None.
ii) List any publicly held company that owns 10% or more of the party’s or amicus’ stock:
None.
Attorney’s Signature: s/Matthew B. Prince Date: 02-28-07
Attorney’s Printed Name: Matthew B. Prince
Please indicate if you are Counsel of Record for the above listed parties pursuant to Circuit Rule 3(d). Yes X No _____
Address: 1901 Prospector Avenue, Suite 200, Park City, UT 84060
Phone Number: (435) 615-9205 Fax Number: (435) 615-9211
E-Mail Address: 9prince@jmls.edu
CIRCUIT RULE 26.1 DISCLOSURE STATEMENT
Appellate Court No: 06-3779
Short Caption: e360 Insight, LLC et al. v. The Spamhaus Project
To enable the judges to determine whether recusal is necessary or appropriate, an attorney for a non-governmental party or amicus curiae, or a private attorney representing a government party, must furnish a disclosure statement providing the following information in compliance with Circuit Rule 26.1 and Fed. R. App. P. 26.1.
The Court prefers that the disclosure statement be filed immediately following docketing; but, the disclosure statement must be filed within 21 days of docketing or upon the filing of a motion, response, petition, or answer in this court, whichever occurs first. Attorneys are required to file an amended statement to reflect any material changes in the required information. The text of the statement must also be included in front of the table of contents of the party’s main brief. Counsel is required to complete the entire statement and to use N/A for any information that is not applicable if this form is used.
(1) The full name of every party that the attorney represents in the case (if the party is a corporation, you must provide the corporate disclosure information required by Fed. R. App. P. 26.1 by completing item #3):
Innovyx, Inc.
(2) The names of all law firms whose partners or associates have appeared for the party in the case (including proceedings in the district court or before an administrative agency) or are expected to appear for the party in this court:
Matthew B. Prince, Attorney at Law
(3) If the party or amicus is a corporation:
i) Identify all its parent corporations, if any; and
Omnicom Group Inc.
ii) List any publicly held company that owns 10% or more of the party’s or amicus’ stock:
Omnicom Group Inc. (owns 10% +)
Attorney’s Signature: s/Matthew B. Prince Date: 02-28-07
Attorney’s Printed Name: Matthew B. Prince
Please indicate if you are Counsel of Record for the above listed parties pursuant to Circuit Rule 3(d). Yes X No _____
Address: 1901 Prospector Avenue, Suite 200, Park City, UT 84060
Phone Number: (435) 615-9205 Fax Number: (435) 615-9211
E-Mail Address: 9prince@jmls.edu
CIRCUIT RULE 26.1 DISCLOSURE STATEMENT
Appellate Court No: 06-3779
Short Caption: e360 Insight, LLC et al. v. The Spamhaus Project
To enable the judges to determine whether recusal is necessary or appropriate, an attorney for a non-governmental party or amicus curiae, or a private attorney representing a government party, must furnish a disclosure statement providing the following information in compliance with Circuit Rule 26.1 and Fed. R. App. P. 26.1.
The Court prefers that the disclosure statement be filed immediately following docketing; but, the disclosure statement must be filed within 21 days of docketing or upon the filing of a motion, response, petition, or answer in this court, whichever occurs first. Attorneys are required to file an amended statement to reflect any material changes in the required information. The text of the statement must also be included in front of the table of contents of the party’s main brief. Counsel is required to complete the entire statement and to use N/A for any information that is not applicable if this form is used.
(1) The full name of every party that the attorney represents in the case (if the party is a corporation, you must provide the corporate disclosure information required by Fed. R. App. P. 26.1 by completing item #3):
Internet Tools, Inc.
(2) The names of all law firms whose partners or associates have appeared for the party in the case (including proceedings in the district court or before an administrative agency) or are expected to appear for the party in this court:
Matthew B. Prince, Attorney at Law
(3) If the party or amicus is a corporation:
i) Identify all its parent corporations, if any; and
None.
ii) List any publicly held company that owns 10% or more of the party’s or amicus’ stock:
None.
Attorney’s Signature: s/Matthew B. Prince Date: 02-28-07
Attorney’s Printed Name: Matthew B. Prince
Please indicate if you are Counsel of Record for the above listed parties pursuant to Circuit Rule 3(d). Yes X No _____
Address: 1901 Prospector Avenue, Suite 200, Park City, UT 84060
Phone Number: (435) 615-9205 Fax Number: (435) 615-9211
E-Mail Address: 9prince@jmls.edu
CIRCUIT RULE 26.1 DISCLOSURE STATEMENT
Appellate Court No: 06-3779
Short Caption: e360 Insight, LLC et al. v. The Spamhaus Project
To enable the judges to determine whether recusal is necessary or appropriate, an attorney for a non-governmental party or amicus curiae, or a private attorney representing a government party, must furnish a disclosure statement providing the following information in compliance with Circuit Rule 26.1 and Fed. R. App. P. 26.1.
The Court prefers that the disclosure statement be filed immediately following docketing; but, the disclosure statement must be filed within 21 days of docketing or upon the filing of a motion, response, petition, or answer in this court, whichever occurs first. Attorneys are required to file an amended statement to reflect any material changes in the required information. The text of the statement must also be included in front of the table of contents of the party’s main brief. Counsel is required to complete the entire statement and to use N/A for any information that is not applicable if this form is used.
(1) The full name of every party that the attorney represents in the case (if the party is a corporation, you must provide the corporate disclosure information required by Fed. R. App. P. 26.1 by completing item #3):
The Institute for Spam and Internet Public Policy (ISIPP)
(2) The names of all law firms whose partners or associates have appeared for the party in the case (including proceedings in the district court or before an administrative agency) or are expected to appear for the party in this court:
Matthew B. Prince, Attorney at Law
(3) If the party or amicus is a corporation:
i) Identify all its parent corporations, if any; and
None.
ii) List any publicly held company that owns 10% or more of the party’s or amicus’ stock:
None.
Attorney’s Signature: s/Matthew B. Prince Date: 02-28-07
Attorney’s Printed Name: Matthew B. Prince
Please indicate if you are Counsel of Record for the above listed parties pursuant to Circuit Rule 3(d). Yes X No _____
Address: 1901 Prospector Avenue, Suite 200, Park City, UT 84060
Phone Number: (435) 615-9205 Fax Number: (435) 615-9211
E-Mail Address: 9prince@jmls.edu
CIRCUIT RULE 26.1 DISCLOSURE STATEMENT
Appellate Court No: 06-3779
Short Caption: e360 Insight, LLC et al. v. The Spamhaus Project
To enable the judges to determine whether recusal is necessary or appropriate, an attorney for a non-governmental party or amicus curiae, or a private attorney representing a government party, must furnish a disclosure statement providing the following information in compliance with Circuit Rule 26.1 and Fed. R. App. P. 26.1.
The Court prefers that the disclosure statement be filed immediately following docketing; but, the disclosure statement must be filed within 21 days of docketing or upon the filing of a motion, response, petition, or answer in this court, whichever occurs first. Attorneys are required to file an amended statement to reflect any material changes in the required information. The text of the statement must also be included in front of the table of contents of the party’s main brief. Counsel is required to complete the entire statement and to use N/A for any information that is not applicable if this form is used.
(1) The full name of every party that the attorney represents in the case (if the party is a corporation, you must provide the corporate disclosure information required by Fed. R. App. P. 26.1 by completing item #3):
Chris Lewis, Senior Technical Advisor, Messaging Anti-Abuse Working Group (MAAWG)
(2) The names of all law firms whose partners or associates have appeared for the party in the case (including proceedings in the district court or before an administrative agency) or are expected to appear for the party in this court:
Matthew B. Prince, Attorney at Law
(3) If the party or amicus is a corporation:
i) Identify all its parent corporations, if any; and
None.
ii) List any publicly held company that owns 10% or more of the party’s or amicus’ stock:
None.
Attorney’s Signature: s/Matthew B. Prince Date: 02-28-07
Attorney’s Printed Name: Matthew B. Prince
Please indicate if you are Counsel of Record for the above listed parties pursuant to Circuit Rule 3(d). Yes X No _____
Address: 1901 Prospector Avenue, Suite 200, Park City, UT 84060
Phone Number: (435) 615-9205 Fax Number: (435) 615-9211
E-Mail Address: 9prince@jmls.edu
CIRCUIT RULE 26.1 DISCLOSURE STATEMENT
Appellate Court No: 06-3779
Short Caption: e360 Insight, LLC et al. v. The Spamhaus Project
To enable the judges to determine whether recusal is necessary or appropriate, an attorney for a non-governmental party or amicus curiae, or a private attorney representing a government party, must furnish a disclosure statement providing the following information in compliance with Circuit Rule 26.1 and Fed. R. App. P. 26.1.
The Court prefers that the disclosure statement be filed immediately following docketing; but, the disclosure statement must be filed within 21 days of docketing or upon the filing of a motion, response, petition, or answer in this court, whichever occurs first. Attorneys are required to file an amended statement to reflect any material changes in the required information. The text of the statement must also be included in front of the table of contents of the party’s main brief. Counsel is required to complete the entire statement and to use N/A for any information that is not applicable if this form is used.
(1) The full name of every party that the attorney represents in the case (if the party is a corporation, you must provide the corporate disclosure information required by Fed. R. App. P. 26.1 by completing item #3):
John Levine, Chair of the Anti-Spam Research Group (ASRG) of the Internet Research Taskforce, and operator of the Network Abuse Clearinghouse
(2) The names of all law firms whose partners or associates have appeared for the party in the case (including proceedings in the district court or before an administrative agency) or are expected to appear for the party in this court:
Matthew B. Prince, Attorney at Law
(3) If the party or amicus is a corporation:
i) Identify all its parent corporations, if any; and
None.
ii) List any publicly held company that owns 10% or more of the party’s or amicus’ stock:
None.
Attorney’s Signature: s/Matthew B. Prince Date: 02-28-07
Attorney’s Printed Name: Matthew B. Prince
Please indicate if you are Counsel of Record for the above listed parties pursuant to Circuit Rule 3(d). Yes X No _____
Address: 1901 Prospector Avenue, Suite 200, Park City, UT 84060
Phone Number: (435) 615-9205 Fax Number: (435) 615-9211
E-Mail Address: 9prince@jmls.edu
CIRCUIT RULE 26.1 DISCLOSURE STATEMENT
Appellate Court No: 06-3779
Short Caption: e360 Insight, LLC et al. v. The Spamhaus Project
To enable the judges to determine whether recusal is necessary or appropriate, an attorney for a non-governmental party or amicus curiae, or a private attorney representing a government party, must furnish a disclosure statement providing the following information in compliance with Circuit Rule 26.1 and Fed. R. App. P. 26.1.
The Court prefers that the disclosure statement be filed immediately following docketing; but, the disclosure statement must be filed within 21 days of docketing or upon the filing of a motion, response, petition, or answer in this court, whichever occurs first. Attorneys are required to file an amended statement to reflect any material changes in the required information. The text of the statement must also be included in front of the table of contents of the party’s main brief. Counsel is required to complete the entire statement and to use N/A for any information that is not applicable if this form is used.
(1) The full name of every party that the attorney represents in the case (if the party is a corporation, you must provide the corporate disclosure information required by Fed. R. App. P. 26.1 by completing item #3):
Mailshell Inc. (Legal Name: Gozoom.com Inc. d/b/a Mailshell)
(2) The names of all law firms whose partners or associates have appeared for the party in the case (including proceedings in the district court or before an administrative agency) or are expected to appear for the party in this court:
Matthew B. Prince, Attorney at Law
(3) If the party or amicus is a corporation:
i) Identify all its parent corporations, if any; and
None.
ii) List any publicly held company that owns 10% or more of the party’s or amicus’ stock:
None.
Attorney’s Signature: s/Matthew B. Prince Date: 02-28-07
Attorney’s Printed Name: Matthew B. Prince
Please indicate if you are Counsel of Record for the above listed parties pursuant to Circuit Rule 3(d). Yes X No _____
Address: 1901 Prospector Avenue, Suite 200, Park City, UT 84060
Phone Number: (435) 615-9205 Fax Number: (435) 615-9211
E-Mail Address: 9prince@jmls.edu
CIRCUIT RULE 26.1 DISCLOSURE STATEMENT
Appellate Court No: 06-3779
Short Caption: e360 Insight, LLC et al. v. The Spamhaus Project
To enable the judges to determine whether recusal is necessary or appropriate, an attorney for a non-governmental party or amicus curiae, or a private attorney representing a government party, must furnish a disclosure statement providing the following information in compliance with Circuit Rule 26.1 and Fed. R. App. P. 26.1.
The Court prefers that the disclosure statement be filed immediately following docketing; but, the disclosure statement must be filed within 21 days of docketing or upon the filing of a motion, response, petition, or answer in this court, whichever occurs first. Attorneys are required to file an amended statement to reflect any material changes in the required information. The text of the statement must also be included in front of the table of contents of the party’s main brief. Counsel is required to complete the entire statement and to use N/A for any information that is not applicable if this form is used.
(1) The full name of every party that the attorney represents in the case (if the party is a corporation, you must provide the corporate disclosure information required by Fed. R. App. P. 26.1 by completing item #3):
MV Communications, Inc.
(2) The names of all law firms whose partners or associates have appeared for the party in the case (including proceedings in the district court or before an administrative agency) or are expected to appear for the party in this court:
Matthew B. Prince, Attorney at Law
(3) If the party or amicus is a corporation:
i) Identify all its parent corporations, if any; and
None.
ii) List any publicly held company that owns 10% or more of the party’s or amicus’ stock:
None.
Attorney’s Signature: s/Matthew B. Prince Date: 02-28-07
Attorney’s Printed Name: Matthew B. Prince
Please indicate if you are Counsel of Record for the above listed parties pursuant to Circuit Rule 3(d). Yes X No _____
Address: 1901 Prospector Avenue, Suite 200, Park City, UT 84060
Phone Number: (435) 615-9205 Fax Number: (435) 615-9211
E-Mail Address: 9prince@jmls.edu
CIRCUIT RULE 26.1 DISCLOSURE STATEMENT
Appellate Court No: 06-3779
Short Caption: e360 Insight, LLC et al. v. The Spamhaus Project
To enable the judges to determine whether recusal is necessary or appropriate, an attorney for a non-governmental party or amicus curiae, or a private attorney representing a government party, must furnish a disclosure statement providing the following information in compliance with Circuit Rule 26.1 and Fed. R. App. P. 26.1.
The Court prefers that the disclosure statement be filed immediately following docketing; but, the disclosure statement must be filed within 21 days of docketing or upon the filing of a motion, response, petition, or answer in this court, whichever occurs first. Attorneys are required to file an amended statement to reflect any material changes in the required information. The text of the statement must also be included in front of the table of contents of the party’s main brief. Counsel is required to complete the entire statement and to use N/A for any information that is not applicable if this form is used.
(1) The full name of every party that the attorney represents in the case (if the party is a corporation, you must provide the corporate disclosure information required by Fed. R. App. P. 26.1 by completing item #3):
Return Path, Inc.
(2) The names of all law firms whose partners or associates have appeared for the party in the case (including proceedings in the district court or before an administrative agency) or are expected to appear for the party in this court:
Matthew B. Prince, Attorney at Law
(3) If the party or amicus is a corporation:
i) Identify all its parent corporations, if any; and
None.
ii) List any publicly held company that owns 10% or more of the party’s or amicus’ stock:
None.
Attorney’s Signature: s/Matthew B. Prince Date: 02-28-07
Attorney’s Printed Name: Matthew B. Prince
Please indicate if you are Counsel of Record for the above listed parties pursuant to Circuit Rule 3(d). Yes X No _____
Address: 1901 Prospector Avenue, Suite 200, Park City, UT 84060
Phone Number: (435) 615-9205 Fax Number: (435) 615-9211
E-Mail Address: 9prince@jmls.edu
CIRCUIT RULE 26.1 DISCLOSURE STATEMENT
Appellate Court No: 06-3779
Short Caption: e360 Insight, LLC et al. v. The Spamhaus Project
To enable the judges to determine whether recusal is necessary or appropriate, an attorney for a non-governmental party or amicus curiae, or a private attorney representing a government party, must furnish a disclosure statement providing the following information in compliance with Circuit Rule 26.1 and Fed. R. App. P. 26.1.
The Court prefers that the disclosure statement be filed immediately following docketing; but, the disclosure statement must be filed within 21 days of docketing or upon the filing of a motion, response, petition, or answer in this court, whichever occurs first. Attorneys are required to file an amended statement to reflect any material changes in the required information. The text of the statement must also be included in front of the table of contents of the party’s main brief. Counsel is required to complete the entire statement and to use N/A for any information that is not applicable if this form is used.
(1) The full name of every party that the attorney represents in the case (if the party is a corporation, you must provide the corporate disclosure information required by Fed. R. App. P. 26.1 by completing item #3):
Secure Computing Corporation
(2) The names of all law firms whose partners or associates have appeared for the party in the case (including proceedings in the district court or before an administrative agency) or are expected to appear for the party in this court:
Matthew B. Prince, Attorney at Law
(3) If the party or amicus is a corporation:
i) Identify all its parent corporations, if any; and
None.
ii) List any publicly held company that owns 10% or more of the party’s or amicus’ stock:
None.
Attorney’s Signature: s/Matthew B. Prince Date: 02-28-07
Attorney’s Printed Name: Matthew B. Prince
Please indicate if you are Counsel of Record for the above listed parties pursuant to Circuit Rule 3(d). Yes X No _____
Address: 1901 Prospector Avenue, Suite 200, Park City, UT 84060
Phone Number: (435) 615-9205 Fax Number: (435) 615-9211
E-Mail Address: 9prince@jmls.edu
CIRCUIT RULE 26.1 DISCLOSURE STATEMENT
Appellate Court No: 06-3779
Short Caption: e360 Insight, LLC et al. v. The Spamhaus Project
To enable the judges to determine whether recusal is necessary or appropriate, an attorney for a non-governmental party or amicus curiae, or a private attorney representing a government party, must furnish a disclosure statement providing the following information in compliance with Circuit Rule 26.1 and Fed. R. App. P. 26.1.
The Court prefers that the disclosure statement be filed immediately following docketing; but, the disclosure statement must be filed within 21 days of docketing or upon the filing of a motion, response, petition, or answer in this court, whichever occurs first. Attorneys are required to file an amended statement to reflect any material changes in the required information. The text of the statement must also be included in front of the table of contents of the party’s main brief. Counsel is required to complete the entire statement and to use N/A for any information that is not applicable if this form is used.
(1) The full name of every party that the attorney represents in the case (if the party is a corporation, you must provide the corporate disclosure information required by Fed. R. App. P. 26.1 by completing item #3):
SnertSoft
(2) The names of all law firms whose partners or associates have appeared for the party in the case (including proceedings in the district court or before an administrative agency) or are expected to appear for the party in this court:
Matthew B. Prince, Attorney at Law
(3) If the party or amicus is a corporation:
i) Identify all its parent corporations, if any; and
None.
ii) List any publicly held company that owns 10% or more of the party’s or amicus’ stock:
None.
Attorney’s Signature: s/Matthew B. Prince Date: 02-28-07
Attorney’s Printed Name: Matthew B. Prince
Please indicate if you are Counsel of Record for the above listed parties pursuant to Circuit Rule 3(d). Yes X No _____
Address: 1901 Prospector Avenue, Suite 200, Park City, UT 84060
Phone Number: (435) 615-9205 Fax Number: (435) 615-9211
E-Mail Address: 9prince@jmls.edu
CIRCUIT RULE 26.1 DISCLOSURE STATEMENT
Appellate Court No: 06-3779
Short Caption: e360 Insight, LLC et al. v. The Spamhaus Project
To enable the judges to determine whether recusal is necessary or appropriate, an attorney for a non-governmental party or amicus curiae, or a private attorney representing a government party, must furnish a disclosure statement providing the following information in compliance with Circuit Rule 26.1 and Fed. R. App. P. 26.1.
The Court prefers that the disclosure statement be filed immediately following docketing; but, the disclosure statement must be filed within 21 days of docketing or upon the filing of a motion, response, petition, or answer in this court, whichever occurs first. Attorneys are required to file an amended statement to reflect any material changes in the required information. The text of the statement must also be included in front of the table of contents of the party’s main brief. Counsel is required to complete the entire statement and to use N/A for any information that is not applicable if this form is used.
(1) The full name of every party that the attorney represents in the case (if the party is a corporation, you must provide the corporate disclosure information required by Fed. R. App. P. 26.1 by completing item #3):
Spin, s.r.l.
(2) The names of all law firms whose partners or associates have appeared for the party in the case (including proceedings in the district court or before an administrative agency) or are expected to appear for the party in this court:
Matthew B. Prince, Attorney at Law
(3) If the party or amicus is a corporation:
i) Identify all its parent corporations, if any; and
None.
ii) List any publicly held company that owns 10% or more of the party’s or amicus’ stock:
None.
Attorney’s Signature: s/Matthew B. Prince Date: 02-28-07
Attorney’s Printed Name: Matthew B. Prince
Please indicate if you are Counsel of Record for the above listed parties pursuant to Circuit Rule 3(d). Yes X No _____
Address: 1901 Prospector Avenue, Suite 200, Park City, UT 84060
Phone Number: (435) 615-9205 Fax Number: (435) 615-9211
E-Mail Address: 9prince@jmls.edu
CIRCUIT RULE 26.1 DISCLOSURE STATEMENT
Appellate Court No: 06-3779
Short Caption: e360 Insight, LLC et al. v. The Spamhaus Project
To enable the judges to determine whether recusal is necessary or appropriate, an attorney for a non-governmental party or amicus curiae, or a private attorney representing a government party, must furnish a disclosure statement providing the following information in compliance with Circuit Rule 26.1 and Fed. R. App. P. 26.1.
The Court prefers that the disclosure statement be filed immediately following docketing; but, the disclosure statement must be filed within 21 days of docketing or upon the filing of a motion, response, petition, or answer in this court, whichever occurs first. Attorneys are required to file an amended statement to reflect any material changes in the required information. The text of the statement must also be included in front of the table of contents of the party’s main brief. Counsel is required to complete the entire statement and to use N/A for any information that is not applicable if this form is used.
(1) The full name of every party that the attorney represents in the case (if the party is a corporation, you must provide the corporate disclosure information required by Fed. R. App. P. 26.1 by completing item #3):
SURBL
(2) The names of all law firms whose partners or associates have appeared for the party in the case (including proceedings in the district court or before an administrative agency) or are expected to appear for the party in this court:
Matthew B. Prince, Attorney at Law
(3) If the party or amicus is a corporation:
i) Identify all its parent corporations, if any; and
None.
ii) List any publicly held company that owns 10% or more of the party’s or amicus’ stock:
None.
Attorney’s Signature: s/Matthew B. Prince Date: 02-28-07
Attorney’s Printed Name: Matthew B. Prince
Please indicate if you are Counsel of Record for the above listed parties pursuant to Circuit Rule 3(d). Yes X No _____
Address: 1901 Prospector Avenue, Suite 200, Park City, UT 84060
Phone Number: (435) 615-9205 Fax Number: (435) 615-9211
E-Mail Address: 9prince@jmls.edu
CIRCUIT RULE 26.1 DISCLOSURE STATEMENT
Appellate Court No: 06-3779
Short Caption: e360 Insight, LLC et al. v. The Spamhaus Project
To enable the judges to determine whether recusal is necessary or appropriate, an attorney for a non-governmental party or amicus curiae, or a private attorney representing a government party, must furnish a disclosure statement providing the following information in compliance with Circuit Rule 26.1 and Fed. R. App. P. 26.1.
The Court prefers that the disclosure statement be filed immediately following docketing; but, the disclosure statement must be filed within 21 days of docketing or upon the filing of a motion, response, petition, or answer in this court, whichever occurs first. Attorneys are required to file an amended statement to reflect any material changes in the required information. The text of the statement must also be included in front of the table of contents of the party’s main brief. Counsel is required to complete the entire statement and to use N/A for any information that is not applicable if this form is used.
(1) The full name of every party that the attorney represents in the case (if the party is a corporation, you must provide the corporate disclosure information required by Fed. R. App. P. 26.1 by completing item #3):
TalkBiz, Inc.
(2) The names of all law firms whose partners or associates have appeared for the party in the case (including proceedings in the district court or before an administrative agency) or are expected to appear for the party in this court:
Matthew B. Prince, Attorney at Law
(3) If the party or amicus is a corporation:
i) Identify all its parent corporations, if any; and
None.
ii) List any publicly held company that owns 10% or more of the party’s or amicus’ stock:
None.
Attorney’s Signature: s/Matthew B. Prince Date: 02-28-07
Attorney’s Printed Name: Matthew B. Prince
Please indicate if you are Counsel of Record for the above listed parties pursuant to Circuit Rule 3(d). Yes X No _____
Address: 1901 Prospector Avenue, Suite 200, Park City, UT 84060
Phone Number: (435) 615-9205 Fax Number: (435) 615-9211
E-Mail Address: 9prince@jmls.edu
CIRCUIT RULE 26.1 DISCLOSURE STATEMENT
Appellate Court No: 06-3779
Short Caption: e360 Insight, LLC et al. v. The Spamhaus Project
To enable the judges to determine whether recusal is necessary or appropriate, an attorney for a non-governmental party or amicus curiae, or a private attorney representing a government party, must furnish a disclosure statement providing the following information in compliance with Circuit Rule 26.1 and Fed. R. App. P. 26.1.
The Court prefers that the disclosure statement be filed immediately following docketing; but, the disclosure statement must be filed within 21 days of docketing or upon the filing of a motion, response, petition, or answer in this court, whichever occurs first. Attorneys are required to file an amended statement to reflect any material changes in the required information. The text of the statement must also be included in front of the table of contents of the party’s main brief. Counsel is required to complete the entire statement and to use N/A for any information that is not applicable if this form is used.
(1) The full name of every party that the attorney represents in the case (if the party is a corporation, you must provide the corporate disclosure information required by Fed. R. App. P. 26.1 by completing item #3):
Unspam Technologies, Inc.
(2) The names of all law firms whose partners or associates have appeared for the party in the case (including proceedings in the district court or before an administrative agency) or are expected to appear for the party in this court:
Matthew B. Prince, Attorney at Law
(3) If the party or amicus is a corporation:
i) Identify all its parent corporations, if any; and
None.
ii) List any publicly held company that owns 10% or more of the party’s or amicus’ stock:
None.
Attorney’s Signature: s/Matthew B. Prince Date: 02-28-07
Attorney’s Printed Name: Matthew B. Prince
Please indicate if you are Counsel of Record for the above listed parties pursuant to Circuit Rule 3(d). Yes X No _____
Address: 1901 Prospector Avenue, Suite 200, Park City, UT 84060
Phone Number: (435) 615-9205 Fax Number: (435) 615-9211
E-Mail Address: 9prince@jmls.edu
CIRCUIT RULE 26.1 DISCLOSURE STATEMENT
Appellate Court No: 06-3779
Short Caption: e360 Insight, LLC et al. v. The Spamhaus Project
To enable the judges to determine whether recusal is necessary or appropriate, an attorney for a non-governmental party or amicus curiae, or a private attorney representing a government party, must furnish a disclosure statement providing the following information in compliance with Circuit Rule 26.1 and Fed. R. App. P. 26.1.
The Court prefers that the disclosure statement be filed immediately following docketing; but, the disclosure statement must be filed within 21 days of docketing or upon the filing of a motion, response, petition, or answer in this court, whichever occurs first. Attorneys are required to file an amended statement to reflect any material changes in the required information. The text of the statement must also be included in front of the table of contents of the party’s main brief. Counsel is required to complete the entire statement and to use N/A for any information that is not applicable if this form is used.
(1) The full name of every party that the attorney represents in the case (if the party is a corporation, you must provide the corporate disclosure information required by Fed. R. App. P. 26.1 by completing item #3):
Paul Vixie
(2) The names of all law firms whose partners or associates have appeared for the party in the case (including proceedings in the district court or before an administrative agency) or are expected to appear for the party in this court:
Matthew B. Prince, Attorney at Law
(3) If the party or amicus is a corporation:
i) Identify all its parent corporations, if any; and
None.
ii) List any publicly held company that owns 10% or more of the party’s or amicus’ stock:
None.
Attorney’s Signature: s/Matthew B. Prince Date: 02-28-07
Attorney’s Printed Name: Matthew B. Prince
Please indicate if you are Counsel of Record for the above listed parties pursuant to Circuit Rule 3(d). Yes X No _____
Address: 1901 Prospector Avenue, Suite 200, Park City, UT 84060
Phone Number: (435) 615-9205 Fax Number: (435) 615-9211
E-Mail Address: 9prince@jmls.edu
CIRCUIT RULE 26.1 DISCLOSURE STATEMENT
Appellate Court No: 06-3779
Short Caption: e360 Insight, LLC et al. v. The Spamhaus Project
To enable the judges to determine whether recusal is necessary or appropriate, an attorney for a non-governmental party or amicus curiae, or a private attorney representing a government party, must furnish a disclosure statement providing the following information in compliance with Circuit Rule 26.1 and Fed. R. App. P. 26.1.
The Court prefers that the disclosure statement be filed immediately following docketing; but, the disclosure statement must be filed within 21 days of docketing or upon the filing of a motion, response, petition, or answer in this court, whichever occurs first. Attorneys are required to file an amended statement to reflect any material changes in the required information. The text of the statement must also be included in front of the table of contents of the party’s main brief. Counsel is required to complete the entire statement and to use N/A for any information that is not applicable if this form is used.
(1) The full name of every party that the attorney represents in the case (if the party is a corporation, you must provide the corporate disclosure information required by Fed. R. App. P. 26.1 by completing item #3):
Webmail.us, Inc.
(2) The names of all law firms whose partners or associates have appeared for the party in the case (including proceedings in the district court or before an administrative agency) or are expected to appear for the party in this court:
Matthew B. Prince, Attorney at Law
(3) If the party or amicus is a corporation:
i) Identify all its parent corporations, if any; and
None.
ii) List any publicly held company that owns 10% or more of the party’s or amicus’ stock:
None.
Attorney’s Signature: s/Matthew B. Prince Date: 02-28-07
Attorney’s Printed Name: Matthew B. Prince
Please indicate if you are Counsel of Record for the above listed parties pursuant to Circuit Rule 3(d). Yes X No _____
Address: 1901 Prospector Avenue, Suite 200, Park City, UT 84060
Phone Number: (435) 615-9205 Fax Number: (435) 615-9211
E-Mail Address: 9prince@jmls.edu
CIRCUIT RULE 26.1 DISCLOSURE STATEMENT
Appellate Court No: 06-3779
Short Caption: e360 Insight, LLC et al. v. The Spamhaus Project
To enable the judges to determine whether recusal is necessary or appropriate, an attorney for a non-governmental party or amicus curiae, or a private attorney representing a government party, must furnish a disclosure statement providing the following information in compliance with Circuit Rule 26.1 and Fed. R. App. P. 26.1.
The Court prefers that the disclosure statement be filed immediately following docketing; but, the disclosure statement must be filed within 21 days of docketing or upon the filing of a motion, response, petition, or answer in this court, whichever occurs first. Attorneys are required to file an amended statement to reflect any material changes in the required information. The text of the statement must also be included in front of the table of contents of the party’s main brief. Counsel is required to complete the entire statement and to use N/A for any information that is not applicable if this form is used.
(1) The full name of every party that the attorney represents in the case (if the party is a corporation, you must provide the corporate disclosure information required by Fed. R. App. P. 26.1 by completing item #3):
Whizardries, Inc.
(2) The names of all law firms whose partners or associates have appeared for the party in the case (including proceedings in the district court or before an administrative agency) or are expected to appear for the party in this court:
Matthew B. Prince, Attorney at Law
(3) If the party or amicus is a corporation:
i) Identify all its parent corporations, if any; and
None.
ii) List any publicly held company that owns 10% or more of the party’s or amicus’ stock:
None.
Attorney’s Signature: s/Matthew B. Prince Date: 02-28-07
Attorney’s Printed Name: Matthew B. Prince
Please indicate if you are Counsel of Record for the above listed parties pursuant to Circuit Rule 3(d). Yes X No _____
Address: 1901 Prospector Avenue, Suite 200, Park City, UT 84060
Phone Number: (435) 615-9205 Fax Number: (435) 615-9211
E-Mail Address: 9prince@jmls.edu
CIRCUIT RULE 26.1 DISCLOSURE STATEMENT
Appellate Court No: 06-3779
Short Caption: e360 Insight, LLC et al. v. The Spamhaus Project
To enable the judges to determine whether recusal is necessary or appropriate, an attorney for a non-governmental party or amicus curiae, or a private attorney representing a government party, must furnish a disclosure statement providing the following information in compliance with Circuit Rule 26.1 and Fed. R. App. P. 26.1.
The Court prefers that the disclosure statement be filed immediately following docketing; but, the disclosure statement must be filed within 21 days of docketing or upon the filing of a motion, response, petition, or answer in this court, whichever occurs first. Attorneys are required to file an amended statement to reflect any material changes in the required information. The text of the statement must also be included in front of the table of contents of the party’s main brief. Counsel is required to complete the entire statement and to use N/A for any information that is not applicable if this form is used.
(1) The full name of every party that the attorney represents in the case (if the party is a corporation, you must provide the corporate disclosure information required by Fed. R. App. P. 26.1 by completing item #3):
Derek Wyatt, Member of Parliament, Chairman of the All Party Internet Group
(2) The names of all law firms whose partners or associates have appeared for the party in the case (including proceedings in the district court or before an administrative agency) or are expected to appear for the party in this court:
Matthew B. Prince, Attorney at Law
(3) If the party or amicus is a corporation:
i) Identify all its parent corporations, if any; and
None.
ii) List any publicly held company that owns 10% or more of the party’s or amicus’ stock:
None.
Attorney’s Signature: s/Matthew B. Prince Date: 02-28-07
Attorney’s Printed Name: Matthew B. Prince
Please indicate if you are Counsel of Record for the above listed parties pursuant to Circuit Rule 3(d). Yes X No _____
Address: 1901 Prospector Avenue, Suite 200, Park City, UT 84060
Phone Number: (435) 615-9205 Fax Number: (435) 615-9211
E-Mail Address: 9prince@jmls.edu
TABLE OF CONTENTS
CIRCUIT RULE 26.1 DISCLOSURE STATEMENTS
TABLE OF AUTHORITIES...................................................................... ii
STATEMENT OF THE IDENTITY AND INTERESTS OF THE AMICI AND THE SOURCE OF AUTHORITY TO FILE ...1
ARGUMENT...................................................................................10
I. The Entry of Default Judgment Should Be Reversed Because It Does Not Comport With Principles of Due Process and Threatens International Volunteer Organizations that Ensure the Continued Viability of Internet Email..........................................................................12
II. Internet Service Providers and Anti-Spam Organizations Like Spamhaus Are Shielded from Liability by Statute and Legal Precedent......................15
A. Individual ISPs, not Spamhaus, decide whether messages are allowed onto their networks............................................................15
B. Congress specifically granted ISPs immunity from liability for blocking email messages and otherwise exercising their editorial functions under the Controlling the Assault of Non-Solicited Pornography and Marketings (“CAN-SPAM”) Act of 2003.................16
C. The limitations of liability has been extended to anti-spam services like Spamhaus...............................................................................20
III. The Permanent Injunction Issued by the District Court Creates a Legal Standard and Process that is Unworkable and Would Thwart Any Attempts by ISPs to Block Spam..............................................................21
CONCLUSION................................................................................22
CERTIFICATE OF COMPLIANCE WITH TYPE-VOLUME LIMITATION, TYPEFACE REQUIREMENTS AND TYPE-STYLE REQUIREMENTS...........24
CERTIFICATE OF SERVICE.............................................................................. 1
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TABLE OF AUTHORITIES
Cases
America Online, Inc. v. GreatDeals.Net, 49 F.Supp.2d 851.................................17, 19
Blumenthal v. Drudge, 992 F.Supp. 44 (D.D.C. 1998)...........................................21
Gentry v. eBay, Inc., 99 Cal.App.4th 816, 121 Cal. Rptr. 2d 703 & n.7 (2002).21
Int’l Shoe Co. v. Washington, 326 U.S. 310 (1945).......................................................13
MaryCLE, LLC v. First Choice Internet, Inc., 166 Md. App. 481, 890 A.2d 818 (2006)...........19
OptInRealBig.com, LLC v. Ironport Sys., Inc., 323 F. Supp. 2d 1037 (N.D. Cal. 2004)......20, 21
Schneider v. Amazon.com, 108 Wash. App. 454, 31 P.3d 37 2001))......................21
Verizon Online Servs., Inc. v. Ralsky, 203 F. Supp. 2d 601 (E.D. Va. 2002).......19
White Buffalo Ventures v. University of Texas at Austin, 420 F.3d 366 (5th Cir. 2005)....18, 19
Statutes
15 U.S.C. § 7701-7713................................................................16, 17, 19
15 U.S.C. § 7707(c) (2003)...................................................................18
47 U.S.C. § 231(e)(4)........................................................................18
Communications Decency Act (“CDA”) of 1996, 47 U.S.C. § 230...................16, 17
Fed. R. App. P. 29............................................................................1
U.S.C. § 7702(11)............................................................................18
Other Authorities
2006: The Year Spam Raised Its Game and Threats Got Personal, MessageLabs, Dec. 14, 2006, http://www.messagelabs.com/portal/server.pt/gateway/PTARGS_0_5882_476_31... publish/about_us_dotcom_en/news___events/press_releases/DA_174397.html.......................11
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Cara Garretson, What’s With All This Spam?, Network World, Nov. 8, 2006, http://www.networkworld.com/news/2006/110806-image-spam.html.....11
Postini Message Security and Management Update for October Reveals that Spam is Back With a Vengeance, Postini, Nov. 6, 2006, http://www.postini.com/news_events/pr/pr110606.php.........................
Report on Spam, Viruses and Spyware Highlight Trends of 2006 and Predictions for 2007, IronPort, Dec. 19, 2006, http://www.ironport.com/company/ironport_pr_2006-12-19.html................
SpamCop.net, http://www.spamcop.net.....................................................
Spamhaus.org, http://www.spamhaus.org....................................................
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STATEMENT OF THE IDENTITY AND INTERESTS OF THE AMICI AND THE SOURCE OF AUTHORITY TO FILE
In compliance with Fed. R. App. P. 29, the amici submit this brief in order to maintain the continued healthy function of electronic email (“email”). Email is one of the primary services offered and supported by the amici. As such, the amici — ISPs, email consultants, and email senders and receivers (collectively “entities concerned with email”) — have a collective interest in this case because its outcome is important for the healthy function of the global email network. Unwanted, unsolicited email, commonly known as “spam,” comprises an increasing percentage of the email messages received by the amici and their customers. The increasing volume of spam significantly increases the costs borne by the amici, tarnishes the Internet experience of their customers and constituents, and threatens to overwhelm the global email network. The preservation of the legally protected right to keep certain messages off the email systems used or maintained by the amici through spam-prevention mechanisms, such as those offered by Spamhaus, is therefore of fundamental importance to the amici.
The individual amici are as follows:
1. Apexis AG: Apexis AG is a Swiss spam filtering service catering to private users, and uses Spamhaus advisories to relieve its users from unsolicited bulk email and unsolicited commercial email because it believes Spamhaus is an industry-recognized, reliable service.
2. Beyond Security, Inc.: Beyond Security is a leading provider of vulnerability assessment technologies and has an active involvement in the security community through its independent security portal SecuriTeam.com. Beyond Security recognizes and appreciates the efforts of Spamhaus in trying fight the spam problem and is deeply concerned about efforts from shady organizations trying to silence independent security research by means of forceful litigation.
3. Brandenburg Internet Working: Brandenburg Internet Working’s principal, David H. Crocker, has spent 35 years designing network-based applications businesses and system architectures, with a focus on electronic mail for which he received the 2004 IEEE Internet Award. In recent years, Brandenburg has emphasized efforts to protect the Internet's email infrastructure against spam and other forms of abuse, with an increasing appreciation of the essential role provided by the Spamhaus set of services in identifying significant spam email sources.
4. Bright Wings, Inc.: Bright Wings uses the Internet to market many products and services, and to help individuals and companies lead better lives. The ability to safely send email to people who are interested in what Bright Wings can offer them, and who have given Bright Wings permission to send email to them, is an integral part of doing business in today's marketplace. Bright Wings relies upon resources such as Spamhaus to keep the Internet safe, and to help Bright Wings acquire, maintain, and better serve its visitors and customers. 2
5. ChangeIP.com: ChangeIP.com's global customer base has been protected by the Spamhaus services for the past 3 years. ChangeIP.com blocks over 40 connections per second from Spamhaus-listed IP addresses without any complaints from its clients. ChangeIP.com’s service relies on Spamhaus to protect its network.
6. Coalition Against Unsolicited Commercial Email (CAUCE) - US: CAUCE is the leading advocacy organization serving and advancing the interests of the ordinary Internet user. The services Spamhaus provides enable ISPs to protect Internet users against unwanted, unsolicited and frequently offensive materials and Internet users have told CAUCE that they want these services.
7. Datran Media Corp.: Datran Media is a leading media service company that specializes in managing life-cycle marketing for some of the country's largest marketers. Datran Media has worked extensively with Spamhaus on an ongoing basis, ensuring that client practices meet or exceed industry standards.
8. EmailLabs: EmailLabs is an email service provider sending electronic mail for marketers worldwide. EmailLabs believes that organizations like Spamhaus are important to the email community for preventing unsolicited commercial email and identifying organizations that contribute to the overall spam problem. The prevention of spam helps not only the receivers of email, but also the legitimate marketers EmailLabs serves in their ability to send wanted and relevant email to people who have requested it.
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9. Michael Geist — a Professor of Law and Canada Research Chair in Internet and E-Commerce Law University of Ottawa: Mr. Geist served on Canada's National Task Force on Spam as the Co-Chair of the Legal and Regulatory Working Group. He also launched Canada's first successful privacy complaint involving unsolicited commercial email, and supports the efforts of Spamhaus.
10. Habeas, Inc.: Habeas, Inc. is an email reputation services provider that enables commercial email senders to certify their communications as legitimate. Habeas is interested in the outcome of this case in order to ensure the continued viability of email as a reliable business communications medium.
11. Internet Law Group, PLLC: Internet Law Group is a law firm based in Washington, D.C., that specializes in tracking, identifying and stopping the human sources of online fraud, including spam, phish and other Internet-based economic crimes. Its client base includes ISPs, ESPs, financial institutions, registering authorities, drug manufacturers and other online retailers whose brands are impacted by cybercrime, as well as IT security firms looking to provide solutions that go beyond blocking. Internet Law Group supports the efforts of Spamhaus.
12. Innovyx, Inc.: Innovyx, Inc. provides digital marketing solutions to advertising and marketing agencies, as well as Global 2000 enterprises. Because the viability of email as a communications medium is critical to
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Innovyx’s business, it supports Spamhaus and believes Spamhaus fulfills an important role in maintaining that viability.
13. Internet Tools, Inc.: Internet Tools, Inc. is a Texas corporation operating mail-list.com, a double opt-in mailing list host. Internet Tools has been using Spamhaus for many years, and has found it to be the best RBL operator by far. Spamhaus allows Internet Tools to reject large amounts of the spam it receives, before actually receiving the entire email, with no false positives. Internet Tools further believes that the plaintiff in this case is misusing the legal system and has acted in bad faith.
14. The Institute for Spam and Internet Public Policy (ISIPP): ISIPP consults both the public and private sector on email, anti-spam, and other Internet policies. Led by CEO Anne P. Mitchell, ISIPP has been at the forefront of the spam-containment and email delivery policy debates. Ms. Mitchell, a Professor of Law at Lincoln Law School of San Jose and instructor on Internet Law as well as other topics, has been involved in many wide-reaching public policy efforts such as helping to author the language of the McCain Amendment to the Controlling the Assault of Non-Solicited Pornography and Marketings (“CAN-SPAM”) Act of 2003, and consulting with then-Attorney General Bill Lockyer, and California Senator Kevin Murray, on anti-spam and email public policy. ISIPP supports the efforts of Spamhaus.
15. Chris Lewis — Senior Technical Advisor of Messaging Anti-Abuse Working Group (MAAWG): Mr. Lewis believes that spam (and related abuses, such as viruses and phishes) are the largest single impediment to the growth of
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the Internet, and ultimately to overall economic growth. If email collapses under the increasing load of spam and the end-user aversion to the flood of spam e-mails (many organizations are seeing more than 90% of all email is malicious traffic), Mr. Lewis believes this result will be felt in the overall economy. Mr. Lewis believes Spamhaus is the most highly respected/widely used player in the field, helping to protect hundreds of millions of Internet users, and saves industry — not just ISPs, but large corporate and private users, as well — many millions, if not billions of dollars annually in lost productivity, infrastructure and cleanup costs. Mr. Lewis believes that allowing the district court’s decision to stand emperils the long term viability of email.
16. John Levine — Chair of the Anti-Spam Research Group of the Internet Research Task Force, and Operator of the Network Abuse Clearinghouse: Dr. Levine is the Chair of the Anti-Spam Research Group (“ASRG”), which is the leading forum to coordinate anti-spam research, and operates abuse.net, the most widely used source of spam reporting contact data with over 140,000 registered users. Dr. Levine is the author of many books on the Internet and e-mail, including the popular "Internet for Dummies." Dr. Levine supports the efforts of Spamhaus.
17. Mailshell, Inc.: As a global provider of spam filtering software, Mailshell closely monitors the negative effects spam has on Internet users and on the Internet's overall infrastructure. Mailshell believes that groups of Internet users, including Spamhaus, have the right to gather and share data about spam and other perceived Internet-based threats.
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18. MV Communications, Inc.: MV Communications is an ISP of long standing in New Hampshire. One of the most important services that MV Communications provides is delivery and transport of email, which is made difficult with the ever-increasing volume of spam. By taking the opinions of organizations like Spamhaus into account, MV Communications can make filtering spam more manageable, less costly, and in many cases possible at all.
19. Return Path, Inc.: Return Path is interested in improving and protecting the email inbox experience. Return Path believes that this case will help to define the rights of email receivers to use anti-spam mechanisms to provide the best email experience for the consumer.
20. Secure Computing Corp.: Secure Computing provides Internet security solutions to enterprises and has the responsibility of protecting tens of thousands of organizations around the world from unwanted and malicious email and network activity. Secure Computing’s interest in this case pertains to preserving the right and ability to protect email systems from such threats.
21. SnertSoft: SnertSoft is an online business for the development, distribution, and support of commercial and free software titles, whose current products focus on email filtering. Two of SnertSoft’s current titles and a soon to be released new product all take advantage of spam blacklists and/or reputation services such as Spamhaus, SURBL.org, and URIBL.com. While there are many black list services, SnertSoft believes that Spamhaus has one of the largest and most accurate databases available, and losing such a valuable
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resource would severely reduce its customers’ ability to manage their mail servers as they see fit.
22. Spin, s.r.l.: Spin is an Italian Internet provider operating since 1995, with a customer base mainly constituted of small and medium businesses. Spin has been and continues to work hard to give its customers the best possible environment for their e-mail communications. To create this optimal environment, Spin seeks to keep its customers’ mailboxes free of bulk unsolicited mail (spam), ensure that real non-spam messages arrive into its customers’ mailboxes, and solve any operational problem as quickly as possible. Spin has found the Spamhaus databases to be a crucial ingredient towards achieving these goals.
23. SURBL: SURBL is an organization providing anti-spam data. SURBL believes that Spamhaus freely publishes vital information in the public interest which helps keep much of the Internet mail infrastructure up and running. Without the use of this information, SURBL believes that the Internet mail infrastructure used by and benefiting courts, government agencies, hospitals, universities, schools, companies, organizations and hundreds of millions of individuals around the world would very likely collapse under the burden of attempting to process the massive flood of spam.
24. TalkBiz, Inc.: TalkBiz is an email service provider sending messages for customers worldwide. Spamhaus' ability to block spam without blocking solicited email helps to ensure that TalkBiz’s customers and subscribers are able to receive, find and read its mailings. Without Spamhaus, TalkBiz's
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business would be severely damaged as its readers would be flooded with unsolicited spam emails, making it less likely its messages would be read.
25. Unspam Technologies, Inc.: Unspam is the leader in working with governments to author and implement legislation to protect email users from unwanted messages. Unspam's interest is in a healthy email ecosystem and believes organizations like Spamhaus are critical to achieving this goal.
26. Paul Vixie: Mr. Vixie is the original founder of MAPS LLC, the Internet's first anti-spam company. Mr. Vixie believes that the ruling and judgment against Spamhaus in this case ought to be reversed.
27. Webmail.us, Inc.: Webmail.us is an email hosting provider for approximately 35,000 businesses globally, with the majority being small to medium sized US based businesses. Spamhaus provides live data to the Internet community, which enables companies like Webmail.us to make intelligent decisions about what email traffic to allow and what traffic to block. It is critical to have access to this data, because being able to make informed decisions when blocking unwanted email traffic is vital to the long-term viability of email.
28. Whizardries, Inc.: Whizardries is a web hosting and development company that also provides consulting services to attorneys on electronic mail issues. Whizardries hosts approximately 15 domains and uses zen.spamhaus.org as part of its email filtering scheme. On an average day, Whizardries estimates that Spamhaus blocks around 2,500 pieces of spam,
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representing approximately 97% of the total amount of spam blocked by its system.
29. Derek Wyatt — Member of Parliament and Chairman of the All Party Internet Group: Mr. Wyatt, MP, has led debates on addressing the problems associated with spam email in the United Kingdom, the Organisation for Economic Co-operation and Development (OECD), and the International Telecommunications Union/World Summit on the Information Society (ITU-WSIS). Mr. Wyatt believes Spamhaus has been outstanding in supplying him and the All Party Internet Group with information on the spam email problem, and in providing evidence for an All Party Internet Group Inquiry in 2003.
ARGUMENT
The amici contend that anti-spam mechanisms, such as those provided by Spamhaus, are critical to the sustained functioning of Internet email. The default judgment against Spamhaus threatens to establish a dangerous precedent that undercuts the right of entities concerned with email such as the amici to limit what messages are allowed onto their networks. This right has been legislatively codified and repeatedly affirmed by the courts. Upholding the default judgment would allow a legal end-run around this right and threaten a valuable source of information entities concerned with email use to block spam.
Email is not a resource without limits. Today many entities concerned with email, including some of the amici, are taxed to the breaking point under an increasing flood of spam. Since the district court entered the default judgment
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against Spamhaus in September of 2006, there has been a massive increase in the volume of spam messages being sent. See Cara Garretson, What’s With All This Spam?, Network World, Nov. 8, 2006, http://www.networkworld.com/news/2006/110806-image-spam.html (spam levels spiked as much as 80 percent in November).
Anti-spam researchers now widely report that spam represents more than 90 percent of all email messages traveling across the Internet. See, e.g., Postini Message Security and Management Update for October Reveals that Spam is Back With a Vengeance, Postini, Nov. 6, 2006, http://www.postini.com/news_events/pr/pr110606.php (stating that “91% of all email is now spam”); 2006: The Year Spam Raised Its Game and Threats Got Personal, MessageLabs, Dec. 14, 2006, http://www.messagelabs.com/portal/server.pt/gateway/PTARGS_0_5882_476_31... publish/about_us_dotcom_en/news___events/press_releases/DA_174397.html; Report on Spam, Viruses and Spyware Highlight Trends of 2006 and Predictions for 2007, IronPort, Dec. 19, 2006, http://www.ironport.com/company/ironport_pr_2006-12-19.html.
If end users today perceive that they are receiving less spam it is not because spammers are sending fewer messages. Instead, the perceived decrease in spam has resulted from the development of improved filtering and technological mechanisms, such as those provided by Spamhaus. These mechanisms allow access to information so that entitites concerned with email
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may make informed choices as to what messages are ultimately delivered. In other words, the number of spammers in the world has not likely decreased, but, because of information provided by organizations like Spamhaus, ISPs, email consultants, and email senders and receivers are able to better identify spammers and stop their messages before they are delivered. Unfortunately, the district court’s default judgment threatens this free flow of information and endangers the systems that have allowed for the continued viability of email.
I. The Entry of Default Judgment Should Be Reversed Because It Does Not Comport With Principles of Due Process and Threatens International Volunteer Organizations that Ensure the Continued Viability of Internet Email.
While Spamhaus’ brief sets forth the compelling and convincing argument for reversing the default judgment due to improper service of process and the district court’s lack of personal jurisdiction over Spamhaus, the amici encourage this Court to consider the public policy rationales supporting a reversal of the default judgment. The Internet is an international community that is protected in large part by volunteers from all over the world. If the default judgment and permanent injunction issued by the district court were upheld, it would set a dangerous precedent that would surely chill, if not entirely halt, the efforts of international volunteers that police, protect, and preserve the successful and legal operation of the Internet.
Spamhaus, like many of the groups that protect the Internet from those who would use it for harmful purposes, is a foreign, non-profit organization that relies entirely on the efforts of volunteers. Spamhaus’ SBL list is published on its United Kingdom-based website. The amici and other entities concerned
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with email then utilize this well-developed list in adopting filtering systems to prevent their users from receiving unsolicited, commercial email spam. Given these facts, the amici agree with Spamhaus’ opening brief: Spamhaus is a non-profit corporation based in the United Kingdom whose website only provides information, and the district court therefore lacked personal jurisdiction over Spamhaus in Illinois. (Defendant-Appellant Spamhaus’ Opening Brief at 17-26).
The amici request that this Court apply strict standards when assessing the district court’s personal jurisdiction over Spamhaus. A court’s personal jurisdiction over a non-resident corporate defendant is an inherently limited power, requiring “certain minimum contacts with [the forum] such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice.” Int’l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945) (internal quotations omitted). The amici stridently believe that foreign organizations like Spamhaus — who do not sell products in a state, have no employees in a state, and exist only as a public interest information source on the Internet — lack the “minimum contacts” necessary to establish personal jurisdiction, and it would thus “offend traditional notions of fair play and substantial justice” to require Spamhaus to defend this suit in a court sitting in Illinois, much less pay a judgment in excess of $11 million.
Beyond this case, the danger of allowing the lower court’s default judgment to stand is that it may create a significant chilling effect on other volunteer organizations providing information critical to the continued functioning of the
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Internet. Numerous international volunteer watchdog groups police the Internet, protecting users from computer viruses, the “phishing” of confidential data, child pornography, and other Internet-related or Internet-assisted criminal behavior. These watchdog groups, in turn, save law-enforcement groups and businesses the countless costs of fighting these problems themselves. Spamhaus’ SBL list is used by many of the world’s largest ISPs, corporations, universities, governments, and military networks to filter out unwanted bulk emails; in fact, the email addresses of all United States federal court judges and employees are currently protected from undesirable “spam” email by a filtering system utilizing Spamhaus’ SBL list. However, the policy embraced in the district court’s default judgment, over a foreign non-profit organization without a finding of personal jurisdiction, threatens to chill or halt the efforts of Internet “Good Samaritans” like Spamhaus. Upholding the district court’s default judgment and permanent injunction in this case, even though the court never considered personal jurisdiction, sends a message that any of these watchdog groups or “Good Samaritans” can be hailed into court anywhere in the United States and required to defend against a lawsuit, even if they have no contacts, much less “minimum contacts” with that forum. Such a result cannot conform with the basic principles of Due Process and personal jurisdiction.
The continued viability of Internet email relies on the information and mechanisms provided by organizations like Spamhaus. If the default judgment and permanent injunction are upheld, the amici are concerned that the
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individuals and organizations that abuse the Internet will be emboldened to use the legal system to intimidate and harass the “Good Samaritan” organizations that protect the Internet. This Court should therefore reverse the district court’s default judgment and permanent injunction, requiring the district court to properly determine whether it has personal jurisdiction over Spamhaus and allowing the case to proceed on the merits.
II. Internet Service Providers and Anti-Spam Organizations Like Spamhaus Are Shielded from Liability by Statute and Legal Precedent.
A. Individual ISPs, not Spamhaus, decide whether messages are allowed onto their networks.
In ruling on Spamhaus’ appeal, the amici urge this Court to recognize that Spamhaus does not actually block messages or email addresses. Instead, entities concerned with email (including the amici) voluntarily and individually elect to use information from Spamhaus and other sources to determine what messages sent to their networks should be allowed. The criteria used by each email related entity are different and determined by the individual entities on their own. No ISP, email consultant, email sender or email receiver is forced to use Spamhaus’ data. That so many entities concerned with email have chosen to make use of the information provided by Spamhaus is a testament to its value. To use an analogy, Spamhaus is like a movie reviewer, email related entities are like moviegoers, and email message senders are like movies. Because time is limited and moviegoers cannot see every film that is released, each moviegoer independently relies on the opinions of different reviewers in order to determine what movies to see. If one movie reviewer’s opinions become
1 5
widely followed it is because, in the marketplace of movie reviews, over time he has reliably identified quality films. If a reviewer makes mistakes, very quickly moviegoers stop relying on him because the moviegoers’ interest, given their limited time, is in seeing good movies and avoiding bad ones.
Given limited technological resources, ISPs, email consultants, and email senders and receivers are interested in delivering good messages and blocking bad ones. Just like moviegoers, these entities concerned with email rely on a number of sources of information before deciding whether a message should be allowed onto their networks. To hold Spamhaus liable for the information it provides is akin to a movie producer receiving a judgment against a movie reviewer for a film’s failure.
B. Congress specifically granted ISPs immunity from liability for blocking email messages and otherwise exercising their editorial functions under the Controlling the Assault of Non-Solicited Pornography and Marketings (“CAN-SPAM”) Act of 2003.
The amici, as ISPs, email consultants, and email senders and receivers, are the beneficiaries of federal statutory protection from liability connected to their email filtering and blocking decisions, under the Communications Decency Act (“CDA”) of 1996, 47 U.S.C. § 230, and the Controlling the Assault of Non-Solicited Pornography and Marketings (“CAN-SPAM”) Act of 2003, 15 U.S.C. § 7701-7713. The CDA states:
(1) No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider. (2) No provider or user of an interactive computer service shall be held liable on account of (A) any action voluntarily taken in good faith to restrict access to or availability of material that the provider or user considers to be obscene, lewd, lascivious, filthy, excessively violent, harassing, or
1 6
otherwise objectionable, whether or not such material is constitutionally protected; or (B) any action taken to enable or make available to information content providers or others the technical means to restrict access to material described in paragraph (1).
47 U.S.C. § 230(C)(2). Under the CDA, an “interactive computer service provider” is defined as “any information service, system, or access software provider that provides or enables computer access by multiple users to a computer server, including specifically a service or system that provides access to the Internet and such systems operated or services operated by libraries or educational institutions.” 47 U.S.C. § 230(f)(2).
As “interactive computer service providers,” the amici are thus immune from suit for their “action[s] voluntarily taken in good faith to restrict access to or availability of material that the provider or user considers to be…harassing, or otherwise objectionable, whether or not such material is constitutionally protected,” — in other words, the blocking of spam. See America Online, Inc. v. GreatDeals.Net, 49 F.Supp.2d 851, 855, 864 (E.D. Va. 1999) (noting that blockage of unsolicited bulk email was encouraged by the CDA). The CDAs immunity permitting entities concerned with email to block spam should be extended to the organization many of these entities rely upon to make filtering decisions — Spamhaus.
Furthermore, email related entities also enjoy immunity from suit by the CAN-SPAM Act, 15 U.S.C. § 7701-7713 (2003). To the amici’s knowledge, the provisions of the CAN-SPAM Act have never been addressed by any court
1 7
within the Seventh Circuit, and would thus be a matter of first impression for this Court.
As noted above, entities concerned with email using Spamhaus’ SBL list fall under the provisions of CAN-SPAM as “internet access servers” as defined by 15 U.S.C. § 7702(11) and 47 U.S.C. § 231(e)(4). As “internet access service,” entities using Spamhaus’ SBL list are entitled to immunity from suit for blocking email messages such as those issued by e360, since CAN-SPAM states that “[n]othing in this Act shall be construed to have any effect on the lawfulness or unlawfulness, under any other provision of law, of the adoption, implementation, or enforcement by a provider of Internet access service of a policy of declining to transmit, route, relay, handle, or store certain types of electronic mail messages.” 15 U.S.C. § 7707(c) (2003). In other words, email related entities relying on the Spamhaus SBL list have the statutory right to adopt policies blocking e360’s electronic mail messages, free and immune from any suit punishing them for doing so.
While no court in the Seventh Circuit has addressed this aspect of CAN-SPAM, the Fifth Circuit Court of Appeals considered CAN-SPAM in White Buffalo Ventures v. University of Texas at Austin, 420 F.3d 366 (5th Cir. 2005), cert. denied, 126 S. Ct. 1039 (2006), in a case involving messages from an online dating service that had been blocked by the University of Texas based on its internal anti-solicitation policies banning unsolicited bulk commercial emails. White Buffalo, 420 F.3d at 368. According to the Fifth Circuit, CAN-SPAM recognized “Congress’s acknowledgement of ‘the problems associated
1 8
with the rapid growth and abuse of unsolicited commercial email [that] cannot be solved by Federal legislation alone’ but that will also require ‘the development and adoption of technological approaches’ to serve the goals of the Act.’” Id. at 371-72 (quoting 15 U.S.C. § 7701(a)(12) (2003)). Furthermore, CAN-SPAM “does not preclude a state entity like UT from using technological devices [such as] spam filters to conserve server space and safeguard the time and resources of its employees, students, and faculty.” Id. at 372 (internal quotation omitted). Indeed, as the Fifth Circuit acknowledged, the language of CAN-SPAM § 7707(c) expressly allowing ISP’s and other email related entities to adopt their own policies for blocking or transmitting email messages was “in tension” with White Buffalo’s suggestion that the company’s compliance with CAN-SPAM required the University of Texas to transmit White Buffalo’s email messages. Id. at 372-73.
Other cases, too, have supported the Fifth Circuit’s holding that CAN-SPAM affords ISPs, email consultants, and email senders and receivers immunity from suit related to their decisions to block unwanted email messages; ISPs have successfully and repeatedly enforced their legal right to keep spam off their networks. See Verizon Online Servs., Inc. v. Ralsky, 203 F. Supp. 2d 601 (E.D. Va. 2002) (sending spam held to be a trespass to the ISP’s servers); America Online, Inc. v. CN Productions, 272 B.R. 879 (E.D. Va. 2002) (ISP injured by spam messages); MaryCLE, LLC v. First Choice Internet, Inc., 166 Md. App. 481, 890 A.2d 818 (2006) (sending spam causes tortious injury to an ISP).
1 9
C. The limitations of liability has been extended to anti-spam services like Spamhaus.
The liability protections in the CAN-SPAM Act and the CDA extend beyond merely ISPs to the providers of anti-spam mechanisms like Spamhaus. In OptInRealBig.com, LLC v. Ironport Sys., Inc., 323 F. Supp. 2d 1037 (N.D. Cal. 2004), an anti-spam company (using SpamCop technology) was sued by a bulk email sender. The SpamCop service is technically similar to Spamhaus’ SBL because it uses information provided by volunteers to identify senders of spam and report their IP addresses to receivers. Id. at 1040 (“SpamCop is an interactive Internet-based service whose mission is to reduce spam by reporting complaints to ISPs that provide Internet access to the senders of spam”); compare SpamCop.net, http://www.spamcop.net (last visited Feb. 28, 2007) (“SpamCop is the premier service for reporting spam. SpamCop determines the origin of unwanted email and reports it to the relevant Internet service providers.”) with Spamhaus.org, http://www.spamhaus.org (last visited Feb. 28, 2007) (“Spamhaus tracks the Internet's Spammers, Spam Gangs and Spam Services, provides dependable realtime anti-spam protection for Internet networks, and works with Law Enforcement to identify and pursue spammers worldwide.”).
OptInRealBig is important because of its factual similarity to the case at hand. In OptInRealBig, the court specifically extended the CDA protections to mechanisms like those provided by Spamhaus. OptInRealBig, 323 F. Supp. 2d at 1043–44. The court held that the companies shielded by the CDA include “a
2 0
wide range of cyberspace services, not only internet service providers.” Id. at 1044 (citing Blumenthal v. Drudge, 992 F.Supp. 44 (D.D.C. 1998); Gentry v. eBay, Inc., 99 Cal.App.4th 816, 831, 121 Cal. Rptr. 2d 703 & n.7 (2002); Schneider v. Amazon.com, 108 Wash. App. 454, 31 P.3d 37, 40–41 (2001)). The court concluded that services like SpamCop and Spamhaus specifically qualify as “interactive service providers” and therefore also receive protection under Section 230 of the CDA. Id.
Thus, Spamhaus is protected under the CDA, and the default judgment should be reversed because the underlying causes of action alleged by e360 are blocked by federal statute.
III. The Permanent Injunction Issued by the District Court Creates a Legal Standard and Process that is Unworkable and Would Thwart Any Attempts by ISPs to Block Spam.
The permanent injunction entered by the district court, requiring proof by “clear and convincing evidence” that a U.S. “law” has been violated will completely thwart any attempts by ISPs, email consultants, and email senders and receivers utilizing services such as Spamhaus and SpamCop, to block email spam. As discussed above, organizations like Spamhaus and SpamCop, gather information from volunteers that police the Internet. The anti-spam organizations also have “spam traps” and utilize other methods prior to determining that email constitutes “spam” and listing that address on the SBL list. Thus, there is evidence of “spamming” prior to an individual or organization being listed on the SBL list. However, the injunction creates an unworkable standard by requiring this proof by “clear and convincing
2 1
evidence.” Thus, allowing the permanent injunction to stand will cause a chilling effect to the organizations (and volunteers) that provide entities concerned with email with the information necessary to control the problem of spam messages. That chilling effect directly contradicts the Congressional intent apparent in the CDA, where Congress recognized that email related entities would need to utilize some type of approach in order to combat spam messages. Thus, the permanent injunction issued against Spamhaus should be reversed.
CONCLUSION
Allowing the district court’s default judgment against Spamhaus to stand would have disastrous consequences upon the continued efficient and legal functioning of the Internet worldwide. For all of the reasons stated in Defendant-Spamhaus’ Opening Brief and all the reasons set forth in this brief, the amici respectfully request that this Court reverse the district court’s default judgment against Spamhaus.
2 2
Respectfully submitted,
By:
Matthew B. Prince
Adjunct Professor of Internet Technology Law at John Marshall Law School
9prince@jmls.edu
1901 Prospector Avenue,
Suite 200
Park City, UT 84060
(435)615-9205
2 3
CERTIFICATE OF COMPLIANCE WITH TYPE-VOLUME LIMITATION, TYPEFACE REQUIREMENTS AND TYPE-STYLE REQUIREMENTS
1. This brief complies with the type-volume requirements of Fed. R. App. P. 32(a)(7)(B) because this brief contains 5,271 words excluding the parts of the brief exempted by Fed. R. App. P. 32(a)(7)(B)iii.
2. This brief complies with the typeface requirements of Fed. R. App. P. 32(a)(5) and the type style requirements of Fed. R. App. P. 32(a)(6) because this brief has been prepared in a proportionally spaced typeface using Microsoft Office Word 2003 in Bookman Old Style 12 font.
_____________________
Matthew B. Prince
Dated: February 28, 2007
2 4
CERTIFICATE OF SERVICE
I, Matthew B. Prince, an attorney, hereby certify that I served two copies of the foregoing: (1) Brief of Amicus Curiae in Support of Defendant-Appellant and Reversal; (2) a CD containing the Brief of Amicus Curiae in Support of Defendant-Appellant and Reversal in a searchable PDF format; and the (3) the Motion in Support of Defendant-Appellant and Reversal upon:
Joseph L. Kish
Matthew M. Neumeier
Kristen M. Lehner
Craig C. Martin
Bartly Joseph Loethen
Carrie A. Fino
Synergy Law Group, L.L.C.
JENNER & BLOCK LLP
730 West Randolph Street
330 North Wabash Avenue
6th Floor
Chicago, IL 60611
Chicago, IL 60661
Phone: (312) 222-9350
Phone: (312) 454-0015
Fax: (312) 527-0484
Fax: (312) 454-0261
by depositing same in the United States Mail, postage prepaid, on this 28th day of February 2007.
____________________________________
Matthew B. Prince
Spamhaus Reply Brief
Nos. 06-3779 and 06-4169
______________________________________
IN THE UNITED STATES COURT OF APPEALS
FOR THE SEVENTH CIRCUIT
______________________________________
THE SPAMHAUS PROJECT, a
company limited by guarantee and
organized under the laws of England,
a/k/a THE SPAMHAUS PROJECT,
LTD.,
Defendant-Appellant,
vs.
e360 INSIGHT, LLC, an Illinois
Limited Liability Company, and
DAVID LINHARDT, an individual,
Plaintiffs-Appellees.
______________________________________
Appeal from the United States District Court
for the Northern District of Illinois,
District Court No. 06 C 3958
The Honorable Charles P. Kocoras, District Judge
______________________________________
REPLY BRIEF OF DEFENDANT-APPELLANT
THE SPAMHAUS PROJECT
______________________________________
Matthew M. Neumeier
Craig C. Martin
Carrie A. Fino
JENNER & BLOCK LLP
330 North Wabash Ave.
Chicago, IL 60611
(312) 222-9350
April 6, 2007
i
TABLE OF CONTENTS
ARGUMENT................................................................ 1
I. e360’s Supplemental Appendix Consists Almost Entirely of Materials
That Were Not a Part of the District Court Record and These Materials,
and Any Arguments Based on Them, Should Be Stricken and Ignored ... 1
II. The Entry of Default Judgment Must be Vacated Because the District
Court Failed to Find that Service of Process was Properly Effected and to
Determine Whether it Had Personal Jurisdiction over Spamhaus ........... 3
A. Spamhaus did not Waive or Forfeit its Defenses Regarding Lack of
Personal Jurisdiction and Improper Service of Process.................. 3
1. Spamhaus’ removal of the case on diversity grounds did not
waive or forfeit its personal jurisdiction and service of
process defenses ........................................................ 4
2. Spamhaus did not waive its Fed. R. Civ. P. 12(b) defenses by
failing to file them in a pre-answer motion .......................... 5
3. Spamhaus was granted permission, without objection from
e360, to withdraw both its Answer and its appearance in
the case, and therefore has done nothing that could have
waived its jurisdictional defenses ........................................ 5
B. The District Court Erred in Failing to Consider Whether Service
was Properly Effected on Spamhaus, and Whether it had Personal
Jurisdiction over Spamhaus......................................................... 8
III. The Entry of Default Judgment Must Be Vacated Because the District
Court Failed to Properly Apply the Traditional Test for Injunctive Relief
and Federal Rule of Civil Procedure 65, and Entered an Injunction that
Violates the First Amendment.............................................................. 13
A. The District Court Failed to Apply the Traditional Four-Factor Test
for Injunctive Relief and Rule 65, and Therefore Improperly
Entered a Preliminary and Permanent Injunction ....................... 13
B. The Permanent Injunction Entered by the District Court Violates
the First Amendment.................................................................. 17
1. Spamhaus’ opinion regarding spam is protected speech
under the First Amendment .............................................. 17
2. The Injunction impermissibly compels speech................... 19
ii
3. The Injunction is Impermissibly Broad.............................. 21
IV. The District Court Erred in Denying Spamhaus’ Federal Rule of Civil
Procedure 60(b) Motion to Vacate the Default Judgment ...................... 22
CONCLUSION ................................................................. 25
CERTIFICATE OF COMPLIANCE WITH TYPE-VOLUME LIMITATION,
TYPEFACE REQUIREMENTS AND TYPE-STYLE REQUIREMENTS ....... 26
CERTIFICATE OF COMPLIANCE WITH CIRCUIT RULE 31(e) ......................... 27
CERTIFICATE OF SERVICE .......................................................... 28
iii
TABLE OF AUTHORITIES
Alexander v. United States, 509 U.S. 544 (1993)............................. 18, 19
Allen v. Ferguson, 791 F.2d 611 (7th Cir. 1986)...................................... 4
American Patriot Insurance Agency, Inc. v. Mutual Risk
Management, Ltd., 364 F.3d 884 (7th Cir. 2004)................................ 5
Atiyeh v. Capps, 449 U.S. 1312 (1981) ........................................... 15, 18
Berwick Grain Co., Inc. v. Illinois Department of Agriculture, 116
F.3d 231 (7th Cir. 1997)................................................................ 1, 2
Board of Trustees v. Elite Erectors, Inc., 64 F.Supp.2d 839
(S.D. Ind. 1999) ........................................................................ 22, 24
Cantor Fitzgerald, L.P. v. Peaslee, 88 F.3d 152 (2d. Cir. 1996) ................ 4
Cohen v. California, 403 U.S. 15 (1971)................................................ 18
Custom Vehicles, Inc. v. Forest River, Inc., 464 F.3d 725
(7th Cir. 2006) ............................................................... 1
Dundee Cement Co. v. Howard Pipe & Concrete Products, Inc., 722
F.2d 1319 (7th Cir. 1983)................................................................ 24
Ebay Inc. v. Mercexchange, LLC, 126 S.Ct. 1837 (2006) ........................ 14
Eden v. Klaas, 165 Neb. 323 (Neb. 1957) ............................................. 24
EEOC v. Severn Trent Serv., Inc., 358 F.3d 438 (7th Cir. 2004) ............. 15
Entertainment Software Associate v. Blagojevich, 404 F.Supp.2d
1051 (N.D. Ill. 2005).................................................................. 19, 20
Guebard v. Jabaay, 117 Ill.App.3d 1, 452 N.E.2d 751, 72 Ill. Dec.
498 (1983) .................................................................................... 6, 7
Holmberg v. Baxter Healthcare Corp., 901 F.2d 1387
(7th Cir. 1990) ................................................................ 1
Johnson v. Nordstrom, Inc., 260 F.3d 727 (7th Cir. 2001) ..................... 24
iv
Mid-Continent Wood Products, Inc. v. Harris, 936 F.2d 297
(7th Cir. 1991) ............................................................... 2
Morris & Co. v. Skandinavia Insurance Co., 81 F.2d 346
(7th Cir. 1936) ............................................................... 4
Organization for a Better Austin v. Keefe, 402 U.S. 415 (1971) ..17, 18, 19
Perry v. Sullivan, 207 F.3d 379 (7th Cir. 2000)....................................... 5
Product Components, Inc. v. Regency Door & Hardware, Inc., 568
F.Supp. 651 (D. Ind. 1983)................................................................ 4
R.A.V. v. St. Paul, 505 U.S. 377 (1992) ................................................. 18
Reynolds v. International Amateur Athletic Federation, 23 F.3d
1110 (6th Cir. 1994).......................................................................... 7
Silva v. City of Madison, 69 F.3d 1368 (7th Cir. 1995) .........10, 11, 12, 13
Swaim v. Moltan Co., 73 F.3d 711 (7th Cir. 1996)........................... 7, 8, 9
Turner Broad. System v. FCC, 512 U.S. 622 (1994)......................... 19, 20
United States v. Raymond, 228 F.3d 804 (7th Cir. 2000) ........................ 1
Virginia State Board of Pharmacy v. Virginia Citizens Consumer
Council, Inc., 425 U.S. 748 (1976).................................................... 20
Way v. Mueller Brass Co., 840 F.2d 303 (5th Cir. 1988)...................... 2, 3
Wheeler v. Sunbelt Tool Co., Inc., 181 Ill.App. 1088, 537 N.E.2d
1332, 130 Ill. Dec. 863 (1989) ....................................................... 6, 7
White v. Cleveland Foundry Co., 24 Ohio C.C. (n.s.) 180 (1902) .............. 6
STATUTES
Communications Decency Act, 47 U.S.C. § 230 et seq.......................... 23
Controlling the Assault of Non-Solicited Pornography and
Marketings (CAN-SPAM) Act of 2003, 15 U.S.C. § 7701-7713 .......... 23
v
RULES
Fed. R. Civ. P. 12 ........................................................................... 3, 4, 5
Fed. R. Civ. P. 65 ........................................................................... 15, 16
Fed. R. Civ. P. 81 ................................................................................. 10
MISCELLANEOUS
6 C.J.S. Appearances § 32 ................................................................. 4, 5
71 C.J.S. Pleadings § 589 .................................................................. 6, 7
ARGUMENT
I. e360’s Supplemental Appendix Consists Almost Entirely of Materials
That Were Not a Part of the District Court Record and These Materials,
and Any Arguments Based on Them, Should Be Stricken and Ignored.
This Court should note a major deficiency in e360’s Response Brief —
namely, that it references and relies on a great deal of “evidence” that was
never part of the district court record. In fact, of the seventeen documents
included in e360’s Supplemental Appendix, only one complete document — the
Temporary Restraining Order (SA. 408-11) — was actually before the district
court.1 An astonishing 415 of the 419 pages of e360’s Supplemental Appendix
are thus wholly irrelevant to this appeal.
While the Federal Rules of Appellate Procedure and the rules of this Court
do not authorize a motion to strike portions of an appellate brief, see Custom
Vehicles, Inc. v. Forest River, Inc., 464 F.3d 725, 726-28 (7th Cir. 2006), this
Court has consistently refused to consider arguments or evidence presented by
a party that were not within the district court record. United States v.
Raymond, 228 F.3d 804, 809 n.5 (7th Cir. 2000) (inclusion of documents in
appellee’s appendix to its brief “that were not included in the record before the
district court below…was improper”); Holmberg v. Baxter Healthcare Corp., 901
F.2d 1387, 1393 n.4 (7th Cir. 1990) (references in appellee’s brief to documents
that were not entered into the record were properly stricken). “The appellate
stage of the litigation process is not the place to introduce new evidentiary
1 While parts of other documents in the Supplemental Appendix did
appear in the district court’s official record, the Temporary Restraining Order is
the only complete document from e360’s Supplemental Appendix to appear in
its entirety in the district court’s official record.
2
materials.” Berwick Grain Co., Inc. v. Ill. Dep’t of Agric., 116 F.3d 231, 234 (7th
Cir. 1997).
Included in the Supplemental Appendix’s extraneous and irrelevant
materials are a number of purported Affidavits of Service, claiming that various
pleadings were personally served on Spamhaus in the United Kingdom (SA.
021, 192, 412-14). Beyond being outside of the record, the inclusion of these
documents is improper for two additional reasons. First, Spamhaus has
consistently refuted any suggestion that service of process was ever effected
upon it.2 Second, these affidavits were never before the district court at any
point before, during, or after it entered its default judgment. e360’s improper
inclusion of these documents demonstrates that the district court’s entry of
default judgment against Spamhaus was void, because the district court lacked
any evidence that Spamhaus had been properly served or that it had personal
jurisdiction over Spamhaus. Proof of valid service of process is a prerequisite to
asserting personal jurisdiction over a defendant, and absent such proof the
default judgment is void. See Mid-Continent Wood Prods., Inc. v. Harris, 936
F.2d 297, 301 (7th Cir. 1991) (“This court has long held that valid service of
process is necessary in order to assert personal jurisdiction over a
defendant . . . Moreover, it is well recognized that a ‘defendant’s actual notice of
the litigation . . . is insufficient to satisfy Rule 4’s requirements.’”) (quoting Way
2 Should this Court vacate the district court’s default judgment,
Spamhaus is prepared to offer affidavit evidence by Tony Overington stating
that he was not authorized to accept service on behalf of Spamhaus and never
did so, in direct contradiction to the purported Affidavits of Service e360 has
improperly included in its Supplemental Appendix.
3
v. Mueller Brass Co., 840 F.2d 303, 306 (5th Cir. 1988)) (internal citations
omitted). Spamhaus therefore respectfully requests that this Court disregard
these materials from outside of the district court’s record, as well as Plaintiffs-
Appellees’ arguments based on them.
II. The Entry of Default Judgment Must be Vacated Because the District
Court Failed to Find that Service of Process was Properly Effected and to
Determine Whether it Had Personal Jurisdiction over Spamhaus.
Rather than addressing the merits of Spamhaus’ argument that the district
court failed to consider whether service of process was proper upon Spamhaus
and whether it had personal jurisdiction over this United Kingdom company,
e360 instead attempts to argue that Spamhaus waived or forfeited its personal
jurisdiction and service of process related objections. (Resp. Br. 13-14). In an
ironic twist, e360’s improper submission of extraneous documents actually
solidifies the basis of Spamhaus’ appeal: the district court erred both because
it lacked any evidence regarding proper service of process upon Spamhaus,
and because it never inquired into its personal jurisdiction3 over Spamhaus.
A. Spamhaus did not Waive or Forfeit its Defenses Regarding Lack of
Personal Jurisdiction and Improper Service of Process.
e360 contends that Spamhaus waived its objections to service of process
and personal jurisdiction by (i) removing the case; (ii) failing to file a motion to
dismiss under Fed. R. Civ. P. 12(b); and (iii) withdrawing its answer. (Resp. Br.
13-14). These arguments are not legally supported.
3 e360 confuses personal jurisdiction and subject matter jurisdiction.
Subject matter jurisdiction is not an issue in this appeal.
4
1. Spamhaus’ removal of the case on diversity grounds did not
waive or forfeit its personal jurisdiction and service of
process defenses.
Spamhaus’ removal of this case to federal court did not waive its defenses
based on a lack of personal jurisdiction and improper service of process. A
party does not waive any defenses previously available to it merely by removing
an action to federal court. See Allen v. Ferguson, 791 F.2d 611, 614-15 (7th
Cir. 1986) (removal of a case does not waive any objections defendant may have
regarding personal jurisdiction); Morris & Co. v. Skandinavia Ins. Co., 81 F.2d
346, 351-52 (7th Cir. 1936) (questions involving validity of service of process on
a foreign corporation are to be determined by the federal court irrespective of
state law or decision, even though the case had been removed to federal court);
Cantor Fitzgerald, L.P. v. Peaslee, 88 F.3d 152, 157 (2d. Cir. 1996) (“Removal
does not waive any Rule 12(b) defenses.”); Product Components, Inc. v. Regency
Door & Hardware, Inc., 568 F. Supp. 651, 655 (D. Ind. 1983) (“Nor does
removal of an action from state to federal court result in a waiver of the defense
of lack of personal jurisdiction.”) “A petition for removal to a federal court is an
assertion of a federal right . . . and does not result in the petitioner appearing
generally” and thus waiving personal jurisdiction related defenses. 6 C.J.S.
Appearances § 32 (2000).
Spamhaus’ defenses regarding personal jurisdiction and service of process
are still preserved and valid.
5
2. Spamhaus did not waive its Fed. R. Civ. P. 12(b) defenses by
failing to file them in a pre-answer motion.
Under Federal Rules of Civil Procedure 12(g) and (h)(1), a defendant can
raise defenses of lack of personal jurisdiction and/or improper service of
process in either a Rule 12(b) motion or its responsive pleading. American
Patriot Ins. Agency, Inc. v. Mutual Risk Mgmt., Ltd., 364 F.3d 884, 887-88 (7th
Cir. 2004). There is no requirement that a party must raise these defenses in a
pre-answer motion. See Perry v. Sullivan, 207 F.3d 379, 381-83 (7th Cir. 2000)
(while Rule 12 permits certain defenses to be raised before filing a responsive
pleading, there is no requirement to raise those defenses until filing a
responsive pleading).
Spamhaus did not file a Rule 12(b) motion, but it properly raised lack of
personal jurisdiction and improper service of process defenses in both its
Notice of Removal (A. 2) and in its first responsive pleading in the district court,
which was its Answer. When that Answer was withdrawn without objection by
e360 or the district court, Spamhaus was put back in a position as if it had
simply never appeared or responded.
3. Spamhaus was granted permission, without objection from
e360, to withdraw both its Answer and its appearance in the
case, and therefore has done nothing that could have waived
its jurisdictional defenses.
Spamhaus’ withdrawal of its Answer did not forfeit or waive its objections to
personal jurisdiction and service of process. e360 fails to cite any precedent
supporting a contrary conclusion. There is a dearth of case law on the
procedural posture of a case upon the withdrawal of an answer, but the few
6
cases that address this issue support Spamhaus. See White v. Cleveland
Foundry Co., 24 Ohio C.C. (n.s.) 180, 183 (1902) (“permission having been
given to the defendant to withdraw his answer, the case stood as if no answer
had been filed”); Wheeler v. Sunbelt Tool Co., Inc., 181 Ill. App. 1088, 1105-06,
537 N.E.2d 1332, 1344, 130 Ill. Dec. 863 (1989) (“The withdrawal of an earlier
pleading leaves the issues in the same status as if the abandoned pleading had
not been filed”) (citing Guebard v. Jabaay, 117 Ill. App. 3d 1, 7, 452 N.E.2d
751, 756, 72 Ill. Dec. 498 (1983)); 71 C.J.S. Pleadings § 589 (2000) (“A
withdrawal of a pleading removes it from consideration, and leaves the issues
in the same status as though the withdrawn pleading had never been filed.”)
e360 failed to address this argument in its Response.
e360 essentially alternates between two contradictory, but similarly
incorrect, positions: (a) Spamhaus waived its personal jurisdiction and service
of process defenses by filing its Answer; and (b) by withdrawing the same
Answer, Spamhaus waived its personal jurisdiction and service of process
defenses. (Resp. Br. 13-17). As for the first contention, Spamhaus raised its
challenge to improper service of process in both the Notice of Removal (A. 002)
and the Answer (A. 031). Spamhaus further included its challenge to personal
jurisdiction in its Answer. (A. 031).
As for e360’s second contention, the Answer was withdrawn with the district
court’s permission and with no objection from e360. (A. 161, 164). In fact,
e360’s counsel expressly stated, “I don’t have any objection to them
withdrawing the answer.” (A. 161). At that time, e360’s counsel stated that if
7
the answer was withdrawn and Spamhaus was then in default, he would
expect a default judgment. (Id.). e360 and the district court both treated the
withdrawal of the Answer as if no answer had ever been filed, and thus a
default judgment was entered. (A. 162-66).
e360 essentially concedes that a defaulting party does not forfeit a
jurisdictional challenges by citing Swaim v. Moltan Co., 73 F.3d 711, 717 (7th
Cir. 1996) (Resp. Br. 20), where this Court held that defaulted parties generally
have not waived personal jurisdiction defenses because “it is unfair to strip
parties of a defense that may explain the omission that is potentially the basis
for judgment against them.” Other courts likewise hold that a personal
jurisdiction defense is not waived by a party in default. E.g., Reynolds v. Int’l
Amateur Athletic Fed’n, 23 F.3d 1110, 1120 (6th Cir. 1994). What e360’s
argument misses is that by withdrawing the Answer with the express
permission of the district court and without objection by e360, Spamhaus was
returned to a position as if the Answer had never been filed. Wheeler, 181 Ill.
App. at 1105-06, 537 N.E.2d at 1344, 130 Ill. Dec. 863; Guebard, 117 Ill. App.
3d at 7, 452 N.E.2d at 756, 72 Ill. Dec. 498; 71 C.J.S. Pleadings § 589 (2000).
Since Spamhaus neither filed a responsive pleading nor appeared in the case
(its appearance was withdrawn at the same time as its Answer (A. 162-66)), it
was impossible for Spamhaus to waive its personal jurisdiction and service of
process defenses, either by response or by conduct.
e360 attempts to distinguish Swaim from the situation before this Court by
arguing that Spamhaus invoked the district court’s jurisdiction by removing
8
the case, appearing, answering the complaint, and then later withdrawing the
answer. (Resp. Br. 20). However, as discussed above, removal alone is
insufficient to waive or forfeit challenges to personal jurisdiction and service of
process, and the removal petition explicitly raised the lack of service defense.
Furthermore, as discussed above, by allowing Spamhaus to withdraw its
Answer and appearance and stating that default would be entered for a failure
to defend the case, the district court placed Spamhaus back in a position as if
it had never appeared or answered. Thus, Spamhaus is a traditional defaulting
party under Swaim and has not forfeited its jurisdictional challenges.
Finally, in Swaim, this Court held that the defendant had not waived his
personal jurisdiction defenses by failing to answer and having a default
entered, but rather had waived those defenses because the defendant failed to
include personal jurisdiction arguments in its initial Rule 60(b) motion. Swaim,
73 F.3d at 717. Spamhaus, however, has preserved its lack of personal
jurisdiction defense in every motion it has made to the district court, including
its Rule 60(b) Motion to Vacate. (A. 150-54). Spamhaus has thus properly
preserved its personal jurisdiction and lack of service defenses, and these
issues should have been considered by the district court before entering the
default judgment and before denying the Motion to Vacate.
B. The District Court Erred in Failing to Consider Whether Service
was Properly Effected on Spamhaus, and Whether it had Personal
Jurisdiction over Spamhaus.
e360 fails to address the fact that the district court erred by failing to
consider whether service was properly effected on Spamhaus, and whether the
9
court had personal jurisdiction over Spamhaus. Rather, e360 attempts to jump
into the merits of whether service was proper by filing a Supplemental
Appendix that improperly includes documents that were never before the
district court. e360 relies on these extraneous documents and essentially
argues that because of the evidence presented, the result would be the same.
(Resp. Br. 16-17).4 The issue currently before this Court, however, is whether
the district court ever considered service of process. Spamhaus asserts and
e360 does not refute that the district court failed to do so.
e360 further contends that there was nothing before the district court to
suggest that service or personal jurisdiction was insufficient. Id. This assertion
is simply erroneous. Spamhaus asserted an objection to service of process in
both the Notice of Removal and the Answer, and the court had notice of
potential personal jurisdiction problems as well, given that Spamhaus was a
foreign non-profit organization. (A. 2, 24-33). Thus, the district court knew that
service of process and personal jurisdiction was disputed and at issue in the
case. It is also clear that e360 failed to submit anything into the record before
the district court to show that service had been properly effected — a
prerequisite to a district court asserting personal jurisdiction.
4 Spamhaus recognizes that this is not the proper forum to present new
evidence. However, as noted earlier, Spamhaus disputes whether Tony
Overington represented that he was authorized to accept service, and upon
vacating of the default judgment and remand, Spamhaus plans to refute e360’s
claims. The opportunity to fairly litigate the issue of service of process (as well
as personal jurisdiction) is central to Spamhaus’ appeal from the district
court’s refusal to vacate the default judgment.
10
In fact, e360 admits that the original complaint was never served on
Spamhaus. (Resp. Br. 15). Tellingly, when the case was removed to the district
court, this original complaint that was admittedly never properly served on
Spamhaus was the only complaint that made it into the record. (A. 5-20). The
Amended Complaint was never placed before the district court and was also
never properly served on Spamhaus.
In this sense, Spamhaus’ case is similar to the prior decision of this Court
in Silva v. City of Madison, 69 F.3d 1368 (7th Cir. 1995). In Silva, the plaintiff
filed suit against the defendant in state court, but improperly served process of
the complaint upon a law firm that was not authorized to receive service of
process on the City’s behalf. Id. at 1370. When the City came into possession of
a copy of the complaint, it removed the case to federal court despite having
never been served properly. Id. When the City then failed to answer the
complaint, plaintiff filed a motion for default judgment which was denied by the
trial court. Plaintiff subsequently properly served the defendant with his
complaint and lost on the merits. Id. On appeal to this Court, plaintiff argued
that the City’s failure to answer the complaint within the time prescribed by
Fed. R. Civ. P. 81(c) constituted a failure to plead or otherwise defend the case
as required by Rule 55(a), and thus the district court erred in denying his
motion for default judgment. Id. at 1370-71.
On appeal, this Court held that under Rule 81(c), the duty to respond to
plaintiff’s complaint did not attach onto the City until it had been properly
11
served, since proper service was required for personal jurisdiction; as this
Court noted:
[W]e perceive nothing in the statute, the rule, or their
respective legislative histories that would justify our
concluding that the drafters, in their quest for
evenhandedness and promptness in the removal
process, intended to abrogate the necessity for
something as fundamental as service of
process….Requiring a responsive pleading before
service is effected is at odds with a fundamental
principle of federal procedure — that a responsive
pleading is required only after service has been
effected and the party has been made subject to the
jurisdiction of the federal courts….Without service,
there is no personal jurisdiction over the defendant.
This right is not waived by filing a petition for removal
to federal court…. Only a court that has jurisdiction
over the defendant may require that the defendant
state its substantive position in the litigation.
Id. at 1376. In other words, without a finding that a defendant has been
properly served, a district court can not enter a default judgment.
The parallels to Spamhaus’ situation are readily apparent. Spamhaus, like
the City in Silva, contended that it was never properly served with process in
the suit and therefore not within the personal jurisdiction of the court, but
nonetheless chose to file a Notice of Removal of the state case to federal district
court. (A. 2). Similar to the City, Spamhaus obtained a copy of e360’s
complaint without proper service and chose to remove based on this
document — this accounts for the glaring fact that Spamhaus’ Notice of
Removal attaches e360’s original Complaint, and not the Amended Complaint,
despite the fact that Spamhaus removed the case nearly a month after e360
12
filed its Amended Complaint.5 (A. 5-20; SA. 1-17). Finally, having removed the
case but lacking proper service of process and personal jurisdiction, both
Spamhaus and the City chose the same legitimate legal tactic, and refused to
file a responsive pleading until service of process had been perfected.
Where Silva and the present case differ, however, is the response of the
district court to plaintiffs’ request for a default judgment. In Silva, the district
court inquired into service of process and personal jurisdiction before making a
decision on granting default judgment. Silva, 69 F.3d at 1377. Finding service
of process and personal jurisdiction lacking, the district court refused to order
a default judgment since the City was under no obligation to answer (and thus
could not have defaulted) until it was properly served. Id. (“Here, the City had a
legitimate basis for not filing a responsive pleading: it had not been served”). By
contrast, in Spamhaus’ case the district court never inquired into whether
service had been effected upon Spamhaus before entering its default judgment,
nor whether it had personal jurisdiction over Spamhaus, even though it was
obvious that these were issues because Spamhaus was based in the United
Kingdom. (A. 159-69). Furthermore, even if the district court had attempted to
review whether service of process had been effected upon Spamhaus, the
inquiry would have been futile because there was nothing in the district court’s
record to support an inference that service of process had been perfected.
5 This also demonstrates a strong probability that Spamhaus never
received proper service (or, indeed, any service) of e360’s Amended Complaint;
if Spamhaus had received the Amended Complaint, it presumably would have
been attached to the Notice of Removal.
13
As this Court held in Silva, absent a finding of proper service of process, a
district court lacks the jurisdiction over the defendant necessary to require a
responsive pleading, and thus lacks the authority to impose a default
judgment. Silva, 69 F.3d at 1376-77. The district court failed to make that
inquiry here, and further lacked any evidence in the record on which to base
such a determination. The default judgment should therefore be vacated as
void for lack of proper service or personal jurisdiction.
III. The Entry of Default Judgment Must Be Vacated Because the District
Court Failed to Properly Apply the Traditional Test for Injunctive Relief
and Federal Rule of Civil Procedure 65, and Entered an Injunction that
Violates the First Amendment.
A. The District Court Failed to Apply the Traditional Four-Factor Test
for Injunctive Relief and Rule 65, and Therefore Improperly
Entered a Preliminary and Permanent Injunction.
e360 argues that the Illinois court properly considered the four-factor test
prior to entering the Temporary Restraining Order. (Resp. Br. 21-22). This
argument is completely unsupported by the district court record, and
conveniently ignores the fact that the state court record was never before the
district court. The district court therefore had no basis for entering an
injunction based in any part on the propriety of the state court’s TRO
determination.
In addition to demonstrating a likelihood of success on the merits, a plaintiff
seeking a permanent injunction must prove: (1) it has suffered irreparable
injury; (2) any remedies available at law are inadequate to compensate for the
injury; (3) when considering the balance of hardships between the plaintiff and
defendant, a remedy in equity is warranted; and (4) the public interest would
14
be served by the issuance of the permanent injunction. Ebay Inc. v.
Mercexchange, LLC, 126 S. Ct. 1837, 1839 (2006). e360 contends that the state
court’s determination was sufficient to justify conversion of the Temporary
Restraining Order into a preliminary and then permanent injunction. (Resp. Br.
21-26). But, there was no record of the state court’s proceedings before the
district court when either the preliminary or permanent injunction was
entered, and the district court never considered these four factors.
In fact, when considering the preliminary injunction, the district court noted
that in federal court a Temporary Restraining Order has a limited life of ten
days. Nonetheless, without any state court record, the district court never
bothered to consider why the state court had allowed a Temporary Restraining
Order to remain in effect without a limited life, or whether that procedure was
proper under Illinois law. (A. 162-163). The record demonstrates that the state
court entered the TRO on July 20, 2006 (A. 21-23), but the hearing before the
district court where the TRO was adopted as a preliminary injunction was on
August 23, 2006. (A. 117). Thus, the district court adopted a TRO that had run
more than three times the amount of time allowed under the Federal Rules
without looking into the traditional four-factor test or determining whether the
TRO was properly entered by the state circuit court in the first instance. e360
admits that the district court must exercise its discretion in entering injunctive
relief by using the four-factor framework. (Resp. Br. 23). There is nothing in the
record, either oral or written, that shows the district court actually considered
the four-factor test prior to entering the preliminary injunction. The entry of
15
the preliminary injunction (and later, the permanent injunction) was therefore
an abuse of the district court’s discretion.
Furthermore, it is clear from the plain language of Fed. R. Civ. P. 65(b) that
the district court abused its discretion in converting the TRO entered by the
state court into a preliminary injunction without conducting a hearing. As this
Court has held, injunctions that fail to adequately explain their reasons for
issuance should be vacated, since “[a]n injunction so poorly buttressed by
explanation flunks Fed. R. Civ. P. 65(d).” EEOC v. Severn Trent Serv., Inc., 358
F.3d 438, 442, 446 (7th Cir. 2004). At the time the preliminary injunction was
entered by the district court: (i) Spamhaus’ counsel had been permitted to
withdraw by the district court and without objection by e360 (A. 159-66); (ii)
Spamhaus had filed no responsive pleadings because it had not been properly
served with process and was therefore not required to file an Answer under
Rule 81(c); (iii) the district court had never found it had proper jurisdiction or
that service had been properly effected upon Spamhaus; and (iv) the district
court was without any record from the state court regarding the propriety of
entering the Temporary Restraining Order. Indeed, mere moments before
entering the Temporary Restraining Order, the district court asked, “What is
this case about?” (A. 161). Despite the lack of any presentation of evidence, the
district court then summarily entered a preliminary injunction without
requiring e360 to post any security as required in Fed. R. Civ. P. 65(c). (A. 162-
165). If the “specificity provisions of Rule 65(d) are no mere technical
requirements,” Atiyeh v. Capps, 449 U.S. 1312, 1317 (1981), then the district
16
court abused its discretion by making no inquiry into and no findings
regarding the rationale for imposing the preliminary injunction.
e360 contends that Spamhaus incorrectly asserts that the district court did
not have evidence before it about any irreparable injury, inadequate remedy at
law, balance of hardships, or public interest considerations. (Resp. Br. 24.)
Spamhaus, however, stands by its assertion that e360’s motion for permanent
injunction (1) failed to cite any authority regarding the requirements for entry
of an injunction, (2) failed to list the inquiry the district court should
undertake, and (3) failed to allege any irreparable injury, inadequate remedies
at law, why equitable relief is warranted after balancing the hardships of the
plaintiff and defendant, and that public interest would not be disserved by the
issuance of an injunction. (A. 118-23). e360 fails to cite any point in the record
where it made any such showing to the district court.
e360 further argues that any issues regarding the injunction should have
been brought before the district court. (Resp. Br. 28-29.) In fact, those issues
were raised before the district court in Spamhaus’ Motion to Vacate the Default
Judgment and the Motion to Stay Enforcement of the Judgment that were filed
on October 26, 2006. (A. 150-157). The district court’s failure to consider these
arguments and its summary dismissal of Spamhaus’ motions are indeed
properly before this Court today. This failure constitutes an abuse of the
district court’s discretion and grounds to reverse.
Finally, e360 argues that Spamhaus “quibbles with certain immaterial
aspects of the terms of the injunction.” (Resp. Br. 28). While it is unclear what
17
part of the injunction e360 deems “immaterial,” Spamhaus’ arguments against
the injunction are based on traditional federal law, the Federal Rules of Civil
Procedure, and most importantly, the Constitution of the United States.
Spamhaus does not find these challenges to be “quibbles with certain
immaterial aspects of the terms of the injunction.” For failing to follow the
common law four-part test regarding injunctive relief and Rule 65, the district
court’s injunction should be vacated.
B. The Permanent Injunction Entered by the District Court Violates
the First Amendment.
1. Spamhaus’ opinion regarding spam is protected speech
under the First Amendment.
e360 argues that Spamhaus’ SBL and ROKSO list are conduct, rather than
speech, and thus not afforded protection under the First Amendment. (Resp.
Br. 29-30). In this assertion, e360 again relies on information not properly
before the Court. e360 attempts to argue that because Spamhaus sells the SBL
and ROKSO list (a fact that has never been established and is false),6 its
opinions somehow became conduct rather than speech. Id. However, the
Supreme Court has held that dissemination of literature informing the public
of discriminatory real estate practices was protected under the First
Amendment, and the injunction prohibiting this dissemination was held to be
an unconstitutional prior restraint. Organization for a Better Austin v. Keefe,
6 e360 cites to SA. 415-19 to argue that Spamhaus Project sells its lists.
(Resp. Br. 29). However, those documents are not a part of the record on
appeal. Furthermore, the documents are invoices from Spamhaus Technology
Ltd, not Spamhaus Project. As counsel for e360 has been assured, Spamhaus
Technology is a separate legal entity from the Spamhaus Project. Thus, this
evidence does not prove that Spamhaus Project sells its lists.
18
402 U.S. 415, 417 (1971). As in Keefe, Spamhaus’ dissemination of information
and opinions informing the public of negative spamming practices constitutes
protected speech.
Rather than address Spamhaus’ First Amendment contentions, e360
instead attempts to challenge the accuracy of Spamhaus’ decision to place
e360 and Mr. Linhardt on these lists, and complains that Spamhaus should
not enjoy First Amendment protections “when it conducts itself badly.” (Resp.
Br. 30.) These complaints have no basis in First Amendment jurisprudence;
indeed, many cases involving First Amendment protections involve the
expression of distasteful or “bad” ideas. See Cohen v. California, 403 U.S. 15
(1971) (overruling petitioner’s conviction for disturbing the peace after finding
that wearing a jacket with obscenity in a courthouse was protected speech);
R.A.V. v. St. Paul, 505 U.S. 377 (1992) (vacating conviction for burning cross in
yard of an African-American family under ordinance prohibiting the display of a
symbol that “arouses anger, alarm, or resentment in others on the basis of
race, color, creed, religion or gender” because it constituted an impermissible
content-based restriction).
The law is clear that opinions remain protected regardless whether others
do not agree with it, and may not be subjected to a prior restraint so long as
the means of communication are peaceful. See Keefe, 402 U.S. at 419
(overturning an injunction prohibiting leaflet distributors who were engaged “in
making the public aware of practices they believed were wrong”); Alexander v.
United States, 509 U.S. 544, 550 (1993) (a permanent injunction is a classic
19
prior restraint, even if it is imposed after a finding of liability). Indeed, the
unpopular or bothersome nature of the content of the message to its recipients
(or those that it identifies or mentions) does not remove the message from the
reach of the First Amendment. See Keefe, 402 U.S. at 415. e360’s response
conveys that it does not agree with Spamhaus’ message and believes the
message. But, even bothersome or unpopular expressions may not be
subjected to a prior restraint. Spamhaus’ expression of opinions through its
ROKSO and SBL lists is protected and can not be subject to the injunction.
2. The Injunction impermissibly compels speech.
e360 argues that requiring Spamhaus to publish a message expressing an
opinion in the shape of a 1 inch by 1 inch square containing the assertion that
e360 is not a “spammer,” and was “erroneously listed on the website as” a
“spammer” (A. 141) is “essentially a retraction.” (Resp. Br. 32.) But, this is not
merely a “retraction.” A retraction would require removing information from
the website and possibly saying that it was posted in error. In contrast, this
injunction requires Spamhaus to place a message on its website affirmatively
opining that e360 is not a “spammer” continuing into the future. Spamhaus
wholeheartedly disagrees with that opinion and has a factual basis for its
views. Forcing Spamhaus to express an opinion it categorically disagrees with
violates the First Amendment, which embodies the principle that “‘each person
should decide for himself or herself the ideas and beliefs deserving of
expression, consideration, and adherence.’” Entm’t Software Assoc. v.
Blagojevich, 404 F. Supp. 2d 1051, 1071 (N.D. Ill. 2005) (quoting Turner Broad.
20
Sys. v. FCC, 512 U.S. 622, 641 (1994)). Moreover, the opinion that is required
would cover conduct by e360 after the acts at issue in the Complaint and
essentially give e360 a “seal of approval” even if its future conduct constitutes
“spamming” under any definition.
While e360 discusses the “commercial arena” (Resp. Br. 33), Spamhaus’
activity is not commercial speech because it does not propose a commercial
transaction. See Va. State Bd. of Pharmacy v. Va. Citizens Consumer Council,
Inc., 425 U.S. 748, 771 (1976). Nor is the information that the district court
ordered Spamhaus to place on its website purely factual and uncontroversial —
it is instead contrary to Spamhaus’ learned opinion that e360’s email policies,
in Spamhaus’ view, constitute “spamming,” and touch upon the controversial
topic of spam on the Internet today. Because there is no universally accepted
definition of what constitutes “spamming,” whether or not someone is a
“spammer” is necessarily a matter of opinion on which people may disagree
without fear of sanctions. Further, there is no interest in preventing deception
of consumers in this situation because Spamhaus does not sell its lists, nor do
the lists advocate any commercial transaction or conduct. Instead, Spamhaus’
opinion is one of many available on the Internet regarding which email IP
addresses and companies engage in the improper and often illegal transmission
of unsolicited bulk email. It neither compels nor encourages a commercial
transaction, but rather offers its views as to whether ISPs and individual email
users should accept or reject email from these addresses so as to avoid
unsolicited commercial materials. In this sense, Spamhaus’ ROKSO and SBL
21
lists are akin to the Fodors Restaurant Guide: the ROKSO and SBL list do not
advocate or entice consumers into a particular commercial transaction but
rather state an opinion based on Spamhaus’ own criteria and research as to
what email messages it considers worth accepting or rejecting. Just as this
Court would never order Fodors to state that a restaurant Fodors’ believed
unappealing was actually “fabulous,” this Court should not order Spamhaus to
publish on its website an opinion that Spamhaus strongly disagrees with —
namely, that e360 is not a “spammer.”
In sum, the injunction impermissibly compels the expression of views in a
manner that contravenes basic First Amendment principles.
3. The Injunction is Impermissibly Broad.
e360 suggests that the issue of the injunction’s impermissible breadth is not
“ripe as the language of the retraction message has not yet been determined.”
(Resp. Br. 33.) Spamhaus, however, challenges the injunction as a whole, and
not merely the compelled message that e360 is not a spammer. Spamhaus
contends that the language of the injunction is overbroad because it fails to
specify which businesses owned or controlled by e360 are covered under the
injunction, or designate who constitutes a “customer or supplier” of e360. (Br.
41-42, 47.) Spamhaus also contends that the injunction’s legal standard of
“clear and convincing” evidence to prove emails were actually spam is
inconsistent with federal law, making the injunction confusing and unclear.
(Br. 41.) Finally, Spamhaus believes that the lack of clarity in the permanent
injunction threatens to place the district court in the role of perpetual censor,
22
constantly being called upon to determine what speech is allowed and what is
prohibited. (Br. 47.) e360 simply fails to address these issues.
IV. The District Court Erred in Denying Spamhaus’ Federal Rule of Civil
Procedure 60(b) Motion to Vacate the Default Judgment.
e360 focuses on the district court’s denial of Spamhaus’ Rule 60(b)(1)
motion, arguing that it does not protect Spamhaus’ intentional choices. (Resp.
Br. 35-37). Spamhaus, however, did not raise this Rule 60(b)(1) argument in its
appeal. (Br. 48-52). Instead, Spamhaus argues that the district court abused
its discretion by denying the Rule 60(b) motion without granting Spamhaus an
opportunity to fully brief the motion or present extrinsic evidence regarding the
service of process and personal-jurisdiction related defenses. Id. at 48. e360
misconstrues this argument and asserts that Spamhaus had many
opportunities to contest jurisdiction and service of process. (Resp. Br. 36.)
However, e360 does not dispute that the district court summarily refused to
vacate the default judgment and failed to provide Spamhaus with any
opportunity to present evidence.
While e360 argues that additional briefing would not have served any useful
purpose, (Resp. Br. 37), “a defendant is entitled to one fair opportunity to
litigate issues of fact and law essential to a court’s exercise of personal
jurisdiction over that defendant,” and inherent in this opportunity is the right
to present evidence on fundamental jurisdictional questions. Bd. of Trustees v.
Elite Erectors, Inc., 64 F. Supp. 2d 839, 843, 845 (S.D. Ind. 1999). The question
is not whether additional briefing would have had any “discernable effect,” but
rather whether the district court abused its discretion by not giving Spamhaus
23
any opportunity to present evidence on these jurisdictional issues. Had the
district court properly allowed Spamhaus to present evidence regarding its
jurisdiction related defenses, it would have become clear that the district court
erred in entering the default judgment and permanent injunction in this case,
as Spamhaus has indeed demonstrated in its appeal.
e360 further asserts that the district court had no obligation to affirmatively
determine whether service of process was proper or whether it had jurisdiction
over Spamhaus because Spamhaus submitted itself to the court’s jurisdiction.
(Resp. Br. 38.) But, Spamhaus never waived or forfeited its objections to service
of process and personal jurisdiction. Furthermore, when Spamhaus attempted
to “shoulder the burden of proof” in contesting jurisdiction, the district court
simply denied the motion without any proper consideration of the crucial
issues raised. This refusal to permit Spamhaus an opportunity to present
extrinsic evidence on these issues was an abuse of discretion, and grounds to
reverse.
In addition, e360 argues that Rule 60(b)(6) also provided Spamhaus with no
relief, claiming that its Amended Complaint adequately stated a claim. Id.
However, e360 fails to confront Spamhaus’ argument that the Communications
Decency Act, 47 U.S.C. § 230 et seq. (1996), and the Controlling the Assault of
Non-Solicited Pornography and Marketings (CAN-SPAM) Act of 2003, 15 U.S.C.
§ 7701-7713 (2003), immunize it from liability related to the blocking of
selected email transmissions. (Br. 34-35.)
24
Finally, e360 argues that a hearing on damages was unnecessary. (Resp. Br.
40.) This argument by e360, however, ignores the issues raised by Spamhaus,
and e360 failed to cite any precedent in support of its bald assertions. The
record remains unclear whether the district court actually considered the
“evidence” submitted by e360 prior to entering the damages amount. Damages
on a default judgment that are not liquidated, as here, may not be entered
without an evidentiary hearing. Dundee Cement Co. v. Howard Pipe & Concrete
Prods., Inc., 722 F.2d 1319, 1323 (7th Cir. 1983). The damages claimed by
e360 were based entirely on the legally insuffiicient affidavit of David Linhardt,
which consisted entirely of unsupported opinion, speculation, unqualified
expert opinion, and factual assertions not supported by any documentary
evidence. See, e.g., Eden v. Klaas, 165 Neb. 323, 328 (Neb. 1957) (statements
in affidavits about opinion, belief, or conclusions of law are to be given no
effect); Johnson v. Nordstrom, Inc., 260 F.3d 727, 736 (7th Cir. 2001) (affidavits
must be based on personal knowledge, set forth facts that would be admissible
in evidence, and show affirmatively that the affiant is a competent witness on
those matters).
e360’s only response to these issues raised by Spamhaus is one paragraph
that conclusorily asserts that the damages were supported by Mr. Linhardt’s
affidavit and that Spamhaus “cryptically concludes that this was not good
enough although it is entirely unclear what additional information Spamhaus
would conclude is sufficient.” (Resp. Br. 40.) Spamhaus did not “cryptically
conclude” anything related to damages, but rather carefully discussed the
25
requirements for an affidavit under the Federal Rules. Just like the affidavit
used by e360 to attempt to establish its damages award, e360’s argument here
is conclusory and not supported by any evidence or precedent.
CONCLUSION
For the reasons set forth above, Defendant-Appellant The Spamhaus Project
respectfully requests this court reverse the district court’s default judgment
order in favor of Plaintiff-Appellee e360 Insight, LLC. Alternatively, Defendant-
Appellant The Spamhaus Project respectfully requests this court reverse the
district court’s denial of Defendant-Appellant’s Motion to Vacate the Default
Judgment and For Leave to File a Memorandum In Support, and remand the
Motion to the district court for briefing and proceedings regarding whether
service of process was effected and whether the district court has personal
jurisdiction over Defendant-Appellant The Spamhaus Project.
DATED: This 6th day of April, 2007.
Respectfully submitted,
THE SPAMHAUS PROJECT
By: ____________________________
One of Its Attorneys
Matthew M. Neumeier
Craig C. Martin
Carrie A. Fino
330 NORTH WABASH AVENUE
One IBM Plaza
Chicago, IL 60611
(312) 222-9350
26
CERTIFICATE OF COMPLIANCE WITH TYPE-VOLUME LIMITATION,
TYPEFACE REQUIREMENTS AND TYPE-STYLE REQUIREMENTS
1. This reply brief complies with the type-volume requirements of Fed. R.
App. P. 32(a)(7)(B) because this brief contains 6,676 words excluding the parts
of the brief exempted by Fed. R. App. P. 32(a)(7)(B)iii.
2. This brief complies with the typeface requirements of Fed. R. App. P.
32(a)(5) and the type style requirements of Fed. R. App. P. 32(a)(6) because this
brief has been prepared in a proportionally spaced typeface using Microsoft
Office Word 2003 in Bookman Old Style 12 font.
____________________________________
Matthew M. Neumeier
Dated: April 6, 2007
27
CERTIFICATE OF COMPLIANCE WITH CIRCUIT RULE 31(e)
The undersigned, one of the attorneys for Defendant-Appellant, hereby
certifies that, pursuant to Circuit Rule 31(e), I have filed electronically versions
of the reply brief, and I hereby verify that the same is virus free.
____________________________________
Matthew M. Neumeier
Dated: April 6, 2007
28
CERTIFICATE OF SERVICE
I, Matthew M. Neumeier, an attorney, hereby certify that I served: (1) two
copies of the foregoing Reply Brief of Defendant-Appellant The Spamhaus
Project; and (2) a CD containing the Reply Brief of Defendant-Appellant The
Spamhaus Project in a searchable PDF format upon:
Joseph L. Kish
Kristen M. Lehner
Bartly Joseph Loethen
Synergy Law Group, L.L.C.
730 West Randolph Street
6th Floor
Chicago, IL 60661
Phone: (312) 454-0015
Fax: (312) 454-0261
by UPS Next Day Air, on this 6th day of April 2007.
____________________________________
Matthew M. Neumeier
1521540.5
e360Insight Appellee Brief
Nos. 06-3779 and 06-4169
_________________________________________
UNITED STATES COURT OF APPEALS
FOR THE SEVENTH CIRCUIT
_________________________________________
e360INSIGHT, LLC, an Illinois
Limited Liability Company, and
DAVID LINHARDT, an individual,
Plaintiffs – Appellees.
vs.
THE SPAMHAUS PROJECT, a
company limited by guarantee and
organized under the laws of England,
a/k/a THE SPAMHAUS PROJECT, LTD.,
Defendant – Appellant,
________________________________________
Appeal from the United States District Court
For the Northern District of Illinois
District Court No. 06 C 3958
The Honorable Judge Charles P. Kocoras, District Judge
_________________________________________
RESPONSE TO BRIEF OF DEFENDANT - APPELLANT,
e360INSIGHT, LLC AND DAVID LINHARDT
__________________________________________
Bartly J. Loethen
Joseph L. Kish
Synergy Law Group, LLC
730 W. Randolph Street Suite
600
Chicago, Illinois 60661
Telephone: 312-454-0015
Facsimile: 312-454-0261
__________________________________________
ORAL ARGUMENT REQUESTED
CIRCUIT RULE 26.1 DISCLOSURE STATEMENT
Appellate Court No:
Short Caption:
To enable the judges to determine whether recusal is necessary or appropriate, an attorney for a non-governmental party
or amicus curiae, or a private attorney representing a government party, must furnish a disclosure statement providing the
following information in compliance with Circuit Rule 26.1 and Fed. R. App. P. 26.1.
The Court prefers that the disclosure statement be filed immediately following docketing; but, the disclosure statement
must be filed within 21 days of docketing or upon the filing of a motion, response, petition, or answer in this court,
whichever occurs first. Attorneys are required to file an amended statement to reflect any material changes in the required
information. The text of the statement must also be included in front of the table of contents of the party's main brief.
Counsel is required to complete the entire statement and to use N/A for any information that is not applicable if this
form is used.
(1) The full name of every party that the attorney represents in the case (if the party is a corporation, you must provide
the corporate disclosure information required by Fed. R. App. P 26.1 by completing item #3):
(2) The names of all law firms whose partners or associates have appeared for the party in the case (including proceedings
in the district court or before an administrative agency) or are expected to appear for the party in this court:
(3) If the party or amicus is a corporation:
i) Identify all its parent corporations, if any; and
ii) list any publicly held company that owns 10% or more of the party’s or amicus’ stock:
Attorney's Signature: Date:
Attorney's Printed Name:
Please indicate if you are Counsel of Record for the above listed parties pursuant to Circuit Rule 3(d). Yes No
Address:
Phone Number: Fax Number:
E-Mail Address:
rev. 11/01 AK
06-3779
e360 Insight, LLC et. al v. The Spamhaus Project
e360 Insight, LLC
David Linhardt
Synergy Law Group, LLC
12-11-06
Bartly J. Loethen
730 W. Randolph, 6th Floor
Chicago, IL 60661
312-454-0015 312-454-0261
bart@synergylawgroup.com
REFRESH
CIRCUIT RULE 26.1 DISCLOSURE STATEMENT
Appellate Court No:
Short Caption:
To enable the judges to determine whether recusal is necessary or appropriate, an attorney for a non-governmental party
or amicus curiae, or a private attorney representing a government party, must furnish a disclosure statement providing the
following information in compliance with Circuit Rule 26.1 and Fed. R. App. P. 26.1.
The Court prefers that the disclosure statement be filed immediately following docketing; but, the disclosure statement
must be filed within 21 days of docketing or upon the filing of a motion, response, petition, or answer in this court,
whichever occurs first. Attorneys are required to file an amended statement to reflect any material changes in the required
information. The text of the statement must also be included in front of the table of contents of the party's main brief.
Counsel is required to complete the entire statement and to use N/A for any information that is not applicable if this
form is used.
(1) The full name of every party that the attorney represents in the case (if the party is a corporation, you must provide
the corporate disclosure information required by Fed. R. App. P 26.1 by completing item #3):
(2) The names of all law firms whose partners or associates have appeared for the party in the case (including proceedings
in the district court or before an administrative agency) or are expected to appear for the party in this court:
(3) If the party or amicus is a corporation:
i) Identify all its parent corporations, if any; and
ii) list any publicly held company that owns 10% or more of the party’s or amicus’ stock:
Attorney's Signature: Date:
Attorney's Printed Name:
Please indicate if you are Counsel of Record for the above listed parties pursuant to Circuit Rule 3(d). Yes No
Address:
Phone Number: Fax Number:
E-Mail Address:
rev. 11/01 AK
06-3779
e360 Insight, LLC et. al v. The Spamhaus Project
e360 Insight, LLC
David Linhardt
Synergy Law Group, LLC
12-11-06
Bartly J. Loethen
730 W. Randolph, 6th Floor
Chicago, IL 60661
312-454-0015 312-454-0261
bart@synergylawgroup.com
REFRESH
TABLE OF CONTENTS
TABLE OF CONTENTS................................................................................................. i
TABLE OF AUTHORITIES .........................................................................................iii
STATEMENT OF CASE................................................................................................ 2
STATEMENT OF FACTS ............................................................................................. 5
SUMMARY OF ARGUMENT ..................................................................................... 10
STANDARD OF REVIEW........................................................................................... 12
ARGUMENT................................................................................................................ 12
I. SPAMHAUS WAIVED DEFENSES OF INSUFFICIENCY OF PROCESS
AND LACK OF PERSONAL JURISDICTION................................................ 13
II. SERVICE OF PROCESS ON SPAMHAUS WAS PROPER............................ 15
A. The Amended Complaint Was Served In Accordance with the Illinois
Code of Civil Procedure and the Hague Convention............................... 15
B. The District Court Properly Considered Service of Process on
Spamhaus Before Entering the Default Judgment and Permanent
Injunction.................................................................................................. 17
III. THE DISTRICT COURT PROPERLY EXERCISED PERSONAL
JURISDICTION OVER SPAMHAUS.............................................................. 18
A. e360’s Complaint Adequately Alleged Personal Jurisdiction................ 18
B. Spamhaus Waived Lack of Personal Jurisdiction as a Defense ............ 19
IV. THE INJUNCTIONS AGAINST SPAMHAUS ARE APPROPRIATE AND
CONSTITUIONAL............................................................................................ 21
A. The Injunctions Issued Against Spamhaus Are Appropriate................ 21
1. The District Court Properly Adopted the Temporary Restraining
Order as Its Preliminary Injunction.................................................... 21
i
2. The District Court Properly Entered the Permanent Injunctions
According to Federal Rule of Civil Procedure 65. ............................... 26
B. The Permanent Injunction Against Spamhaus is Constitutional ......... 29
1. The Activity Enjoined By The District Court Is Not Protected Speech
But Conduct .......................................................................................... 29
2. Spamhaus Does Not Engage in Protected Speech Because Its
Statements Involving e360 are False .................................................. 31
3. The Injunction Does Not Constitute Impermissible Compelled Speech
............................................................................................................... 32
4. The Injunction Is Not Impermissibly Broad ....................................... 33
V. THE DISTRICT COURT DID NOT ABUSE ITS DISCRETION IN DENYING
SPAMHAUS’ MOTION TO VACATE THE DEFAULT JUDGMENT............ 34
A. Rule 60(b)(1) Does Not Provide Relief for Spamhaus; There Is No
Excusable Neglect, Inadvertence, and/or Mistake Exists.................. 35
B. Rule 60(b)(4) Does Not Provide Relief To Spamhaus; The Judgment Is
Not Void.................................................................................................................... 37
C. Rule 60(b)(6) Also Provides No Relief to Spamhaus ............................... 39
CONCLUSION............................................................................................................. 41
CERTIFICATE OF COMPLIANCE WITH F.R.A.P. RULE 32(a)(7) AND CIRCUIT
RULE 31(e)(1) CERTIFICATION .................................................................... 42
CERTIFICATE OF SERVICE .................................................................................... 43
ii
TABLE OF AUTHORITIES
Cases
American Hospital Association v. Harris, 625 F.2d 1328
(7th Cir. 1980).............................................................................................................. 22
Amoco v. Village of Gambell, 480 U.S. 531 (1987) .....................................................26
Bally Export Corp. v. Balicar, Ltd., 804 F.2d 398, 402 (7th Cir. 1986) ......... 18, 34, 38
Banks v. Trainor, 525 F.2d 837, 841 (7th Cir. 1975), cert. denied,
424 U.S. 978, 47 L. Ed. 2d 748, 96 S. Ct. 1484 (1976)................................................21
Broadcast Music, Inc. v. M.T.S. Enterprises, Inc., 811 F.2d 278, 281
(5th Cir. 1987)........................................................................................................ 12, 13
EEOC v. Severn Trent Serv., Inc., 358 F.3d 438, 442 (7th Cir. 2004)........................ 26
Faheem-El v. Klincar, 841 F.2d 712, 716 (7th Cir. 1988) .......................................... 24
Gertz v. Robert Welch, Inc., 418 U.S. 323, 338 (1974) ............................................... 31
Giannakos v. M/V BRAVO TRADER, 762 F.2d 1295, 1298 (5th Cir. 1985)............. 13
Helene Curtis Industries v. Church & Dwight Co., 560 F.2d 1325, 1330
(7th Cir. 1977).............................................................................................................. 23
Hustler Magazine v. Falwell, 485 U.S. 46, 51 (1988)................................................. 31
Ideal Industries v. Gardner Bender, Inc., 612 F.2d 1018, 1022 (7th Cir. 1979),
cert. denied, 447 U.S. 924, 65 L. Ed. 2d 1116, 100 S. Ct. 3016 (1980) ...................... 22
Johnson v. Zerbst, 304 U. S. 458, 464, 58 S. Ct. 1019, 1023, 82 L. Ed. 1461
(1938)........................................................................................................................... 20
Jones v. Jones, 217 F.2d 239, 242 ............................................................................... 39
Madsen v. Women's Health Ctr., 512 U.S. 753 (U.S. 1994).......................................33
Marcial Ucin, S.A. v SS Galicia, 723 F.2d 994, 996-97 (1st Cir. 1983).......................12
N.L.R.B. v. Electro-Voice, Inc., 83 F.3d 1559, 1567 (7th Cir. 1996) .................... 22, 24
New York Times Co. v. Sullivan, 376 U.S. 254, 265 (1964) ................................. 26, 29
iii
O'Conner v. Board of Education, 645 F.2d 578, 580 (7th Cir.), cert. denied,
454 U.S. 1084, 70 L. Ed. 2d 619, 102 S. Ct. 641 (1981).............................................. 22
Reynolds v.. International Amateur Athletic Fed’n, 23 F.3d 1110, 1120
(6th Cir. 1994).............................................................................................................. 17
Rice v. Nova Biomedical Corp., 38 F.3d 909, 914 (7th Cir. 1994).............................. 17
Rumsfeld v. Forum for Academic & Institutional Rights, Inc., 547 U.S. 47
(U.S. 2006)....................................................................................................................30
Swaim v. Moltan Company, 73 F. 3d 711, 717 (7th Cir. 1996) ................................. 20
Trustees of Central Laborers’ Welfare Fund, v. Keith and Dennis Lowery,
924 F.2d 731, 732 (7th Cir. 1991)............................................................... 12, 35, 38, 39
Vilchis v. Miami Univ. of Ohio, 99 Fed. Appx. 743 (7th Cir. 2004) ........................... 16
Wesley-Jessen Div. of Schering Corp. v. Bausch & Lomb, Inc., 698 F.2d
862, 864 (7th Cir. 1983) ................................................................................... 19, 20, 22
White v. Ratcliffe, 285 Ill.App.3d 758, 765 ........................................................... 11, 14
Yakus v. United States, 321 U. S. 414, 444,64 S. Ct. 660, 677, 88 L. Ed.
834 (1994)........................................................................................................ 18, 20, 26
Statutes
28 U.S.C. § 1291............................................................................................................. 2
735 ILCS 5/2-209 (2007) ............................................................................................... 2
Controlling the Assault of Non-Solicited Pornography and
Marketings (CAN-SPAM) Act 2003, 15 U.S.C. §§ 7701-7713...................................... 5
Hague Convention on the Service Abroad of Judicial and Extrajudicial
Documents in Civil or Commercial Matters ("Hague Convention"),
Nov. 15, 1965, 20 U.S.T. 361, 658
U.N.T.S.16328……………………………………………………………….……….11, 15, 16
iv
Rules
Fed. R. App. P. 8 .................................................................................................... 28, 40
Fed.R.Civ.P. 12(h)(1) ............................................................................................. 11, 26
Fed. R. Civ. P. 60(b) .............................................................................................passim
Fed.R.Civ.P. 62 ............................................................................................................ 28
Fed.R.Civ.P. 65 ...................................................................................................... 26, 28
v
JURISDICTIONAL STATEMENT
Appellant’s jurisdictional statement is incorrect and should be stated to read as follows.
Plaintiffs-Appellees e360Insight, LLC (“e360”) and David Linhardt (“Mr. Linhardt”) filed their
lawsuit against Defendant-Appellant The Spamhaus Project, Ltd. (“Spamhaus”) on June 21, 2006 in
the Circuit Court of Cook County, Illinois County Department, Chancery Division (A. 5-20.) e360
and Mr. Linhardt learned of additional facts supporting their claims against Spamhaus and filed an
Amended Complaint on June 23, 2006. (Supplemental Appendix (“SA.”) 001-019.) It is from this
Amended Complaint that this appeal is properly taken although for purposes of this appeal, the
documents are the same.
Spamhaus removed this case to the United States District Court for the Northern District of
Illinois, Eastern Division, on July 21, 2006. (A. 1-4.) Spamhaus’ removal occurred after the Circuit
Court entered a temporary restraining order against Spamhaus, which proceeding was properly
noticed but in which Spamhaus failed to participate.
Spamhaus’ removal is based on diversity of citizenship. Mr. Linhardt is a citizen of the State
of Illinois. (A. 2.) e360 is Illinois limited liability company located in wheeling, Illinois. (A. 6.)
e360’s sole member is Maverick Direct Marketing Solutions, Inc., an Illinois corporation with its
principal place of business in Wheeling, Illinois.
On September 13, 2006 the District Court entered an order for default judgment against
Spamhaus. (A. 140-143.) On October 13, 2006 Spamhaus filed a notice of appeal for the entry of
default judgment. (A. 144.) On October 31, 2006
the District Court denied Spamhaus’ Motion to Vacate the Default Judgment and
for Leave to File a Memorandum in Support. (A. 158.) On November 28, 2006
Spamhaus filed a notice of appeal from the denial of its Motion to Vacate. (A. 194.)
This Court has jurisdiction under 28 U.S.C. §1291.
STATEMENT OF ISSUES
e360 and Mr. Linhardt respectfully submit that the issues as presented by
Spamhaus are unduly argumentative and in certain respects without record
support. e360 and Mr. Linhardt have attempted to recast the issues presented by
Spamhaus in this appeal in a neutral yet informative manner, which is concise
without being vague or too general.
1. Did the District Court erred by entering a default judgment against
Spamhaus based on the information provided to the District Court by the parties to
this appeal either because of improper service of process on Spamhaus or because
the District Court lacked personal jurisdiction over Spamhaus?
2. Is the permanent injunction entered by the District Court constituted an
impermissible prior restraint?
3. Did the District Court erred by denying Spamhaus’ Motion to Vacate the
Default Judgment given the circumstances leading up to and the reasons stated at
the time of the Motion’s presentment to the District Court?
STATEMENT OF CASE
e360 filed suit against Spamhaus on June 21, 2006 in the Circuit Court of Cook
County, alleging state law claims for tortious interference with contract, tortious
2
interference with prospective economic advantage, defamation per se, and
defamation per quod. (A. 12-20.) The Complaint was amended two days later to
include newly discovered acts being perpetrated by Spamhaus. (SA. 001-019.) The
Amended Complaint was served by special process server, which complied with the
Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents.
On June 20, 2006 the Circuit Court, by the Honorable Phillip Bronstein,
entered a temporary restraining order and ordered expedited discovery against
Spamhaus after conducting a properly noticed hearing at which Spamhaus failed to
appear. (SA. 408-411.) Spamhaus complied with the terms of the TRO requiring
that references to e360 and Mr. Linhardt be removed from the ROKSO list. On
July 21, 2006 Spamhaus complied with the language of the temporary restraining
order; removed the case to the United States District Court for the Northern District
of Illinois, Eastern Division (A. 1-4) and filed an Answer to the Complaint. (A. 24-33.)
The Hinshaw Culbertson law firm filed appearances for two of their attorneys to
represent Spamhaus.
Spamhaus failed to respond to the expedited discovery propounded by e360
and Mr. Linhardt when such discovery was due on August 20, 2006. In addition to
failing to comply with the Circuit court’s discovery order, Spamhaus also posted
new references to e360 and Mr. Linhardt in violation of the temporary restraining
order. e360 and Mr. Linhardt filed Motions for Rules to Show Cause why
Spamhaus should not be sanctioned or held in contempt for its failure to abide by
the Circuit Court’s prior orders. (ECF Docket Entry ## 11 and 12) At the August
3
23, 2006 hearing on these motions, Spamhaus’ counsel announced that he was
authorized by Spamhaus to do two things only that day: Withdraw Spamhaus’
Answer and then withdraw his appearance. (A. 159-166.) e360 and Mr. Linhardt’s
motions for rules to show cause were not heard. Instead, the District Court granted
Spamhaus’ Motion to Withdraw the Appearances of Counsel (A. 117) and Motion for
Leave to Withdraw its Answer to the Complaint. (Id.) The District Court also granted
e360’s Motion for Entry of Default (Id.) and converted the Circuit Court’s
temporary restraining order into a preliminary injunction. (Id.)
On September 13, 2006 on motion from e360 and Mr. Linhardt, the District
Court entered an order for default judgment against Spamhaus, which did not
appear despite being properly notified of the proceedings. (SA. 413.) Spamhaus
filed its Notice of Appeal on October 13, 2006, which was docketed by the United
States Court of Appeals for the Seventh Circuit as Case No. 06-3779. (A. 144.) On
October 17, 2006 this Court entered an initial briefing schedule for this appeal, which
was revised on November 3, 2006 pursuant to Circuit Rule 33.
On October 26, 2006 Spamhaus filed a Motion to Vacate Default Judgment
and For Leave to File a Memorandum in Support under Federal Rule of Civil
Procedure 60(b). (A. 150-154.) The District Court denied the Motion to Vacate on
October 31, 2006. (A. 158.) Spamhaus filed its second Notice of Appeal from the
denial of the Motion to Vacate on November 28, 2006 (A. 194.) which was docketed by
this Court as Case No. 06-4169. On December 5, 2006 this Court consolidated Case
Nos. 06-3779 and 06-4 169.
4
STATEMENT OF FACTS
e360 and Mr. Linhardt are legitimate internet marketers who are and were,
at all times relevant to this lawsuit, engaged in legitimate email marketing activity
and were not engaged in any activity that could be deemed to be "spamming." (SA.
001-019.) In fact, e360 gains permission from the recipient of its email marketing
messages before sending them. e360 has no interest in sending spam or messages to
potential customers who do not wish to receive its messages. (SA. 003-004.)
Moreover, they have complied at all times with all laws pertaining to the sending of
e-mail and internet-based advertisement, including CAN-SPAM. (Id.) There is
nothing in the record before this Court that suggests otherwise despite Spamhaus’
assertions and inferences to the contrary.
Spamhaus holds itself out to be a United Kingdom non-profit limited liability
company located in London, United Kingdom (A. 6.) Contrary to representations
made on its website, Spamhaus, in fact, does not rely solely on donations to fund its
operations, but charges for its services. (SA. 415-419.) Spamhaus is not a citizen of
Illinois, but e360 and Mr. Linhardt alleged in their Complaint, and sought by way of
the discovery to which Spamhaus never responded, information that would confirm
that Spamhaus conducts business in Illinois by providing services to Internet Service
Providers (“ISPs”) in the State of Illinois, including United Online, Inc. (see
www.untd.com) and others. (A. 006.) Despite the information contained in the
Declaration of Steve Linford (A. 190-92.), the allegations contained in paragraph 4 of
the Complaint are not refuted.
5
Spamhaus generates the Register of Known Spam Operations (“ROKSO”) list
and the Spamhaus Block List (“SBL”), identifying individuals or entities that have
been terminated from ISPs three or more times for engaging in spam offenses.
(A.113-116.) At the time Spamhaus placed e360 and Mr. Linhardt on the ROSKO list,
they were not terminated from any ISPs, let alone three of them. (A.170-178.) This
fact was noted to Spamhaus, who refused to remove e360 or Mr. Linhardt from the
ROKSO list. The SBL lists IP addresses that purportedly associate with known
spammers.
e360 filed suit against Spamhaus on June 21, 2006 in the Circuit Court of Cook
County, alleging state law claims for tortious interference with contract, tortious
interference with prospective economic advantage, defamation per se, and
defamation per quod. (A. 12-20.) The Complaint was amended two days later to
include newly discovered acts being perpetrated by Spamhaus. (SA. 001-019.) The
Amended Complaint was served by special process server employing procedures
that complied with the Hague Convention on the Service Abroad of Judicial and
Extrajudicial Documents.
Initially, e360 and Mr. Linhardt filed a motion for preliminary injunction.
(SA. 022-076.) Due to the exigency of the circumstances facing e360 and Mr.
Linhardt, they then filed a motion for temporary restraining order. (SA. 197-387.)
The Circuit Court, by the Honorable Phillip Bronstein, entered a temporary
restraining order and ordered expedited discovery against Spamhaus after
conducting a properly noticed hearing at which Spamhaus failed to appear. (SA.
6
189.) Spamhaus was provided with a copy of the temporary restraining order
through the special process server as well as by FedEx express mail delivery and email.
(SA. 412.) Spamhaus complied with the temporary restraining order prior to
the July 24, 2006 before the deadline imposed by the Circuit Court.
On July 21, 2006, Spamhaus took the affirmative act of invoking the District
Court’s jurisdiction when it filed a Notice of Removal in the United States District
Court for the Northern District of Illinois, asserting diversity of citizenship and
damages in excess of $10 million was being sought. (A. 1-2.) The petition for removal
does not allege that personal jurisdiction is lacking over Spamhaus. Also on July 21,
2006 Spamhaus filed an Answer that purported to assert affirmative defenses for
lack of personal jurisdiction and improper service of process. (A. 24-33.)
Spamhaus never filed a Rule 12 motion to dismiss based on these affirmative
defenses.
Spamhaus never responded to the expedited discovery propounded by e360
and Mr. Linhardt. When the due date for the expedited discovery came, Spamhaus
failed to respond and also posted new references to e360 and Mr. Linhardt arguably
in violation of the temporary restraining order. e360 and Mr. Linhardt were thus
compelled to file motions with the District Court for Rules to Show Cause why
Spamhaus should not be sanctioned or held in contempt for its failure to abide by
the Circuit Court’s prior orders. (ECF Docket Entry ## 11, 15, and 17.) At the
August 23, 2006 hearing on these motions, e360 and Mr. Linhardt’s Motions for
Rules to Show Cause were not heard. The District Court’s rulings on these motions
7
were preempted by what even Spamhaus’ counsel viewed as an “unconventional
maneuver.” (A. 160.) Despite the fact that only one month prior, Spamhaus had
invoked the jurisdiction of the District Court, at this hearing Spamhaus’ counsel
announced that Spamhaus “wants to participate in the defense no further”, and
that he was authorized by Spamhaus to do two things only that day: Withdraw
Spamhaus’ Answer and withdraw his appearance. (A. 161.) Counsel for e360 and
Mr. Linhardt aptly noted it was Spamhaus that had removed the case to the
District Court, all the while failing to comply with the Circuit Courts’ orders. (Id.)
Counsel for e360 and Mr. Linhardt explained the continuing harm that was
occurring and further explained the scope of the Temporary Restraining Order that
the Circuit Court had previously entered, including the fact that it remained in
force at that time. (A. 162-163.)
Spamhaus’ counsel reiterated that Spamhaus “wants to do absolutely
nothing” and, in response to the District Court’s inquiry “do they want to lose?”
responded, in a most telling fashion: “They [Spamhaus] have been fully informed of
the fact that the default judgment is a real possibility. And they are aware of that
and are prepared to take that risk." (A. 163.)
The District Court allowed Spamhaus to withdraw its answer and further
allowed counsel leave to withdraw. (A. 164.) The District Court informed
Spamhaus’ counsel that he was doing so on the assumption that counsel had
informed Spamhaus it was a dead bang certainty that default is going to be entered
without any resistance to the lawsuit. (Id.) The District Court also informed
8
Spamhaus’ counsel that he was making his rulings on the condition that he was
going to reinstate, as a preliminary injunctive relief matter, the language of the
TRO that was entered in the Circuit Court. (Id.) The District Court made clear that
it was finding Spamhaus in default on this date, but not entering any judgment
against Spamhaus at that time. (A. 165.) Before relieving Spamhaus’ counsel from
any further legal obligation with respect to the case, the District Court required
Spamhaus’ counsel to inform Spamhaus what happened at the hearing, and that
the first step has been taken toward an entry of a judgment against Spamhaus as a
result of its default. (Id.)
As was contemplated during the August 23, 2006 hearing (A. 164-165.), e360
and Mr. Linhardt filed a motion for default judgment on August 30, 2006. (A. 118-
138.) This motion was supported by affidavits from Mr. Linhardt and Bartly
Loethen, one of e360 and Mr. Linhardt’s attorneys. A hearing was held on
September 12, 2006 and the matter taken under advisement. (A. 139.) On
September 13, 2006 the District Court entered an order for default judgment
against Spamhaus. (A. 140-143.) Spamhaus failed to appear despite being
properly notified of the proceedings. (A. 413.) On October 13, 2006 Spamhaus filed
its Notice of Appeal from the default judgment (which was then docketed by the
United States Court of Appeals for the Seventh Circuit as Case No. 06-3779.) (A.
144.)
On October 26, 2006, Spamhaus filed a Motion to Vacate Default Judgment
and For Leave to File a Memorandum in Support under Federal Rule of Civil
9
Procedure 60(b). Spamhaus’ counsel argued without success that Spamhaus was
receiving conflicting information regarding its response to the Complaint. (A. 177-
178). The District Court noted that Spamhaus’ actions regarding its withdraw of
counsel were intentional and consciously made, precluding any reliance on Federal
Rule of Civil Procedure 60(b)(1). (A. 174-184.) The District Court also was not
persuaded by the non-specific arguments that, despite Spamhaus’ overt act of
removing the case to District Court it lacked jurisdiction over Spamhaus or that
service of process was improper. (Id.) The District Court found that Spamhaus’
failure to participate in litigation and present its jurisdictional arguments prevented
those issues from being “crystallized by way of counter-affidavits or some other such
thing,” and thus “[t]here was not anything about this case that at least suggested
itself to me that I lacked personal jurisdiction, either over the person of the
defendant or the subject matter of the case.” (Id.) The District Court denied this
Motion to Vacate on October 31, 2006. (A. 158.)1 Spamhaus filed its second Notice of
Appeal from the denial of the Motion to Vacate (but not the motion for a stay of
enforcement of judgment or motion to quash the citation to discover assets) on
November 28, 2006 (which was docketed by this Court as Case No. 06-4169.) (A. 194)
On December 5, 2006, this Court consolidated Case Nos. 06-3779 and 06-4 169.
SUMMARY OF ARGUMENT
The District Court did not abuse its discretion by entering the default
judgment against Spamhaus for any of the reasons asserted in this appeal. Service
1 The district court also denied Spamhaus’ motion for a stay of enforcement of judgment
pending appeal and motion to quash e360 and Mr. Linhardt citation to discover Spamhaus’
assets, neither of which are subject of Spamhaus’ appeal.
10
of process of the amended Complaint was effective on Spamhaus on July 4, 2006
according to the requirements set out in the Hague Convention on the Service
Abroad of Judicial and Extrajudicial Documents. White v. Ratcliffe, 285 Ill.App.3d
758, 765 (2d Dist. 1996).
The District Court also had personal jurisdiction over Spamhaus at the time
it entered the default judgment against it. Spamhaus voluntarily appeared and filed
an Answer in the District Court case after removing this case from the Circuit
Court of Cook County. Spamhaus then withdrew its Answer and took no further
action in this case, even though it was informed of all of the proceedings against it,
including the motion for the entry of the default judgment, which included a
proposed judgment, and the entry of the judgment itself. Spamhaus never
challenged personal jurisdiction through a motion to dismiss nor did it raise this
defense at the time it withdrew its Answer, even though the district court warned
Spamhaus’ counsel that a default would ensue given Spamhaus’ withdrawal.
Sufficiency of process and lack of personal jurisdiction were not raised by
Spamhaus until several months later when it filed a motion to vacate the default
judgment pursuant to Fed. R. Civ. P. 60(b). The District Court did not abuse its
discretion in denying this motion, which was based on sub-sections 1, 4 and 6 for
relief. The District Court appropriately rejected the argument made by Spamhaus
under subsection 1 that excusable neglect or mistake occurred when in fact
Spamhaus’ intentional withdrawal of its answer was the reason for the default
judgment. The District Court was also well within its discretion when it determined
11
that the judgment was not void pursuant to subsection 4 for any of the reasons
asserted by Spamhaus. The District Court was similarly within its discretion when
it rejected Spamhaus arguments under subsection 6 because the Amended
Complaint stated viable claims against Spamhaus and e360 and Mr. Linhardt
sufficiently established damages.
The District Court also did not abuse its discretion when it entered a
permanent injunction against Spamhaus. The injunction violates no first
amendment or other constitutional principals because it does not prohibit protected
speech, is not a prior restraint overbroad.
STANDARD OF REVIEW
An appellate court reviews a District Court’s entry of a default judgment and
a District Court 's decision on a Rule 60(b) motion to vacate a default judgment for
an abuse of discretion. Homer v. Jones-Bey, 415 F.3d 748, 753 (7th Cir. 2005);
Robinson Eng’g Co. Pension Plan & Trust v. George, 223 F.3d 445, 448 (7th Cir.
2000). Constitutional issues are reviewed de novo. United States v. Wilson, 154 F.3d
658, 662 (7th Cir. 1998); Sequoia Books, Inc. v. Ingemunson, 901 F.2d 630, 633 (7th
Cir. 1990).
ARGUMENT
Despite the Quixotic notions on which Spamhaus believes this appeal is
warranted, this case involves nothing more then Spamhaus’ interference with
e360’s legitimate business operations and Spamhaus’ disdain for the United States
courts that required Spamhaus to do more than ignore this case. Spamhaus now,
12
ironically, criticizes the District Court for its actions in response to Spamhaus
machinations designed to avoid its prosecution, by asking this Court to remand the
case for additional proceedings - - proceedings to which Spamhaus refused to avail
itself originally and which will ultimately result in the same outcome for Spamhaus,
a default judgment and permanent injunction. This appeal, and the relief it seeks,
are merely the latest in a series of steps Spamhaus is taking to avoid having to
compensate e360 and Mr. Linhardt for the devastating wrongs Spamhaus has
perpetrated on them.
I. SPAMHAUS FORFEITED THROUGH CONDUCT ITS DEFENSES OF
INSUFFICIENCY OF PROCESS AND LACK OF PERSONAL
JURISDICTION
Objections to personal jurisdiction or to service of process must be raised in a
timely fashion, i.e., as a party's first pleading in the case, or they are waived.
Broadcast Music, Inc. v. M.T.S. Enterprises, Inc., 811 F.2d 278, 281 (5th Cir. 1987);
Fed. R. Civ. P. 12(h)(1); Giannakos v. M/V BRAVO TRADER, 762 F.2d 1295, 1298
(5th Cir. 1985). “That defense, like the other privileged defenses referred to in Rule
12(h)(1), may be waived by ‘formal submission in a cause, or by submission though
conduct.’” Id. “A party need not actually file an answer or motion before waiver is
found.” Id.; Marcial Ucin, S.A. v SS Galicia, 723 F.2d 994, 996-97 (1st Cir. 1983);
Broadcast Music, Inc. v. M.T.S. Enterprises, Inc., 811 F.2d 278, 281 (5th Cir. 1987)
(conduct of counsel may rise to level of voluntary appearance resulting in waiver of
defense of insufficiency of service). Spamhaus’ assertion that it was reserving its
jurisdiction defenses is not a complete shield from liability. Continental Bank v.
13
Meyer, 10 F.3d 1293 (7th Cir. 1992) (citing Burton v. Northern Dutchess Hosp., 106
F.R.D. 477, 481 (S.D.N.Y. 1985) for the proposition that “asserting jurisdictional
defect in answer does ‘not preserve the defense in perpetuity’”). In the instant case
it was Spamhaus who invoked the jurisdiction of the District Court in this matter,
appearing through counsel and initially filing and later withdrawing its Answer to
the Complaint, thus subjecting itself voluntarily to the jurisdiction of the District
Court.
Spamhaus never filed a motion to dismiss for either insufficiency of process
or lack of personal jurisdiction in the Circuit Court. Although receiving service of
process of the Amended Complaint, receiving notice of the Motion for the temporary
restraining order and receiving the order for the temporary restraining order (S.A.
412.), all through proper service of process (SA.021.), Spamhaus stood idly by, never
once raising either lack of service of process or personal jurisdiction as defenses
throughout the Circuit Court proceedings. Instead, Spamhaus momentarily
complied with the TRO but refused to respond to discovery, removed the case to the
District Court and answered, but did not move to dismiss, the complaint. Spamhaus
then voluntarily, and knowingly, withdrew its Answer, which it knew was the only
Spamhaus pleading even addressing these defenses through a “reservation” of
objections to personal jurisdiction and to service of process styled as affirmative
defenses. By doing so, Spamhaus effectively - - and knowingly - - forfeited these
defenses. Spamhaus thus submitted itself to the District Court’s jurisdiction.
14
II. SERVICE OF PROCESS ON SPAMHAUS WAS PROPER
A. The Amended Complaint Was Served In Accordance with the
Illinois Code of Civil Procedure and the Hague Convention
Spamhaus concludes, without providing any analysis why, service of process
of the Amended Complaint was ineffective. In fact, e360 and Mr. Linhardt’s service
of process was in compliance with the Hague Convention on the Service Abroad of
Judicial and Extrajudicial Documents as well as the Illinois Code of Civil
Procedure.
The original Complaint was never served because at about the time it was
filed, e360 and Mr. Linhardt learned of new wrongs being perpetrated by
Spamhaus. Thus, on June 23, 2006 an Amended Complaint was filed with the
Circuit Court of Cook County. (SA. 001-019.)
The Amended Complaint was served personally on Spamhaus through a
process server, Mr. David Llewelyn Morgan. Mr. Morgan was appointed as a special
process server by the Circuit Court on July 5, 2006. (SA. 020.) As confirmed by Mr.
Morgan’s affidavit (SA. 021.), Spamhaus was served on July 4, 2006 by Mr. Morgan
personally handing to and leaving with Tony Overington a true copy of the
Summons and First Amended Complaint of W 1 Office. (Id.) Tony Overington
represented himself to Mr. Morgan to be authorized to accept service of documents
on behalf of The Spamhaus Project. (Id.) Tony Overington was served at
Communications House, 26 York Street, London, W1U 6PZ, England, the
Registered Office of The Spamhaus Project. (Id.) This is the same address listed on
Spamhaus’ website as the “registered office address” and “address for documents.”
15
The manner by which Spamhaus was served with the Amended Complaint
complied in all respects with the requirements of the Hague Convention on the
Service Abroad of Judicial and Extrajudicial Documents. This is made clear in
White v. Ratcliffe, 285 Ill.App.3d 758, 765 (2d Dist. 1996) (rejecting argument that
the Hague Convention does not allow personal service by an independent process
server) The court in White recognized that “[a]lthough the Central Authority is
always to be made available as a means to effectuate service, its use is not
compulsory.” e360 and Mr. Linhardt use of an independent special process server
was appropriate on two distinct grounds under the Hague Convention. First, the
use of an independent special process server complies with the internal laws of
England. White v. Ratcliffe, 285 Ill.App.3d 758, 766 (recognizing that: “Article 19
expressly permits service of process by any method of service allowed by ‘the
internal law of the contracting State” and that English law specifically permits the
use of an independent process server to properly effectuate service). Secondly,
Article 10(c) of the Hague Convention allows use of an independent process server.
Article 10(c) provides that “the freedom of any person interested in judicial
proceedings to effect service of judicial documents directly through the judicial
officers, officials or other competent persons of the State of destination.”
Thus, even if Spamhaus had moved the District Court for dismissal of the
Amended Complaint based on insufficient service of process, there is no doubt that
the District Court would have appropriately denied the motion. Equally, if not more
importantly, there was nothing before the District Court to suggest that service of
16
process was insufficient in any way. Thus, the District Court did not abuse its
discretion by concluding that service of process was sufficient.
B. The District Court Properly Considered Service of Process on
Spamhaus Before Entering the Default Judgment and Permanent
Injunction
Spamhaus forfeited its right to challenge service of process when it submitted
to the District Court’s jurisdiction without challenging service of process. Although
Spamhaus noted in its Notice of Removal that “service has not been perfected
against Spamhaus,” it never made any motion for a determination of this baseless
assertion at the hearing on August 23, 2006 or at any other time. Spamhaus could
not be successful on such a motion because the Amended Complaint was properly
served on July 4, 2006. At the August 23, 2006 hearing before the District Court ,
when Spamhaus withdrew its answer and waived any further defense based on
sufficiency of process, Spamhaus had the forum and opportunity to challenge
service of process before withdrawing its answer, but affirmatively chose not to do
so. After Spamhaus abandoned the proceedings, all arguments asserting improper
service of process disappeared.
Under these circumstances, it is entirely unclear what Spamhaus believes is
further required of the District Court before entering a default judgment or
permanent injunction. The District Court did not abuse its discretion.
17
III. THE DISTRICT COURT PROPERLY EXERCISED PERSONAL
JURISDICTION OVER SPAMHAUS
A. e360’s Complaint Adequately Alleged Personal Jurisdiction
A federal district court sitting in diversity looks to the long-arm statute of the
state in which it is sitting to determine whether it has personal jurisdiction over the
defendants. E.g., Vilchis v. Miami Univ. of Ohio, 99 Fed. Appx. 743 (7th Cir. 2004).
In Illinois, the statute governing personal jurisdiction states, in pertinent part, as
follows:
§ 2-209. Act submitting to jurisdiction -- Process. (a) Any person,
whether or not a citizen or resident of this State, who in person or
through an agent does any of the acts hereinafter enumerated, thereby
submits such person, and, if an individual, his or her personal
representative, to the jurisdiction of the courts of this State as to any
cause of action arising from the doing of such acts:
(1) The transaction of any business within this State;
(2) The commission of a tortious act within this State; …
Bally Export Corp. v. Balicar, Ltd., 804 F.2d 398, 402 (7th Cir. 1986): 735 ILCS 5/2-
209.
e360’s Complaint and Amended Complaint adequately alleges that Illinois
courts could properly exercise personal jurisdiction over Spamhaus. Paragraph 4 of
the Amended Complaint states, in part, that “Spamhaus does business in Illinois
by, among other things, marketing its services to companies, and specifically
internet service providers, located in Illinois." (SA. 002.) This allegation, in and of
itself, provided a sufficient bases for the District Court to conclude that it could
exercise personal jurisdiction over Spamhaus. This assertion was never challenged
by Spamhaus at anytime while this matter was before the Circuit Court or while
18
Spamhaus appeared in this matter before the District Court. Spamhaus had ample
opportunity to file pleadings with the District Court incident to it initial removal.
In failing to do so, Spamhaus waived any right to assert this defense now. See
Swaim v. Moltan Company, 73 F. 3d 711, 717 (7th Cir. 1996) (explaining the
concepts of forfeiture and waiver under Rules 12 and 60(b)).
e360 and Mr. Linhardt also alleged facts to support a finding that Spamhaus
committed tortious conduct within the state. Spamhaus consciously and
intentionally targeted e360 and Mr. Linhardt, both residents of Illinois. The
Supreme Court has allowed the exercise of jurisdiction over a defendant whose only
"contact" with the forum state is the "purposeful direction" of a foreign act having
effect in the forum state. See, e.g., Calder v. Jones, 465 U.S. 783, 789, 104 S. Ct.
1482, 1487, 79 L. Ed. 2d 804 (1984). Accordingly, the District Court properly
exercised personal jurisdiction over Spamhaus.
B. Spamhaus Waived Lack of Personal Jurisdiction as a Defense
Spamhaus’ appeal is erroneously premised on the notion that it can ignore
the events leading up to its filing of the Rule 60(b) motion because the District
Court did not have personal jurisdiction over it and, therefore, could not impose a
default judgment or a permanent injunction on Spamhaus. It cannot. As noted in
Swaim, "the failure to challenge personal jurisdiction in a responsive pleading
amounts to a forfeiture of that claim”. Swaim v. Moltan Company, 73 F. 3d at 717,
citing Rice v. Nova Biomedical Corp., 38 F.3d 909, 914 (7th Cir. 1994). Swaim
acknowledges that that a defaulting party is generally treated differently and does
19
not forfeit its jurisdictional challenge. Id., citing Reynolds v.. International
Amateur Athletic Fed’n, 23 F.3d 1110, 1120 (6th Cir. 1994). This different
treatment, however, is premised on a defaulting party failing to appear or filing an
answer. Id. Here, Spamhaus was the party invoking the jurisdiction of the District
Court, it appeared through counsel, answered the Amended Complaint, and later
chose to withdraw its Answer despite the District Court's warnings that a default
judgment would be entered against it. Under these circumstances, Spamhaus is not
the non-appearing defendant who failed to file an answer who should then be
afforded the opportunity to challenge personal jurisdiction, notwithstanding that it
was not previously raised.
Spamhaus essentially confuses the concepts of forfeiture with a waiver.
Forfeiture is the failure to make a timely assertion of a right before a tribunal
competent to determine such right. Swaim v. Moltan Company, 73 F. 3d at 718,
note 4, citing Yakus v. United States, 321 U. S. 414, 444,64 S. Ct. 660, 677, 88 L.
Ed. 834 (1994). Waiver, by contrast, is the "intentional relinquishment or
abandonment of a known right." Swaim v. Moltan Company, 73 F. 3d at 718, note
4, citing Johnson v. Zerbst, 304 U. S. 458, 464, 58 S. Ct. 1019, 1023, 82 L. Ed. 1461
(1938).
While the ability to assert personal jurisdiction is merely forfeited if not
challenged by a timely motion to dismiss under Rule 12 or an amended or
supplemental pleading under Rule 15, it can be asserted again in a Rule 60(b)
motion, Spamhaus did far more than merely forfeit its ability to assert lack of
20
personal jurisdiction. Spamhaus, through its affirmative conduct of first appearing
and answering the Complaint, then withdrawing that answer, waived any further
right to assert lack of personal jurisdiction as a defense in this case. The District
Court aptly noted that Spamhaus does not get two bites at the same apple and that
it would be unfair to e360 and Mr. Linhardt if it did. (A. 183.) Given Spamhaus’
conduct throughout the course of this litigation, the District Court was well within
its discretion to find that it had personal jurisdiction over Spamhaus.
IV. THE INJUNCTION AGAINST SPAMHAUS IS APPROPRIATE AND
CONSTITUIONAL
A. The Injunction Issued Against Spamhaus Is Appropriate
1. The District Court Properly Adopted the Temporary Restraining
Order as Its Preliminary Injunction
Spamhaus does not contest the validity of the Temporary Retraining Order
issued by the Circuit Court and even complied with it for a brief period of time. The
Circuit Court properly considered all four factors of the traditional test for
injunctive relief. (S.A. 388-407) It found in granting the temporary restraining
order:
a) Plaintiffs have shown that they have a clearly ascertainable
right in need of protection that is, the continuation of
e360Insight as a going concern;
b) Plaintiffs have shown that there is a fair question that
Plaintiffs will succeed on the merits in that there appears to
be an issue as to whether Defendant, The Spamhaus Project,
aka The Spamhaus Project Ltd., properly included
e360Insight and Mr. Linhardt on the ROKSO list;
21
c) Plaintiffs have shown that they will suffer irreparable harm
if an injunction does not issue, namely that e360Insight will
cease operating; and
d) Plaintiffs have shown that they have no adequate remedy at
law or in equity, because damages will not compensate for
e360Insight, LLC or Mr. Linhardt’s loss of good will or
damage to reputations, nor re-establish e360Insight, LLC as
a going concern.
The District Court was well within its discretion to adopt the TRO as its
preliminary injunction. “Decisions to grant or deny preliminary injunctive relief are
addressed to the sound discretion of the District Court, and appellate review of such
a decision is limited.” Wesley-Jessen Div. of Schering Corp. v. Bausch & Lomb, Inc.,
698 F.2d 862, 864 (7th Cir. 1983); American Hospital Association v. Harris, 625
F.2d 1328, 1330 (7th Cir. 1980); Ideal Industries v. Gardner Bender, Inc., 612 F.2d
1018, 1022 (7th Cir. 1979), cert. denied, 447 U.S. 924, 65 L. Ed. 2d 1116, 100 S. Ct.
3016 (1980). The court's discretion is guided by consideration of four factors: (1)
whether the plaintiff will have an adequate remedy at law or will be irreparably
harmed if the injunction does not enter; (2) whether the threatened injury to the
plaintiff outweighs the threatened harm the injunction may inflict on the
defendant; (3) whether the plaintiff has at least a reasonable likelihood of success
on the merits; and, (4) whether the granting of a preliminary injunction will
disserve the public interest. Wesley-Jessen Div. of Schering Corp. v. Bausch &
Lomb, Inc., 698 F.2d 862, 864 (7th Cir. 1983); O'Conner v. Board of Education, 645
F.2d 578, 580 (7th Cir.), cert. denied, 454 U.S. 1084, 70 L. Ed. 2d 619, 102 S. Ct. 641
(1981). These factors are essentially the same as those considered by the Circuit
22
Court, which led the Circuit to conclude that the temporary relief e360 and Mr.
Linhardt sought was appropriate.
While the District Court's judgment must be exercised within this
framework, this court has said on prior occasions that it will not substitute its
judgment for that of the District Court unless it is convinced that the court abused
its discretion. Wesley-Jessen Div. of Schering Corp. v. Bausch & Lomb, Inc., 698
F.2d 862, 864 (7th Cir. 1983); See Helene Curtis Industries v. Church & Dwight Co.,
560 F.2d 1325, 1330 (7th Cir. 1977), cert. denied, 434 U.S. 1070, 55 L. Ed. 2d 772,
98 S. Ct. 1252 (1978). “Moreover, if the District Court decides that a preliminary
injunction is appropriate, it has considerable discretion in fashioning suitable
temporary relief.” Wesley-Jessen Div. of Schering Corp. v. Bausch & Lomb, Inc., 698
F.2d 862, 864 (7th Cir. 1983); Banks v. Trainor, 525 F.2d 837, 841 (7th Cir. 1975),
cert. denied, 424 U.S. 978, 47 L. Ed. 2d 748, 96 S. Ct. 1484 (1976).
Fed. R. Civ. P. 65(b) establishes the procedure whereby the party against
whom a temporary restraining order has issued can move to dissolve or modify the
injunction, upon short notice to the party who obtained the order. Spamhaus never
did this. Indeed, Spamhaus’ counsel raised no objection whatsoever at the August
23, 2006 hearing in which the District Court announced its attention to convert the
TRO into a preliminary injunction. Because the District Court was informed of the
existence of the TRO, and was further informed by Spamhaus’ counsel that
Spamhaus did not intend to participate in a defense in any fashion, the District
Court was well within its discretion to adopt the Circuit Court’s TRO as the District
23
Court’s preliminary injunction in order to protect e360 and Mr. Linhardt from the
continuing harm that Spamhaus was perpetrating on them.
Spamhaus incorrectly asserts that “[w]hen the district court made the
preliminary injunction determination, it had no evidence before it about any
irreparably injury, inadequate remedies at law, the balance of hardships, or public
interest considerations.” (Appellant’s Brief at 38-39). To the contrary, the evidence
the District Court had before it regarding the continuing harm to e360 and Mr.
Linhardt as well as Spamhaus counsel’s representation that Spamhaus had chosen
to abandon any and all defenses to the lawsuit left the District Court with but one
choice - - to continue the protection afforded to e360 and Mr. Linhardt by the Circuit
Court’s TRO. There was nothing presented to the District Court that mitigated the
necessity of this protection and, indeed, the only abuse of discretion that could have
resulted under these circumstances is if the District Court had not adopted the
TRO.
A court must consider four traditional criteria in deciding whether to grant
injunctive relief: (1) whether the plaintiff has a reasonable likelihood of success on
the merits; (2) whether the plaintiff will have an adequate remedy at law or will be
irreparably harmed if the injunction does not issue; (3) whether the threatened
injury to the plaintiff outweighs the threatened harm the injunction may inflict on
the defendant; and (4) whether the granting of the injunction will harm the public
interest. N.L.R.B. v. Electro-Voice, Inc., 83 F.3d 1559, 1567 (7th Cir. 1996); Faheem-
24
El v. Klincar, 841 F.2d 712, 716 (7th Cir. 1988). The District Court had all of the
information necessary to afford e360 and Mr. Linhardt preliminary injunctive relief.
The District Court had before it a copy of the TRO and affidavit of Mr.
Linhardt that were filed as part of the motions being considered at the August 23,
2006 hearing. (See ECF docket entry ## 11, 15 and 17.) Those motions as well as
the TRO, affidavit and other information, none of which was countered or object to
by Spamhaus, demonstrated to the District Court the propriety of it entering the
preliminary injunction. Sufficient evidence existed before the District Court to
support that e360 did not have an adequate remedy at law and would suffer
irreparable harm if the preliminary injunction was not entered; that the threatened
injury to the e360 (going out of business/ blocking e360’s ability to send e-mails to
anyone from e360’s internet lines outweighed the threatened harm the injunction
may inflict on the Spamhaus (a few mouse clicks/key strokes to remove e360 from
the ROSKO list); that e360 had a reasonable likelihood of success on the merits, in
light of the evidence presented to the Circuit Court and bolstered by Spamhaus’
counsel withdrawing its appearance and Spamhaus withdrawing its answer; and
that the preliminary injunction would not disserve the public interest because 1)
Spamhaus was not complying with the TRO, and compliance with judicial orders is
in the public interest; 2) Spamhaus did not present any evidence to support finding
that e360 and Mr. Linhardt were conducting any illegal activity and accordingly,
had no public interest in listing a legitimate company on its ROSKO list. These
points were reiterated to some degree at the August 23, 2006 hearing while
25
Spamhaus’ counsel stood idly by. (A. 162-163.) The District Court did not abuse its
discretion in issuing a preliminary injunction.
2. The District Court Properly Entered the Permanent Injunction
According to Federal Rule of Civil Procedure 65.
When seeking a permanent injunction, the first of the four traditional factors
set out above is slightly modified because the issue now is not whether the plaintiff
has demonstrated a reasonable likelihood of success on the merits, but whether he
has in fact succeeded on the merits. See Amoco v. Village of Gambell, 480 U.S. 531,
94 L. Ed. 2d 542, 107 S. Ct. 1396, 1404, n.12 (1987). Here, there is no doubt that
e360 and Mr. Linhardt succeeded on the merits of this case as a result of Spamhaus
first appearing and defending this case, then withdrawing its attorneys’
appearances, withdrawing its answer and abandoning its defense of this case until
after judgment was entered against it.
The permanent injunction comported with the specificity requirement set
forth by Rule 65(d), which requires the order to set forth (1) the reasons for the
issuance of the injunction; (2) the specific terms of the injunction; and (3) the terms
must be described in reasonable detail. As Spamhaus acknowledges on page 40 of
its brief, “the explanation can be oral or written and the absence of an explanation
can be forgiven if the justification is clear from the record.” See EEOC v. Severn
Trent Serv., Inc., 358 F.3d 438, 442 (7th Cir. 2004).
The permanent injunction adequately sets forth the reasons for its issuance.
The District Court found that Spamhaus has wrongfully placed e360 and Mr.
26
Linhardt on its black list of companies who have sent spam e-mail; tortiously
interfered with e360 and Mr. Linhardt’s contracts with its suppliers and customers;
tortiously interfered with e360 and Mr. Linhardt’s prospective economic advantage
by blocking e-mail e360 and Mr. Linhardt attempted to send; and defamed e360 and
Mr. Linhardt by publishing false statements about plaintiffs on its website. (A. 140.)
The permanent injunction also sets forth five specific terms for the
injunction, all of which are sufficiently detailed assure Spamhaus’ compliance.
a) Spamhaus shall not take any action to cause email sent by
Plaintiffs or their affiliates, subsidiaries, or related
companies owned or controlled by Plaintiffs to be blocked,
delayed, altered, or interrupted in any way (including,
without limitation, by listing Plaintiffs on Spamhaus’
ROKSO list, within an SBL listing on Spamhaus’ website,
using blacklisting technology in concert or conjunction with
others, or taking any other action to cause any such
interference) unless Spamhaus can demonstrate by clear and
convincing evidence that Plaintiffs have violated relevant
United States law. Such clear and convincing evidence may
only be shown after providing Plaintiffs with an opportunity
to review any alleged offending email, including a review of
the email header and content (in its entirety), and providing
Plaintiffs with an opportunity to show the offending email
was not sent in violation of United States law to the
satisfaction of a reasonable person. If such clear and
convincing evidence is shown, then and only then may
Spamhaus list the Internet Protocol (IP) address, and only
the IP address, from which the offending email was sent on
its website.
b) Spamhaus shall not list entire networks or ranges of IP
addresses owned or operated by Plaintiffs simply because
they are registered in the Plaintiffs’ names or physical
addresses without meeting the clear and convincing standard
for the IP address in question.
c) Spamhaus shall post, within five business days of the date of
this order, on its website at both the main home page and at
27
the ROKSO jump page, a message of 1 inch by 1 inch, the
text of which is to be reasonably approved by Plaintiffs, and
which, generally, indicates that Plaintiffs were erroneously
listed on the website as spammers and that Plaintiffs are not
spammers. Defendant Spamhaus shall leave such message
on its site for a period of six months.
d) Spamhaus shall not contact or cause others to contact any
customers or suppliers of the Plaintiffs in efforts to cause
said customers or suppliers to cease doing business with
Plaintiffs.
e) Spamhaus shall not contact or cause others to contact any
customers or suppliers of Plaintiffs and allege or assert that
Plaintiffs are spammers or other like term.
Despite the lengths to which the District Court went to fashion an injunction
that is, in all respects compliant with Rule 65, Spamhaus now quibbles with certain
immaterial aspects of the terms of the injunction.
Spamhaus should have sought any relief concerning the injunction in the
District Court because the District Court is the proper venue to redress such
concerns. An application for an order staying, suspending, modifying, restoring, or
granting an injunction during the pendency of an appeal must ordinarily be made in
the first instance to the district court. Fed. R. App. P. 8(a)(1)(C). This rule applies
even when a notice of appeal has been filed or the appeal has been docketed in the
court of appeals. Because of its familiarity with the case, a district court can best
determine whether the stay or modification should be granted and, if granted,
determine the amount of any bond necessary to protect the rights of the party who
prevailed. This relief may be granted pending an appeal on such terms as to bond or
otherwise as the trial court considers proper for the protection of the rights of the
adverse party. Fed.R.Civ.P. 62(c). Thus, any issues Spamhaus has regarding the
28
language of the permanent injunction should have been resolved before the District
Court.
B. The Permanent Injunction Against Spamhaus is Constitutional
1. The Activity Enjoined By The District Court Is Not Protected
Speech But Conduct
Spamhaus’ entire first amendment argument is based on the erroneous
proposition that its tortious activity is speech. It is not. The “speech” Spamhaus
argues is protected involves Spamhaus placing e360 and Mr. Linhardt on the
ROKSO and SBL automated lists that Spamhaus generates and maintains
according to certain rules it establishes for inclusion on the list. (SA. 115.)
Placement on the ROKSO list is based on objective, verifiable criteria, the primary
one being that only persons or entities that have been removed from three ISPs.
Spamhaus also has objective criteria for removing a listed individual or entity from
its lists. Spamhaus makes these objective criteria very clear on its own website. (Id.)
Placement on both the SBL list and the ROKSO causes the listed party to be
unable to send email to ISPs using the Spamhaus lists and this is facilitated
through an automated function at Spamhaus which consistently updates the
blocking technology sold by Spamhaus to the ISPs. Both the ROKSO list and the
SBL list are sold by Spamhaus to ISPs and others (SA. 415-419.), who buy it not
because they are interested in paying for Spamhaus’ opinions, which by the way
Spamhaus offers for free elsewhere on its website, but for the service Spamhaus
provides, a list of verifiable internet scofflaws that engage in a whole host of
29
activities from which ISPs and others deem undesirable. This clearly results in the
listings being more than mere speech, but graduating to conduct.
e360 and Mr. Linhardt, however, have never been removed from any ISPs at
the time they were listed on the ROKSO, nor did they engage in any activity that
would warrant inclusion on the SBL list. e360 and Mr. Linhardt employ
methodologies that assure the recipient of the emails sent by e360 and Mr. Linhardt
want to receive those emails. (S.A. 003-004.) There is no conduct that Spamhaus
can point to that would warrant e360 or Mr. Linhardt being placed on the ROKSO
or SBL lists. Despite repeated efforts to be removed from the ROKSO and SBL lists,
Spamhaus would not adhere to its own rules regarding placement and removal of
individuals and entities from these lists.
All of Spamhaus’ activity pertaining to e360 and Mr. Linhardt is conduct,
which does not fall under the protections afforded by the first amendment. See e.g.
Rumsfeld v. Forum for Academic & Institutional Rights, Inc., 547 U.S. 47 (U.S.
2006) (rejecting the view that conduct can be labeled speech whenever the person
engaging in the conduct intends thereby to express an idea and reaffirming that the
Court has extended First Amendment protection only to conduct that is inherently
expressive). Spamhaus cannot now shield itself behind the first amendment when
it conducts itself badly. Here, Spamhaus has failed to abide by its own rules
pertaining to the conduct that it has itself determines who is placed on the ROKSO
and SBL lists.
30
Stated simply, the injunction against Spamhaus precludes conduct, not
speech, for which there is no first amendment protection. None of Spamhaus’ speech
is being subjected to a prior restraint that would preclude the enforcement of the
injunction as currently written.
2. Spamhaus Does Not Engage in Protected Speech Because Its
Statements Involving e360 are False
Even if Spamhaus’ activities are deemed to be speech, they still are not
protected by the first amendment. There is “no constitutional value in false
statements of fact.” Gertz v. Robert Welch, Inc., 418 U.S. 323, 338 (1974)
(acknowledging that “making slanderous statements and defamatory falsehoods of a
primarily private concern … are on the lowest rung of the protection of the First
Amendment”); Barlow v. Sipes, 744 N.E.2d 1, 9 (1st Dist. 2001). “False statements of
fact are particularly valueless; they interfere with the truth-seeking function of the
marketplace of ideas, and they cannot easily be repaired by counterspeech, however
persuasive or effective.” Hustler Magazine v. Falwell, 485 U.S. 46, 51 (1988);
Barlow v. Sipes, 744 N.E.2d 1, 9 (1st Dist. 2001) (upholding an injunction that
“primarily operates to address alleged private wrongs committed … imputing
dishonest business practices and discouraging individuals from patronizing the …
business).
“The intentional lie does not materially advance society’s interest in
‘uninhibited, robust, and wide-open’ debate on public issues.” Barlow v. Sipes, 744
N.E.2d 1, 9 (1st Dist. 2001) quoting New York Times Co. v. Sullivan, 376 U.S. 254,
31
265 (1964). “Falsehoods belong to that category of utterances that ‘are no essential
part of any exposition of ideas and are of such slight social value as a step to truth
that any benefit that may be derived from them is clearly outweighed by the social
interest in order and morality.’” Barlow v. Sipes, 744 N.E.2d 1, 9 (1st Dist. 2001)
quoting Chaplinsky v. New Hampshire, 315 U.S. 568, 572 (1942).
The speech here is precisely the type of speech that the first amendment does
not protect. The ROKSO and SBL lists purportedly contain facts, not opinions, and
e360 and Mr. Linhardt’ inclusion on this list renders these facts, at least as to
them, false. e360 and Mr. Linhardt are without recourse given the factual falsity of
the statements pertaining to them. Spamhaus’ intentional lies should not be
afforded the protection of the first amendment that legitimate speech deserves.
3. The Injunction Does Not Constitute Impermissible Compelled
Speech
The injunction, in part, requires Spamhaus to print on its website what is
essentially a retraction of the prior false statements of fact Spamhaus placed on the
ROKSO lists. The injunction does not constitute compelled speech because it only
requires Spamhaus to correct the prior erroneous placement of e360 and Mr.
Linhardt on the ROKSO list. Here, Spamhaus is not obliged to express a message
with which it disagrees because Spamhaus created the misconception that e360 and
Mr. Linhardt are spammers by ignoring it own criteria for being a “spammer” under
Spamhaus’ definition of that term. Accordingly, Spamhaus cannot disagree with the
32
message because Spamhaus was originally incorrect, according to its own
standards, by listing e360 as a “spammer.”
Moreover, “[t]he First Amendment's guarantee of freedom from ‘compelled
speech’ is not absolute. Particularly in the commercial arena, the United States
Constitution permits the state to require speakers to express certain messages
without their consent, the most prominent examples being warning and nutritional
information labels. The United States Supreme Court has allowed states to require
the inclusion of purely factual and uncontroversial information as long as disclosure
requirements are reasonably related to the state's interest in preventing deception
of consumers.” Entm't Software Ass'n v. Blagojevich, 469 F.3d 641 (7th Cir. 2006).
4. The Injunction Is Not Impermissibly Broad
An injunction is overbroad only if it could proscribe conduct which is more
broad than necessary to accomplish the permissible goals of the injunction. Madsen
v. Women's Health Ctr., 512 U.S. 753 (U.S. 1994) (noting that injunctive relief
should be no more burdensome to the defendant than necessary to provide complete
relief to the plaintiffs). Spamhaus’ argument here is not even ripe as the language
of the retraction message has not yet been determined. As a concept, however,
requiring language that requires Spamhaus to acknowledge its prior erroneous
placement of e360 and Mr. Linhardt on the ROKSO list in not overbroad nor
unconstitutional. The District Court did not abuse its discretion by requiring
Spamhaus to engage in conduct - - to post what amounts to be nothing more than a
retraction - - to correct prior conduct that harmed e360 and Mr. Linhardt.
33
In the final analysis, the permanent injunction entered by the District Court
appropriately addressed Spamhaus’ continuing conduct and fashioned remedies for
e360 and Mr. Linhardt that went only as far as needed under the circumstances of
this case. None of the remedies contained in the permanent injunction run afoul of
Spamhaus’ first amendment rights or present any constitutional concerns
whatsoever. The District Court acted well within its discretion when it entered the
permanent injunction against Spamhaus.
V. THE DISTRICT COURT DID NOT ABUSE ITS DISCRETION IN
DENYING SPAMHAUS’ MOTION TO VACATE THE DEFAULT
JUDGMENT
“Relief from a judgment under Fed. R. Civ. P. 60(b) is an extraordinary
remedy and is granted only in exceptional circumstances.” Bally Export Corp. v.
Balicar, Ltd., 804 F.2d 398, 400 (7th Cir. 1986) (holding that “[t]he decision to grant
relief under rule 60(b) is left to the sound discretion of the trial court, and review of
a trial court's decision to grant or deny rule 60(b) relief is subject to an abuse of
discretion standard.”). There are no exceptional circumstances here.
Fed. R. Civ. P. 60(b) provides, in relevant part:
On motion and upon such terms as are just, the court may relieve a
party or his legal representative from a final judgment, order, or
proceeding for the following reasons: (1) mistake, inadvertence,
surprise or excusable neglect . . . (4) the judgment is void … (6) any
other reason justifying relief from the operation of the judgment
None of these grounds provide Spamhaus with the relief it seeks.
34
A. Rule 60(b)(1) Does Not Provide Relief for Spamhaus; There Is No
Excusable Neglect, Inadvertence, and/or Mistake Exists
Rule 60(b)(1) does not protect Spamhaus’ intentional choice not to challenge
personal jurisdiction or service of process before the District Court. Spamhaus had
every opportunity to contest jurisdiction and service of process, but chose instead to
abandon the proceedings.
Spamhaus claims that some unspecified misunderstandings regarding
federal civil procedure, and an apparent miscommunication between Spamhaus’
United States counsel and United Kingdom counsel, account for the situation that
Spamhaus now finds itself in. e360 and Mr. Linhardt respectfully submit that even
if all of this is true, it is irrelevant for purposes of challenging any aspect of this
case pursuant to Rule 60(b)(1). No excusable neglect, inadvertence or mistake
occurred here. Spamhaus intentionally chose a path of conscience disregard for the
District Court’s authority, a path down which it proceeded throughout this case. It
continued down that path, teeth into the wind, despite the District Court’s explicit
warnings as to the consequences of doing so. Spamhaus continued to take this path
even upon facing the motion for entry of default judgment. In this context, the
District Court was well within its discretion to deny Spamhaus’ request for what
essentially amounts to a “do over” pursuant to Rule 60(b)(1).
Moreover, Spamhaus’ Motion to Vacate the Default Judgment asserts that
Spamhaus was “denied … its opportunity to present extrinsic evidence and
affidavits regarding service of process and personal jurisdiction.” (Appellant’s Brief
at 50). This statement is irrelevant, if not false. Spamhaus had multiple
35
opportunities to contest jurisdiction including: a motion filed incident to the original
removal to District Court; filing a 12(b)(2) motion incident to its initial removal
petition; at the August 23, 2006 court hearing, challenging the District Court’s
jurisdiction and/or service before it withdrew its Answer and appearance; opposing
e360’s Motion for Default Judgment; filing an affidavit in support of its Motion to
Vacate the Default Judgment attesting to a lack of service and/or personal
jurisdiction. Spamhaus failed to do any of these things.
The most Spamhaus did was file a declaration by Steve Linford, who
represents himself out to be the sole Director of Spamhaus, for the purpose of
certifying Spamhaus’ responses to a citation to discover assets. (A. 190-192.) In it,
Mr. Linford claims he is making his statements in part to “preserve any objections
to this Court’s personal jurisdiction over The Spamhaus Project, LTD…” (A. 190.)
Putting aside the numerous infirmaries that preclude the declaration from
being considered by the District Court (including the lack of Mr. Linford’s
competency and personal knowledge to support many of the statements he makes,
irrelevancy to the purpose for which the declaration is offered, hearsay and
unsubstantiated conclusions lacking foundation) the declaration is most telling for
what it does not contain - - a refutation of the jurisdictional assertion by e360 and
Mr. Linhardt, that “Spamhaus does business in Illinois by, among other things,
marketing its services to companies, and specifically internet service providers
(ISPs), located in Illinois." (SA. 002.). In other words, even if this declaration had
been properly submitted to the District Court , and assuming it contained
36
admissible evidence, the District Court would have properly found that nothing in
the declaration precluded a finding of personal jurisdiction over Spamhaus.
Spamhaus makes much of the fact that it was not allowed to file a
memorandum of law to support its Rule 60(b) motion, but the District Court was
well within its discretion to deny this request based on what had been presented to
it up to that point in the lawsuit as well as in the Rule 60(b) motion itself.
Spamhaus’ counsel’s argument at the hearing (A. 174-184.) shed no additional light
on what purpose additional briefing would have served. The declaration of Mr.
Linford makes clear that any additional evidence that Spamhaus might offer would
have failed to address any point that would have led the District Court to void the
judgment. The only discernable effect of allowing the continued proceedings
Spamhaus sought was to further drag out Spamhaus’ ability to defy the injunctive
relief contained in the judgment and avoid paying the damages assessed against it.
The District Court had the discretion to put a stop to Spamhaus’ delaying tactics,
and exercised that discretion appropriately.
B. Rule 60(b)(4) Does Not Provide Relief To Spamhaus; The Judgment
Is Not Void
Spamhaus’ appeal suggests that the District Court’s judgment is void because
of 1) insufficiency of process; or 2) lack of personal jurisdiction. The District Court
properly exercised its discretion in denying Spamhaus’ Motion to Vacate the Default
Judgment based on Rule 60(b)(4). At the hearing for the Motion to Vacate the
Default Judgment, Spamhaus’ attorney only argued that “I have not seen any
37
finding that there was proper service, as required by the Hague Convention” and
that he had “not seen any statement that the Court had jurisdiction – personal
jurisdiction – in any of this.” (A. 179). The District Court was under no obligation
to make an affirmative finding as to service of process and personal jurisdiction
where Spamhaus, through its appearance and answer, had submitted itself to the
District Court’s jurisdiction and had the opportunity to challenge both, but instead
intentionally abandoned the proceedings with knowledge of the impending default
judgment.
“If a defendant, after receiving notice, chooses to let the case against them go
to a default judgment, the defendant must then shoulder the burden of proof when
the defendant decides to contest jurisdiction in a post judgment Fed. R. Civ. P.
60(b)(4) motion.” Bally Export Corp. v. Balicar, Ltd., 804 F.2d 398 (7th Cir. 1986).
Spamhaus did not meet its burden to have the default judgment vacated.
Notwithstanding the District Court’s refusal to allow Spamhaus to file a
memorandum in support of its Motion to Vacate, the burden remains with
Spamhaus to prove the default judgment should be vacated on improper service
grounds. Trustees of Central Laborers’ Welfare Fund, v. Keith and Dennis Lowery,
924 F.2d 731, 732 (7th Cir. 1991) (affirming District Court’s refusal to vacate
judgment on service grounds where defendant did not carry its burden of
demonstrating that service was inadequate and the court found “some indication in
the record” of service); Bally Export Corp. v. Balicar, Ltd., 804 F.2d 398, 404 (7th
Cir. 1986) (holding that defendant had the burden of proving a judgment is void for
38
lack of service). Spamhaus never produced any of evidence demonstrating that
service against it was improper before the Circuit Court or the District Court, nor
could it given e360 and Mr. Linhardt’s compliance with the Hague Convention.
Because Spamhaus did not offer any proof of invalid service, the District Court did
not err in denying Spamhaus’ Motion to Vacate the Default Judgment. Trustees of
Central Laborers’ Welfare Fund, v. Keith and Dennis Lowery, 924 F.2d 731, 732 (7th
Cir. 1991); Jones v. Jones, 217 F.2d 239, 242 (noting that because the defendants
failed to offer any proof, such as affidavits, there was no grounds upon which to find
the judgment void).
The District Court’s judgment is not void for lack of personal jurisdiction
either. That personal jurisdiction exists here was clearly established above in
section III(B). The District Court did not abuse its discretion in entering the
judgment against Spamhaus.
C. Rule 60(b)(6) Also Provides No Relief to Spamhaus
Spamhaus attempts to invoke Rule 60(b)(6) on three bases: (1) e360 and Mr.
Linhardt fail to state any claims against Spamhaus; (2) there was no evidentiary
hearing on damages producing findings of fact; and (3) there was insufficient
evidentiary support for the award of damages. Spamhaus’ attempts are without
merit.
Other than Spamhaus’ conclusory statement that the Amended Complaint
fails to state a claim, nothing in the record even remotely suggests this to be the
case. e360 and Mr. Linhardt’s Amended Complaint complies in all respects to the
39
plain and concise statement required by Fed.R.Civ.P. 8. The allegations contained
in the Amended Complaint more than adequately put Spamhaus on notice of the
claims against it, and indeed, Spamhaus even answered those claims. There is no
basis to find the District Court abused its discretion by not agreeing with
Spamhaus’ notion that the Amended Complaint does not state claims adequately.
Similarly, Spamhaus’ argument that a lack of an evidentiary hearing
producing findings of fact precludes judgment against Spamhaus, is as erroneous as
the premise on which it is based. Spamhaus, despite notice of the Motion for Entry
of a Default Judgment, which included the evidence that e360 and Mr. Linhardt
were prepared to present to the District Court, failed to challenge that evidence and
thus no additional evidentiary hearing was necessary over and above the District
Court duly considering the affidavits presented to it. The record is clear that the
District Court, in fact, appropriately considered the evidence before it, and indeed,
rejected e360 and Mr. Linhardt’s request for punitive damages and attorneys fees.
The record is clear that the compensatory damages sought by e360 and Mr.
Linhardt were appropriate and substantiated.
Finally, Spamhaus argues that there was an insufficient basis for the
damages awarded by the District Court. The damages were supported by an
affidavit presented by e360’s President, Mr. Linhardt, which detailed, over eight
pages and forty one paragraphs, the damages sought from Spamhaus. (A. 124-131.)
Spamhaus now cryptically concludes that this was not good enough although it is
entirely unclear what additional information Spamhaus would conclude is
40
sufficient. Regardless of Spamhaus’ views, Mr. Linhardt’s affidavit, which was duly
considered by the District Court, is more than sufficient to substantiate the
monetary dollar judgment obtained from Spamhaus.
In the final analysis, none of the arguments Spamhaus raises under Rule
60(b)(6) suggest that the District Court abused its discretion in entering the
judgment against Spamhaus based on the claims asserted in the Amended
Complaint and the evidence supporting e360 and Mr. Linhardt’s damages.
CONCLUSION
For the reasons stated in this brief, e360Insight, LLC and David Linhardt
respectfully request that the default judgment entered by the District Court be
affirmed in all respects.
Dated: March 23, 2007 ________________________
Joseph L. Kish
Attorney for Plaintiffs-Appellees
e360INSIGHT, LLC and David Linhardt
Synergy Law Group, LLC
730 W. Randolph Street
Suite 600
Chicago, Illinois 60661
Telephone: (312) 454-0015
Facsimile: 312-454-0261
41
CERTIFICATE OF COMPLIANCE WITH F.R.A.P. RULE 32(a)(7) AND CIRCUIT
RULE 31(e)(1) CERTIFICATION
The undersigned, counsel of record for the Plaintiffs-Appellees, e360Insight,
LLC and David Linhardt, furnishes the following in compliance with F.R.A.P. Rule
32(a)(7).
I hereby certify that this brief conforms to the rules contained in F.R.A.P.
Rule 32(a)(7) for a brief produced with a proportionality spaced font. The length of
the brief is 11,918 words.
The undersigned also certifies that I have filed a digital version of the Brief of
Appellees on a virus-free disc in a non-scanned PDF format, and I certify that the
contents of the Supplemental Appendix are not available in digital versions that can
be generated by printing to PDF from the original word processing file.
Dated: March 23, 2007 ________________________
Joseph L. Kish
Attorney for Plaintiffs-Appellees
e360INSIGHT, LLC and David Linhardt
Synergy Law Group, LLC
730 W. Randolph Street
Suite 600
Chicago, Illinois 60661
Telephone: (312) 454-0015
Facsimile: 312-454-0261
42
CERTIFICATE OF SERVICE
I, Joseph L. Kish, an attorney, hereby certify that I served a copy of the
foregoing RESPONSE TO BRIEF OF PLAINTIFFS-APPELLEES, e360INSIGHT,
LLC AND DAVID LINHARDT upon:
Matthew M. Neumeier
Craig C. Martin
Carrie A. Fino
JENNER & BLOCK LLP
330 North Wabash Avenue
Chicago, IL 60611
Phone:(312) 222-9350
Fax:(312) 527-0484
Matthew B. Prince
Adjunct Professor of Internet Technology Law at
John Marshall Law School
1901 Prospector Avenue, Suite 200
Park City, UT 84060
(435)615-9205
by depositing same in the United States Mail, postage prepaid, on this 23rd day of
March 2007.
Joseph L. Kish
43
ORAL Argument Setting
Oral arguments before the 7th Circuit Court of Appeals set for Wednesday, June 6, 2007 at 9:30 a.m. Each side is limited to 20 minutes.
Oral Arguments
Oral arguments were held in Spamhaus' appeal of the Default Judgment.
There is no transcript, but the Court has released an MP3 file of the oral arguments.
In my opinion, the judges were harder on e360's attorney and he seemed a lot easier to fluster. Spamhaus wants the Court to create a brand spankin' new rule for situations like this one where the district judge knows that there is a jurisdictional question involving an international, non-profit defendant. That rule would say that the judge should do something more than accept the Plaintiff's bare assertion that he has jurisdiction. e360, of course, says "That's not how we do things here."
My take on this argument is that the appellate judges found Spamhaus' request pretty reasonable. What they didn't like was how Spamhaus "appears to have gamed the system" (their words, not mine) by moving the case to federal court, making an Answer subject to their objections to jurisdiction, and then "taking their balls and going home" (e360's words, not mine).
e360's argument was a "slippery slope" argument. "If we let them have this rule, then do district judges have to argue for a defendant at a default hearing" kind of thing. It was their major rebuttal to "what would you say if we made the rule and then sent it back with instructions to pay your legal costs to this point."
And that's your 40 minutes of oral arguments in a nutshell.
7th Circuit Opinion
The default judgment stays (e360: 1, Spamhaus 0)
The money judgment is overturned (e360: 1, Spamhaus: 11,715,000)
The injunction is overturned (e360: 1, Spamhaus: 11,715,001)
Important bits:
Page 12: "We perceive no error in the district court’s conclusion that Spamhaus intentionally elected to abandon its available defenses when it withdrew those defenses from consideration by the court and indicated that it was prepared to accept a default. Spamhaus’ then-counsel confirmed that it wished to “participate in the defense no further” and “do absolutely nothing.” See R.56-1 at 3, 5. It was not erroneous to treat this kind of voluntary abandonment of defenses, raised but not pursued, as a waiver."
Page 18: "Generally, this court will not reverse a damages award in a default judgment unless it is clearly excessive."
Pgs 18-19: "Mr. Linhardt’s affidavit is a conclusory statement of the lost value of his business, based largely on his calculations of lost future profits. It provides a list of businesses involved in “actual and pending contracts” and a total calculation of his calculation of loss, but says nothing about the status of his relationship with those businesses before e360 was listed on the ROKSO. That is, the affidavit claims profit loss in absolute numbers, but provides no information whatsoever to support a finding that such future profits were certain prior to Spamhaus’ act. Particularly given the difficulties that Illinois courts have acknowledged in proving non-speculative amounts of lost future profits, [citations omitted], this affidavit alone cannot provide the requisite “reasonable certainty” for a damages award without the necessity of a hearing. We therefore vacate the damages award and remand to the district court for a more extensive inquiry into the damages to which e360 is entitled."
Pg. 24: "According to the complaint, however, Spamhaus lists entities on the ROKSO for violating ISP terms of use, not “United States law.” The complaint does not allege that Spamhaus defamed e360 by claiming that e360 operated in violation of law. The facts supporting the default judgment, therefore, show only that e360 improperly was listed as a “spammer” by Spamhaus, applying Spamhaus’ own criteria. There is no basis in the judgment for an injunction that modifies Spamhaus’ generally applicable criteria for determining what entities qualify as spammers."
Now things will go back to the district court for redetermination of damages to be paid under the default.
[UPDATE -- Let me explain some things. The DEFAULT JUDGMENT still stands and that is a LOSS -- potentially a big one. Liability is NOT an issue since that is part of the default (so it's also part of that LOSS). The case is going back to the district court only to determine damages. Those damages may include money damages, and e360 may be able to prove that it is entitled to a large amount of money, but it will have to prove that in an adversarial context now, instead of the judge just blindly taking their word for it. And the 7th Circuit has now pretty much stated that the award is "excessive" (see the quote from page 18 above). The eventual final judgment may also include an injunction, BUT that injunction will NOT be able to change Spamhaus' own operational definitions and standards.
I never expected the default to get thrown out. That's an awfully high bar since Spamhaus was present in the case early on, and I've never heard "we got bad advice from our OTHER lawyers" pass a bar set that high. Spamhaus gave that a heroic try, but they lost that one. All that left was relief on the damages and injunction, both of which were granted.]
==============================
In the
United States Court of Appeals
For the Seventh Circuit
____________
Nos. 06-3779 & 06-4169
e360 INSIGHT, an Illinois
Limited Liability Co., and
DAVID LINHARDT,
Plaintiffs-Appellees,
v.
THE SPAMHAUS PROJECT,
a Company Limited by Guarantee
and Organized Under the Laws
of England also known as
THE SPAMHAUS PROJECT, LIMITED,
Defendant-Appellant.
____________
Appeals from the United States District Court
for the Northern District of Illinois, Eastern Division.
No. 06 C 3958—Charles P. Kocoras, Judge.
____________
ARGUED JUNE 6, 2007—DECIDED AUGUST 30, 2007
____________
Before RIPPLE, KANNE and EVANS, Circuit Judges.
RIPPLE, Circuit Judge. e360 Insight, LLC, and David Linhardt (collectively, “e360”) brought this action in the Cook County Circuit Court, alleging various tort claims against The Spamhaus Project (“Spamhaus”). Spamhaus removed the case to the United States District Court for
-2-
the Northern District of Illinois. Spamhaus answered the complaint and then, one month later, in open court, moved to withdraw its answer. The court granted that motion, as well as a motion by Spamhaus’ counsel to withdraw. Because Spamhaus had elected not to defend the action, the court also entered a default, issued a preliminary injunction and requested evidence from e360 to support a default judgment against Spamhaus. Upon receiving e360’s response, the court entered judgment, awarding to e360 $11,715,000 in damages, plus costs, and a permanent injunction. Spamhaus, then represented by new counsel, challenged the judgment in a Rule 60(b) motion to the district court. That motion was denied. Spamhaus timely appeals both the default judgment and the district court’s denial of its Rule 60(b) motion. For the reasons stated in this opinion, we affirm the entry of a default judgment, but vacate the award of damages and injunctive relief and remand for further proceedings consistent with this opinion.
I
BACKGROUND
A. Facts
Spamhaus is a non-profit company limited by guarantee and organized under the laws of the United Kingdom. It is an internet watchdog group in the business of identifying and blocking internet “spam,” or unsolicited bulk e-mail. In that capacity, it maintains the “Register Of Known Spam Operations” (“ROKSO”), a “3 strikes list” for internet users it believes are responsible for creating and distributing spam messages. R.1, Ex. A at 4. Through the ROKSO, Spamhaus publishes a sort of blacklist of persons or
-3-
businesses that have been thrown off a minimum of three internet service providers (“ISPs”) for violating the terms of use of the ISP; Spamhaus classifies persons or entities who have had at least “three strikes” as “spammers.” Although the process is not entirely clear from the record, it appears that ISPs can access Spamhaus’ ROKSO list (either directly or through the use of other anti-spam databases into which the ROKSO is integrated); if an ISP then elects, it can employ the ROKSO as part of its own screening process for incoming messages directed to its customers—its “spam filter.” That is, an ISP could see that a particular internet protocol (“IP”) address had been marked as a spammer on Spamhaus’ ROKSO and then, as a result, might refuse to allow a message sent from that IP address to reach the e-mail’s intended recipient.
e360 is an internet marketing company operated by David Linhardt out of Wheeling, Illinois. e360 maintains that, at the time it was listed on the ROKSO, it never had been excluded by an ISP. It also claims that it operates in accordance with ISP terms of use and within all applicable laws. e360 uses e-mail to market products for other businesses. The value of its service to the businesses it represents lies in its ability to reach potential individual customers for those businesses via e-mail.
In December 2003, Spamhaus placed e360 Insight, LLC, and Mr. Linhardt on the ROKSO list. e360 claims that it contacted Spamhaus to inform it that a mistake had been made, but nevertheless it remains on the ROKSO list. e360 also claims that Spamhaus cross-lists businesses who partner with companies and individuals on the ROKSO list and refuses to remove these partners from the blacklist until they terminate their relationship with the primary spammer on the ROKSO list.
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B. District Court Proceedings
e360 brought this action in state court, claiming that Spamhaus was liable in tort for losses e360 suffered as a result of its placement on the ROKSO. Specifically, the complaint alleged that Spamhaus’ placing e360 on the ROKSO list amounted to tortious interference with contractual relations, tortious interference with prospective economic advantage, defamation per se and defamation quod. It sought compensatory and punitive damages, as well as an injunction requiring Spamhaus both to remove e360 from the list and to place a notice on the Spamhaus website that e360 had been included on the ROKSO list in error.
Spamhaus removed the case to the district court on the basis of diversity of citizenship. Spamhaus then answered the complaint on July 21, 2006. In that answer, it denied many of e360’s allegations and asserted fourteen affirmative defenses. Among those defenses were lack of personal jurisdiction, insufficient process and insufficient service of process. R.6 at 8.
On August 23, 2006, counsel for both sides appeared before the district court at a status call. The court began addressing the issue of diversity of citizenship when then-counsel for Spamhaus interrupted the court and the following exchange ensued:
MR. BROWN [then-counsel for Spamhaus]: Your
Honor, if I may, before we get too far down what we
are talking about here today, I have been authorized
by my client to do precisely two things here this
morning; and, I do acknowledge that it is a bit of an
unconventional maneuver. My client wants to—
THE COURT: You represent who?
-5-
MR. BROWN: The defendant—
THE COURT: Okay.
MR. BROWN: Spamhaus.
And my client wants to participate in the defense no
further.
I am not authorized to do anything more today than
to ask this Court that the answer be withdrawn; and,
then, once we hear from this Court on that, to get a
ruling on our motion to withdraw as counsel.
[the Court engages counsel for the plaintiffs.]
THE COURT: All right.
Do you know whether your client has another law
firm in hand or what their position is?
MR. BROWN: My position—or my understanding—
from them is that they want to do absolutely
nothing.
So, I don’t know for certain—
THE COURT: Do they want to lose?
I mean, that is what is on the horizon if they want to
do nothing. You have to defend the case.
MR. BROWN: They have been fully informed of the
fact that the default judgment is a real possibility. And
they are aware of that and are prepared to take that
risk.
[exchange regarding motion to withdraw as counsel]
THE COURT: Okay.
Here is what we are going to do. I am going to give
you leave to withdraw the answer; I am going to give
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you leave to withdraw; and, in light of the fact that
your client is aware of that—and, apparently, has sent
no one here to disagree with the request to withdraw;
and, I assume you told them it was a dead-bang
certainty that default is going to be entered without
any resistance to the lawsuit—I am going to enter a
default order today.
[court reinstates TRO entered in state court]
THE COURT: [granting the motion to withdraw as
counsel]
And I will ask you, as your, if not your final act, at
least approaching finality, to let you[r] client know
what happened this morning. And tell them it is not
just a risk that they will lose the case, but it is a deadbang
certainty. And the first step has been undertaken
with the entry of a default.
But no judgment, just a default. Okay?
R.56-1 at 2-3, 6-7.
A week later, e360 filed a motion for a default judgment, supported by an affidavit from Mr. Linhardt that stated the amounts in which he believed his business had been harmed by being placed on the ROKSO. On September 13, 2006, the district court entered judgment and awarded the full amount of compensatory damages stated in Mr. Linhardt’s affidavit, $11,715,000.00, as well as $1,917.50 in costs. It denied attorney’s fees and punitive damages. The court also entered a permanent injunction, the details of which we shall examine shortly.
Spamhaus filed a timely Rule 60(b) motion to vacate the default and the default judgment. At the hearing on that motion, new counsel for Spamhaus articulated several
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bases for the motion. First, Spamhaus reasserted its challenge to “the fundamental power of the Court to exercise jurisdiction for default or other purposes over a UK-based Internet company.” R.56-4 at 7. According to Spamhaus, that defense could be “independently raise[d], [and] ha[d] nothing to do with whether the attorney appeared . . . or not. Because when they did appear, they properly asserted these defenses.” Id. at 7. Spamhaus also advised the district court that it had received conflicting legal advice and that its instruction that prior counsel withdraw was based on a misunderstanding of the applicable law. Finally, Spamhaus raised various objections to the propriety of the specific relief awarded. The district court gave the following response:
I do not think there was anything unknowing or
unintentional about the decision made not to defend
this case once it got over here at some point. . . .
. . . [T]he idea that Rule 60 accommodates at least
what may have seemed at the time an intelligent
decision—and an intentional one—should be used to
reopen the consequence of the decision, knowingly
made, I am not sure that is what Rule 60 is about.
Secondly, yes, we do have to have jurisdiction over
subject matter, as well as the person or presence of
a defendant in the first instance. There is no question
about that.
That was apparently, you say, pressed by way of an
affirmative defense—or, at least, it was suggested as an
affirmative defense, but not pressed.
. . . .
We do not undertake to take one side of a case and
look for, as meticulously as we can, for holes in the
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conduct of the party seeking some relief because the
other side has failed to defend this case, or at least
chose to abandon the defense of the case.
. . . .
So, I think it would be unfair to the plaintiff at this
point to, if you will, pretend as if none of these things
took place before; no opportunity to defend this case;
no decision made to knowingly abandon the defense;
and, then, start over and give somebody a brand new
track.
Id. at 8-10. Although briefing was requested by Spamhaus, the court immediately denied the motion.1
[1 Spamhaus also had moved to quash a citation to discover assets, arguing again the defense of lack of jurisdiction and improper service. The court responded simply: “That defense will not carry the day.” R.56-4 at 11.]
Spamhaus timely appealed both the entry of default judgment and the denial of its Rule 60(b) motion to vacate that judgment.
II
DISCUSSION
Spamhaus raises many challenges to the district court’s entry of default judgment, the character of the relief awarded and the failure of the court to grant its Rule 60(b) motion and to reopen for factual development certain of the issues decided in the default. Specifically, Spamhaus challenges the district court’s authority to enter a default judgment without affirmatively inquiring into the factual basis for personal jurisdiction and effective service.
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Spamhaus also claims that it may assert lack of jurisdiction and improper service in this court and be relieved of the default judgment. On the question of the specific relief awarded, Spamhaus challenges the district court’s calculation of damages based on Mr. Linhardt’s affidavit alone. It also challenges the grant of injunctive relief and claims that, as written, the injunction violates the First Amendment and is overbroad.
A. Validity of the Default
We review both the district court’s decision to enter a default judgment and the denial of a motion to vacate the judgment for an abuse of discretion. Homer v. Jones-Bey, 415 F.3d 748, 753 (7th Cir. 2005).
1. Personal Jurisdiction and Service
Default judgments rendered without personal jurisdiction are void and, therefore, we shall “set aside a default judgment as a per se abuse of discretion if the district court that entered the judgment lacked jurisdiction.” Swaim v. Moltan Co., 73 F.3d 711, 716 (7th Cir. 1996); see also Homer, 415 F.3d at 753; Robinson Eng’g Co. Pension Plan & Trust v. George, 223 F.3d 445, 448 (7th Cir. 2000); Bally Export Corp. v. Balicar, Ltd., 804 F.2d 398, 400 (7th Cir. 1986).
In support of its argument that the judgment is void, Spamhaus contends that the district court abused its discretion in entering judgment without first conducting an affirmative inquiry into whether it had personal jurisdiction over Spamhaus and whether service of process was effected in compliance with applicable rules. Spamhaus concedes that this court has not imposed an affirmative duty on the district court to inquire into the factual bases
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for jurisdiction or service prior to entering a default. Instead, at oral argument, Spamhaus asked this court to craft a special rule, applicable in cases involving a foreign, not-for-profit, internet-based defendant. Such a rule is justified, claims Spamhaus, by the emerging jurisprudence on internet-based entities and personal jurisdiction and by a series of other cases in which other courts have imposed such a duty in cases involving foreign defendants.2
[2 Spamhaus relies on System Pipe & Supply, Inc. v. M/K Viktor Kurnatovsky, 242 F.3d 322, 324 (5th Cir. 2001), Tuli v. Republic of Iraq, 172 F.3d 707, 712 (9th Cir. 1999), and Dennis Garberg & Associates, Inc. v. Pack-Tech International Corp., 115 F.3d 767, 771 (10th Cir. 1991), as well as several district court cases from within this circuit in which personal jurisdiction was examined by the court sua sponte prior to entering a default judgment.]
The cases on which Spamhaus relies involve foreign defendants who had not appeared in the action. See Dennis Garberg & Assocs., Inc. v. Pack-Tech Int’l Corp., 115 F.3d 767, 772 (10th Cir. 1997) (“[A] district court must determine whether it has jurisdiction over the defendant before entering judgment by default against a party who has not appeared in the case.” (emphasis added)). We need not decide whether we would impose the same rule on district courts in this circuit if faced with that situation because it is not the one we face here: Spamhaus removed the case, actually appeared through counsel in federal court and filed an answer specifically challenging personal jurisdiction.3
[3 Indeed, Spamhaus alternately asks this court to treat it as an appearing party; as we shall examine shortly, Spamhaus urges this court to hold that a supposed failure of the plaintiff to comply with certain notice requirements of Federal Rule of Civil Procedure 55(b)(2), which apply only where the defendant “has appeared in the action,” requires reversal.]
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We see no reason to require the district court to raise sua sponte affirmative defenses, which may, of course, be waived or forfeited, on behalf of an appearing party who elects not to pursue those defenses for itself. See TruServ Corp. v. Flegles, Inc., 419 F.3d 584, 589 (7th Cir. 2005) (noting that personal jurisdiction may be waived). For similar reasons, we do not believe that the district court was obligated to consider the validity of the judgment on jurisdictional grounds in its ruling on the Rule 60(b) motion. Nor do we see any reason why this court should reexamine the issue of personal jurisdiction. We acknowledge that under Rule 60(b)(4), a party generally may challenge a default judgment as void for lack of personal jurisdiction at any time. See Swaim, 73 F.3d at 717 (noting that this rule “recognizes that it is unfair to strip parties of a defense that may explain the omission that is potentially the basis for judgment against them”). However, that general rule does not preserve in perpetuity a party’s claim regarding personal jurisdiction, regardless of any strategy it pursues in the district court.
As is clear from its oral ruling on Spamhaus’ 60(b) motion, the district court interpreted its conduct preceding default as a waiver of the previously asserted defenses. See R.56-4 at 10 (noting that the court would not “pretend as if none of these things took place . . . [and there had been] no opportunity to defend this case[,] no decision made to knowingly abandon the defense”); id. at 8-9
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(“[T]he idea that Rule 60 accommodates at least what may have seemed at the time an intelligent decision—and an intentional one—should be used to reopen the consequence of the decision, knowingly made, I am not sure that is what Rule 60 is about. . . . [Spamhaus] chose to abandon the defense of the case.”). We review the factual determinations upon which a district court predicates a finding of waiver for clear error and the legal question of whether the conduct amounts to waiver de novo. Ernst & Young LLP v. Baker O’Neal Holdings, Inc., 304 F.3d 753, 756 (7th Cir. 2002).
We perceive no error in the district court’s conclusion that Spamhaus intentionally elected to abandon its available defenses when it withdrew those defenses from consideration by the court and indicated that it was prepared to accept a default. Spamhaus’ then-counsel confirmed that it wished to “participate in the defense no further” and “do absolutely nothing.” See R.56-1 at 3, 5. It was not erroneous to treat this kind of voluntary abandonment of defenses, raised but not pursued, as a waiver. See Johnson v. Zerbst, 304 U.S. 458, 464 (1938); Trs. of Cent. Laborers’ Welfare Fund v. Lowery, 924 F.2d 731, 732-33 (7th Cir. 1991) (noting that courts have recognized “privileged defenses referred to in Rule 12(h)(1)[] may be waived by ‘formal submission in a cause, or by submission through conduct,’ ” even before an answer is filed (quoting Marcial Ucin, S.A. v. SS Galicia, 723 F.2d 994, 996-97 (1st Cir. 1983)). Based on its conduct before the court, we have no doubt that Spamhaus understood the defenses available to it, consistently asserted those defenses in the early stages of those proceedings and then affirmatively elected to abandon those defenses before the district court. We see no reason to allow Spamhaus to escape the consequences of
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that decision in the later stages of this proceeding.4
[4 Spamhaus also claims that the district court had an affirmative obligation to find that the complaint was served consistent with the Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters, opened for signature Nov. 15, 1965, 20 U.S.T. 361 (appended to Fed. R. Civ. P. 4). Specifically, Spamhaus relies on Article 15 of the Convention, which provides, in pertinent part: “Where a writ of summons or an equivalent document had to be transmitted abroad for the purpose of service, under the provisions of the present Convention, and the defendant has not appeared, judgment shall not be given until it is established” that service was effected in a manner approved of by the Convention. The difficulty for Spamhaus is that, as we already have determined, it is not a defendant that “has not appeared.” It did appear in the action and raise improper service of process under the Hague Convention as an affirmative defense. It withdrew that defense along with the answer. Article 15, by its terms, does not apply to a party who has appeared. The court did not have an affirmative obligation, under these circumstances, to raise service of process on behalf of Spamhaus prior to entering the default.]
2. Notice of the Default Judgment
Spamhaus also claims that the default judgment entered was invalid because Spamhaus was not served with the written notice of the application for a default judgment as provided by Federal Rule of Civil Procedure 55(b)(2)5 and
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in a manner approved by Rule 5. Our review of the sufficiency of service of notice of a motion for a default judgment is de novo. Homer, 415 F.3d at 753. Spamhaus requests a remand to determine whether, as a factual matter, service was proper.
[5 Rule 55(b)(2) provides, in pertinent part:
If the party against whom judgment by default is sought has appeared in the action, the party (or, if appearing by representative, the party’s representative) shall be served with written notice of the application for judgment at least 3 days prior to the hearing on such application.
(emphasis added).]
A certificate of service attached to the motion for default and signed by an attorney for e360 states that service of the motion was effected in three ways: (1) electronic filing with the clerk of the court, “which will send notification of such filing” to listed attorneys with the firm that formerly represented Spamhaus; (2) “Federal Express via International Priority”; and (3) “caus[ing] to be hand delivered” to the Spamhaus Project. R.20 at 6. Under Local Rule 5.5(a)(1), this certification made by an attorney of record qualifies as proof of service. Accordingly, the remaining question is whether any of these methods of service was acceptable under Rule 5 of the Federal Rules.
Federal Rule of Civil Procedure 5 lists the acceptable methods of service of process under the Federal Rules. Included among the acceptable forms of service is:
(A) Delivering a copy to the person served by:
(i) handing it to the person;
(ii) leaving it at the person’s office with a clerk or
other person in charge, or if no one is in charge
leaving it in a conspicuous place in the office; or
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(iii) if the person has no office or the office is
closed, leaving it at the person’s dwelling house or
usual place of abode with someone of suitable age
and discretion residing there.
Fed. R. Civ. P. 5(b)(2)(A). In-hand delivery is, therefore, a specifically approved method of service under the Rules. Spamhaus’ conclusory allegation that “no authorized representative of Spamhaus has ever been properly served with in-hand delivery of any document,” Appellant’s Br. at 17, without more, does not defeat the proof of service provided to the district court, nor does it require this court to remand to allow further factual development in the face of a certificate of service by an officer of the court. Nor has Spamhaus cited any precedent in support of its contention that the record must contain more specific evidence “demonstrating how . . . service was purportedly perfected.” Id. at 16-17.
Moreover, although a party is not required to file a Rule 60(b) motion in the district court to raise challenges to the entry of a default judgment, this court has recognized that when a party does so, the failure to raise certain defenses specifically may waive those defenses for purposes of appeal of the underlying judgment. See Swaim, 73 F.3d at 718-19. Although our cases applying this rule have dealt with issues of personal jurisdiction, service to bring a party into the action and capacity to be sued, id., the logic employed in those cases applies with equal force to the particular defense of failure of notice under Rule 55(b). In each case, the request made on appeal from the underlying default judgment is that we remand for factual findings that would justify relief from the judgment because the district court has the special competence to make those findings of fact. See id. Sensibly, then, when a party chooses to move for relief from judgment under Rule 60(b) in the
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district court, that party should raise those defenses which require factual development that it anticipates raising in an appeal taken from the underlying judgment. As we stated in Swaim v. Moltan Co., 73 F.3d 711 (7th Cir. 1996), this approach
promotes the twin concerns of juridical efficiency and
respect for the unique factfinding capability of a
district court. . . . This is not to deny our jurisdiction to
entertain a direct appeal from a default judgment, see
28 U.S.C. § 1291, but when a party chooses to utilize the
attention and limited resources of a district court in a
motion under Rule 60(b), we think it just and proper
that it be required to put before the district court
whatever infirmities support setting aside the default
judgment. This brings to bear the district court’s
factfinding function and unique knowledge of the
case and maintains the court of appeals’ role as a
forum for resolving disputed questions of law—not
fact.
Id. at 719. In its 60(b) motion in this case, Spamhaus never asserted that e360 had failed to comply with the notice requirements of Rule 55 and that this failure justified relief from judgment. Its only contention regarding service of process was a failure of service to bring it into the case, in connection with its argument that the district court lacked in personam jurisdiction. Spamhaus now seeks an opportunity to offer countervailing proof on the issue of service of the motion for default judgment; that is an argument that Spamhaus should have addressed to the district court in the first instance when, as here, a Rule 60(b) motion challenging the default judgment also was filed.
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Because the jurisdictional challenges Spamhaus now seeks to raise have been waived and neither the district court nor this court has the duty to resurrect them, the district court did not abuse its discretion in entering judgment of liability nor in denying the motion for Rule 60(b) relief. Accordingly, we affirm the district court’s judgment on liability.
B. Remedial Issues
Spamhaus asserts that the district court erred in entering judgment in an amount of more than $11 million on the basis of Mr. Linhardt’s affidavit alone. It also cites a host of objections to the district court’s entry of injunctive relief. We consider each of its objections in turn.
1. Damages
As we have noted, at the hearing in which Spamhaus withdrew its answer and prior counsel withdrew their appearance, the district court informed e360 that it would be required to prove up its damages. At minimum, according to the court, the affidavit of a knowledgeable person would be required. In response, e360 filed a formal motion for default judgment and attached Mr. Linhardt’s affidavit. In his affidavit, Mr. Linhardt stated that e360 had lost “actual and pending contracts,” the value of which he had calculated to be $2,465,000. R.20, Ex. A at 6. He further stated that he had lost “numerous opportunities to obtain future work” and that he had calculated “the lost value of the business as a result of the inability to monetize the revenue potential from the company and in the lost enterprise value to be at least $9,250,000.” Id. He then
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provided a cursory statement of his calculation of the lost value to his enterprise. On the basis of this evidence, the district court entered judgment for compensatory damages in the full amount requested, more than $11 million.
Generally, this court will not reverse a damages award in a default judgment unless it is clearly excessive. Merrill Lynch Mortgage Corp. v. Narayan, 908 F.2d 246, 253 (7th Cir. 1990). A default judgment establishes, as a matter of law, that defendants are liable to plaintiff on each cause of action alleged in the complaint. United States v. Di Mucci, 879 F.2d 1488, 1497 (7th Cir. 1989). We also have stated, however, that,
[e]ven when a default judgment is warranted based on
a party’s failure to defend, the allegations in the
complaint with respect to the amount of the damages
are not deemed true. The district court must instead
conduct an inquiry in order to ascertain the amount
of damages with reasonable certainty.
In re Catt, 368 F.3d 789, 793 (7th Cir. 2004) (citing Credit Lyonnais Sec. (USA), Inc. v. Alcantara, 183 F.3d 151, 155 (2d Cir. 1999)). Under the law of this circuit, judgment by default may not be entered without a hearing on damages unless “the amount claimed is liquidated or capable of ascertainment from definite figures contained in the documentary evidence or in detailed affidavits.” Dundee Cement Co. v. Howard Pipe & Concrete Prods., Inc., 722 F.2d 1319, 1323 (7th Cir. 1983) (collecting authority).
Mr. Linhardt’s affidavit is a conclusory statement of the lost value of his business, based largely on his calculations of lost future profits. It provides a list of businesses involved in “actual and pending contracts” and a total calculation of his calculation of loss, but says nothing
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about the status of his relationship with those businesses before e360 was listed on the ROKSO. That is, the affidavit claims profit loss in absolute numbers, but provides no information whatsoever to support a finding that such future profits were certain prior to Spamhaus’ act. Particularly given the difficulties that Illinois courts have acknowledged in proving non-speculative amounts of lost future profits, see, e.g., SK Hand Tool Corp. v. Dresser Indus., Inc., 672 N.E.2d 341, 348 (Ill. App. Ct. 1996); see also TAS Distrib. Co. v. Cummins Engine Co., ___ F.3d ___, 2007 WL 1704114, No. 05-1371, slip op. at 12-16, (7th Cir. June 14, 2007) (collecting Illinois authority on the difficulty of proving lost future profits as damages), this affidavit alone cannot provide the requisite “reasonable certainty” for a damages award without the necessity of a hearing.6 We therefore vacate the damages award and remand to the district court for a more extensive inquiry into the damages to which e360 is entitled.
[6 We do not believe that the fact that the district court declined the request for punitive damages and attorney’s fees demonstrates, as e360 asserts, that it undertook an adequate evaluation of the evidence of damages presented to it. As is made clear by the court’s order, it believed that absent countervailing evidence from Spamhaus, the affidavit justified the full amount of compensatory damages requested. Given the nature of the damages sought and the conclusory statements in the affidavit, we cannot say that this scrutiny was sufficient.]
2. Injunctive Relief
Spamhaus also raises a number of challenges to the district court’s entry of a permanent injunction. Under the terms of the injunction, Spamhaus is prohibited from
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(1) “tak[ing] any action to cause email sent by Plaintiffs or their affiliates, subsidiaries, or related companies owned or controlled by Plaintiffs to be blocked, delayed, altered, or interrupted in any way, (including, without limitation, by listing Plaintiff’s [sic] on Spamhaus’ ROKSO list . . . ) unless Spamhaus can demonstrate by clear and convincing evidence that Plaintiffs have violated relevant United States law”; (2) listing other networks owned or operated by e360 as spammers without demonstrating that the clear and convincing standard had been met; and (3) contacting “any customers or suppliers” of e360 “in efforts to cause said customers or suppliers to cease doing business” with e360 or to “allege or assert that Plaintiffs are spammers or other like term.” R.24 at 2. The injunction also requires that Spamhaus post a notice on its website that e360 was erroneously listed as a spammer and that it is not a spammer. The language of this notice was to be approved by e360, was to occupy a one inch by one inch space on the website and was to remain in place for six months. See id. We review the court’s entry of a permanent injunction for an abuse of discretion. eBay Inc. v. MercExchange, L.L.C., 126 S. Ct. 1837, 1839 (2006).
a.
First, Spamhaus contends that the district court’s entry of a permanent injunction should be vacated because the court never considered whether injunctive relief was appropriate and, in its order granting such relief, failed to comply with Rule 65 in setting forth reasons for its issuance. See Fed. R. Civ. P. 65(d).
As we already have stated, although a default judgment establishes liability, it does not answer whether any
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particular remedy is appropriate. See Di Mucci, 879 F.2d at 1497 (“Because . . . liability was established by default, the law in this circuit indicates that in a case such as this, an evidentiary hearing may be required to establish what type of relief is necessary.” (emphasis added)). This principle applies with equal if not greater force in the context of equitable relief, for which the law imposes a requirement that the party seeking the injunction demonstrate the inadequacy of legal relief. See Walgreen Co. v. Sara Creek Property Co., B.V., 966 F.2d 273, 275 (7th Cir. 1992) (“The plaintiff who seeks an injunction has the burden of persuasion--damages are the norm, so the plaintiff must show why his case is abnormal. . . . [W]hen, as in this case, the issue is whether to grant a permanent injunction . . . the burden is to show that damages are inadequate . . . .”).
The district court concluded that e360’s success by default and the failure of Spamhaus to interpose objections to relief simply entitled e360 to a permanent injunction. We conclude that a more substantial inquiry by the district court was necessary prior to the entry of equitable relief. See eBay, 126 S. Ct. at 1839 (“According to well-established principles of equity, a plaintiff seeking a permanent injunction must satisfy a four-factor test before a court may grant such relief. A plaintiff must demonstrate: (1) that it has suffered an irreparable injury; (2) that remedies available at law, such as monetary damages, are inadequate to compensate for that injury; (3) that, considering the balance of hardships between the plaintiff and defendant, a remedy in equity is warranted; and (4) that the public interest would not be disserved by a permanent injunction.”); see also Fed. R. Civ. P. 65(d) (“Every order granting an injunction and every restraining order shall set forth the reasons for its issuance . . . .”).
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Absent some statement explaining the necessity of injunctive relief, we are hampered in our review of the district court’s exercise of its equitable powers. See United States v. Jordan, 485 F.3d 982, 985 (7th Cir. 2007) (noting that, for the Court of Appeals to exercise properly its review function over a discretionary determination, “the record should reflect an exercise of discretion based on the evidence and the applicable legal standard”); United States v. Cunningham, 429 F.3d 673, 679 (7th Cir. 2005) (“[W]henever a district judge is required to make a discretionary ruling that is subject to appellate review, we have to satisfy ourselves, before we can conclude that the judge did not abuse his discretion, that he exercised his discretion, that is, that he considered the factors relevant to that exercise.”). 7 The proceedings leading to the entry of the injunction were deficient, and, therefore, remand is necessary for the district court to consider the propriety of any injunctive relief.
[7 The origin of the injunctive relief was a temporary restraining order (“TRO”) issued in state court before the case was removed. We are unpersuaded by e360’s contention that, because the state court conducted an appropriate inquiry, no independent inquiry into the propriety of injunctive relief was required of the district court before issuing a preliminary and then a permanent injunction. In any event, the state proceedings, aside from the TRO itself, are not of record in this matter, and we see no evidence in the record that indicates that they were fully before the district court.]
b.
As currently written, the injunction suffers from independent legal infirmities. It fails to comply with “the rule
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requiring courts to tailor injunctive relief to the scope of the violation found.” Nat’l Org. for Women, Inc. v. Scheidler, 396 F.3d 807, 817 (7th Cir. 2005), rev’d on other grounds, 547 U.S. 9, 23 (2006). On its face, the relief awarded does not bear a legitimate relationship to the facts necessary to support the entry of a default judgment.
In our evaluation of the injunction, we are mindful that it followed a default judgment, and, therefore, we take as true the facts of the complaint. See Black v. Lane, 22 F.3d 1395, 1399 (7th Cir. 1994). In this case, the facts upon which the judgment is supported demonstrate only that at the time that Spamhaus initially posted that e360 was a “spammer”—the posting upon which the cause of action was based—the posting was false. That the label was false when originally posted does not mean that, applying Spamhaus’ generally applicable criteria for determining what a spammer is, e360 ought to be given a free pass for all time. Rather, it simply means that, whatever the initial factual basis Spamhaus had used to list e360 on the ROKSO, Spamhaus may not rely on that basis in the future.
If Spamhaus were to discover additional evidence that e360 meets the ROKSO criteria and subsequently were to place e360 on the ROKSO on the basis of that new evidence, Spamhaus would be entitled to a separate judicial determination that this new label is in fact false and that it is liable for defamation. An injunction that bars Spamhaus from referring to e360 as a spammer prospectively, without taking account of the actual grounds for liability in this action, is not tailored to the scope of the violation. For the same reason, the injunction’s requirement that Spamhaus post notice to the effect that e360 is not a spammer cannot be sustained. Whether e360 is now a spammer is not a fact determined by the default judgment. The fact determined
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by the judgment is that e360 was not a spammer when Spamhaus so identified it on the date of the action giving rise to the complaint.
The injunction as written would allow Spamhaus, under certain circumstances, to place e360 on the ROKSO in the future. Those circumstances, however, are an insufficient answer to the overbreadth of the injunction because they too bear no reasonable relationship to the facts of liability. Specifically, the injunction states that Spamhaus may designate e360 as a spammer if Spamhaus can demonstrate by “clear and convincing evidence” that e360 has violated “United States law.” According to the complaint, however, Spamhaus lists entities on the ROKSO for violating ISP terms of use, not “United States law.” The complaint does not allege that Spamhaus defamed e360 by claiming that e360 operated in violation of law. The facts supporting the default judgment, therefore, show only that e360 improperly was listed as a “spammer” by Spamhaus, applying Spamhaus’ own criteria. There is no basis in the judgment for an injunction that modifies Spamhaus’ generally applicable criteria for determining what entities qualify as spammers. Moreover, the injunction places the burden on Spamhaus to prove the legitimacy of future statements through the lens of the clear and convincing standard; this formulation effectively presumes that Spamhaus’ future conduct is tortious before there has been any opportunity for an appropriate judicial inquiry.
Finally, although we decline to address them fully in the context of this injunction that we already have determined cannot stand, we note that there are sensitive First Amendment issues presented in the context of permanent injunctions in defamation actions. See generally Erwin
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Chemerinsky, Injunctions in Defamation Cases, 57 Syracuse L. Rev. 157 (2007) (arguing from tradition and precedent that permanent injunctive relief should never be available as a remedy in a defamation action). “[P]ermanent injunctions—-i.e., court orders that actually forbid speech activities—are classic examples of prior restraints.” Alexander v. United States, 509 U.S. 544, 550 (1993); see also United States v. Raymond, 228 F.3d 804, 815 (7th Cir. 2000). Accordingly, “[t]he usual rule is that ‘equity does not enjoin a libel or slander and that the only remedy for defamation is an action for damages.’ ” Cmty. for Creative Non-Violence v. Pierce, 814 F.2d 663, 672 (D.C. Cir. 1987) (quoting Kukatush Mining Corp. v. SEC, 198 F. Supp. 508, 510-11 (D.D.C. 1961)). We have not addressed squarely the availability of injunctive relief in defamation cases. Although the Supreme Court recently granted certiorari to address the question in the context of public figures in Tory v. Cochran, 544 U.S. 734 (2005), the Court ultimately vacated the injunction in that case on ground of overbreadth, as we do here. Following the Court’s approach, we vacate the injunction as written and express no opinion on the constitutional validity of any new, narrowed injunctive relief the district court might think appropriate after considering all of the relevant factors. Id. at 738-39; see also American Family Mut. Ins. Co. v. Roth, 485 F.3d 930, 934 (7th Cir. 2007) (noting, after holding an injunction overbroad, that “rather than try to work out the details of a proper injunction,” we should “remand the case to the district court for the entry of a better-drafted injunction”).
Conclusion
The district court’s conclusion that issues of jurisdiction and service of process were waived by Spamhaus’ con-
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duct preceding the entry of the default judgment is not clearly erroneous. We therefore affirm the judgment as to liability and the denial of the motion for relief under Rule 60(b). We further conclude, however, that the district court failed to undertake an inquiry into the proof of damages and the necessity of injunctive relief and issued an injunction that is overbroad. We affirm the entry of a judgment of default. We vacate, however, that portion of the court’s order granting e360’s requests for relief and remand for proceedings consistent with this opinion. The parties shall bear their own costs in this court.
AFFIRMED in part;
VACATED and REMANDED in part
A true Copy:
Teste:
_____________________________
Clerk of the United States Court of
Appeals for the Seventh Circuit
USCA-02-C-0072—8-30-07
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| 9thCirOpinion.pdf | 06/28/09 1:05 pm | 145.72 KB |
Orders on Multiple Motions
United States District Court, Northern District of Illinois
Name of Assigned Judge
or Magistrate Judge Charles P. Kocoras Sitting Judge if Other
than Assigned Judge
CASE NUMBER 06 C 3958 DATE 10/31/2006
CASE
TITLE
e360 Insight et al vs. The Spamhaus Project
DOCKET ENTRY TEXT
Motion hearing held on 10/31/2006. As discussed in open court, defendant’s motion [43] to vacate default judgment is denied. Defendant’s motion [45] for a stay of enforcement of judgment pending appeal is denied. Defendant’s motion [41] to quash citation to discover assets is denied. Defendant is ordered to comply with citation to discover assets.
Docketing to mail notices.
00:10
Courtroom Deputy
Initials:
SCT
Motion to Stay Enforcement
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
e360 INSIGHT, LLC, an Illinois Limited Liability Company, and DAVID LINHARDT, an individual,
Plaintiffs,
v.
THE SPAMHAUS PROJECT, a company limited by guarantee and organized under the laws of England, a/k/a THE SPAMHAUS PROJECT, LTD.,
Defendant.
DEFENDANT’S MOTION FOR A STAY OF ENFORCEMENT OF JUDGMENT PENDING APPEAL
NOW COMES the Defendant The Spamhaus Project, by and through its attorneys Jenner & Block LLP, and requests that this Court stay the enforcement of the judgment entered against Defendant pending appeal pursuant to the Federal Rules of Appellate Procedure 8(a)(1)(A) and Federal Rule of Civil Procedure 62 (b) and (d).1
In support of this Motion, Defendant states as follows:
1. On June 21, 2006, Plaintiff e360 INSIGHT, LLC filed suit against the Defendant in the Circuit Court of Cook County, Illinois County Department, Chancery Division, alleging claims for tortious interference with contract, tortious interference with prospective economic advantage, defamation per se, and defamation per quod. Because the parties are of diverse
=============
1 Defendant expressly objects to this Court’s jurisdiction over The Spamhaus Project because it is based solely in the United Kingdom and does not conduct or transact business in Illinois. Moreover, Defendant reserves its arguments based on Plaintiff’s failure to properly effect service of process. These objections are made notwithstanding Defendant’s filing of this motion, and had previously been raised in the Notice of Removal and the Answer that was withdrawn with leave of this Court.
=============
citizenship and the complaint seeks damages for injunctive relief and punitive damages exceeding $75,000, this Court has subject matter jurisdiction. On The Spamhous Project’s Notice of Removal, the case was removed to the United States District Court for the Northern District of Illinois, Eastern Division, on July 21, 2006.
2. In the Notice of Removal, filed on July 21, 2006, Defendant maintained that service had not been perfected against it. Further, Defendant filed an Answer that same day, expressly asserting its defenses based on a lack of personal jurisdiction and insufficient service of process.
3. On August 23, 2006, this Court granted Defendant’s Motion to Withdraw the appearances of prior counsel and its oral Motion for Leave to Withdraw its Answer to the Complaint. At the same time, this Court granted Plaintiff’s oral Motion for Entry of Default and converted the Temporary Restraining Order, entered on July 20, 2006 by the Circuit Court of Cook County, into a Preliminary Injunction.
4. On September 13, 2006, this Court entered an Order for Default Judgment in favor of Plaintiff and against Defendant.
5. On October 13, 2006, Defendant filed a Notice of Appeal in the Court of Appeals for the Seventh Circuit, while expressly reserving its objections based on this Courts lack of personal jurisdiction and Plaintiff’s failure to effect proper service of process.
6. On October 26, 2006, Defendant also filed with this Court a Motion to Vacate the Entry of Default Judgment based on Rule 60(b). Among the arguments raised in that Motion, Defendant asserts that this Court lacks personal jurisdiction over The Spamhaus Project and that service of process was insufficient.
7. Under Federal Rule of Civil Procedure 62(b) and (d) and Federal Rule of Appellate Procedure 8(a)(1)(A), this Court has authority to enter a stay of the default judgment pending the appeal and its own ruling on Defendant’s Motion to Vacate.
WHEREFORE, Defendant The Spamhaus Project respectfully requests that this Court enter an order staying enforcement of the default judgment pending a decision on Defendant’s Motion to Vacate or a final determination on its appeal. Defendant further requests that this Court waive the requirement of a supersedeas bond based on the Motion to Vacate filed contemporaneously with this Motion to Stay.
Respectfully submitted,
THE SPAMHAUS PROJECT
Dated: October 26, 2006 By: __s/Matthew M. Neumeier_
Matthew M. Neumeier
Craig C. Martin
Carrie A. Fino
JENNER & BLOCK LLP
330 North Wabash Avenue
Chicago, IL 60611
Telephone: (312) 222-9350
Facsimile: (312) 527-0484
Motion to Vacate
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
e360 INSIGHT, LLC, an Illinois Limited Liability Company, and DAVID LINHARDT, an individual,
Plaintiffs,
v.
THE SPAMHAUS PROJECT, a company limited by guarantee and organized under the laws of England, a/k/a THE SPAMHAUS PROJECT, LTD.,
Defendant.
DEFENDANT’S MOTION TO VACATE DEFAULT JUDGMENT AND FOR LEAVE TO FILE A MEMORANDUM IN SUPPORT
NOW COMES the Defendant The Spamhaus Project, by and through its attorneys Jenner & Block LLP, and in support of this Motion1 to Vacate the Default entered on August 23, 2006 and the Default Judgment entered on September 13, 2006, states as follows:
1. On September 13, 2006, this Court entered an order for default judgment in favor of Plaintiff and against Defendant, including a permanent injunction.
2. Pursuant to Federal Rules of Appellate Procedure 3 and 4(a)(3), the Notice of Appeal was due on October 13, 2006. Defendant retained Jenner & Block, LLP on that same day. The Notice of Appeal was timely filed to preserve any appeal relating to the entry of the default judgment. See e.g., Sharma v. Sprint Commc’n Co., No. 97-1513, 1997 U.S. App.
=================
1 Defendant expressly objects to this Court’s jurisdiction over The Spamhaus Project because Defendant is based solely in the United Kingdom and does not conduct or transact business in Illinois. Moreover, Defendant reserves its arguments based on Plaintiff’s failure to properly effect service of process. These objections are made notwithstanding Defendant’s filing of this Motion, and had previously been raised in the Notice of Removal and Answer to the Complaint that was withdrawn with leave of this Court.
=================
LEXIS 30148, at *2 (7th Cir. Oct. 29, 1997) (holding that a motion to vacate does not toll the time for filing a notice of appeal); Hope v. United States, 43 F.3d 1140, 1143 (7th Cir. 1994) (holding that Rule 60(b) motions do not toll the time for filing a notice of appeal).
3. This Court retains jurisdiction and the authority to grant this Motion to Vacate notwithstanding the pending appeal. See e.g., Brown v. United States, 976 F.2d 1104, 1110-11 (7th Cir. 1992) (holding that “parties may file motions under Rule 60(b) in the district court while an appeal is pending”). In Brown, the Seventh Circuit directed that the district court “review such [60(b)] motions promptly, and either deny them or, if the court is inclined to grant relief, to so indicate so that we may order a speedy remand.” Id. Brown has been widely recognized and followed in the Northern District of Illinois. See e.g., Whitehead v. Gateway Chevrolet, No. 03 C 5684, 2004 U.S. Dist. LEXIS 11979, at *1 (N.D. Ill. June 28, 1999) (Conlon, J.); United States v. Antonelli, No. 97 CR 194, 1999 U.S. Dist. LEXIS 4115, at *1 (N.D. Ill. March 22, 1999) (Gottschall, J.); Stephan v. Rocky Mountain Chocolate Factory, Inc., No. 96 C 4587, 1997 U.S. Dist. LEXIS 2655, at *1 (N.D.Ill. March 7, 1997) (Shadur, J).
4. The appeal in the Seventh Circuit is still at an early stage of the proceedings, with the Appellant’s brief being due on November 27, 2006. Thus, the appeal will not be fully briefed until at least January 2007. However, if this Court decides to vacate the default judgment, the issue currently on appeal becomes moot and need not be decided by the Seventh Circuit. See e.g., Brown, 976 F.2d at 1110-11.
5. Jenner & Block LLP has been retained for less than two weeks. Although the undersigned attorneys have not had sufficient time to complete their factual investigation and analysis of all the issues raised by this Court’s rulings to date, at a minimum, we believe that Federal Rules of Civil Procedure 60(b)(1), (4), and (6) provide adequate grounds to vacate the default judgment. Furthermore, a complete review of this Court’s rulings to date has been restricted in part because the transcripts from this Court’s proceedings are not yet available, even though they have been ordered.
6. Based on our current knowledge, we believe that Federal Rule of Civil Procedure 60(b) provides three pertinent grounds to vacate the default judgment. First, under Rule 60(b)(1), the default judgment may be vacated because of excusable neglect, inadvertence, and/or mistake because Defendant’s conduct prior to the default judgment was not willful, but rather was based on confusion regarding United States’ court procedures, exasperated by the fact that Defendant is a United Kingdom corporation. Second, under Rule 60(b)(4), the default judgment may be vacated because this Court lacks personal jurisdiction over Defendant and Plaintiff failed to effect proper service of process. The jurisdictional statements alleged by Plaintiff in the Complaint are insufficient to demonstrate a prima facie showing of general personal jurisdiction based on “doing business” in Illinois. Finally, under Rule 60(b)(6), the default judgment may be vacated for any other reason justifying relief, and vacating the default judgment in this case would be manifestly in the interest of justice.
7. For example, for purposes of Rule 60(b)(6), there are multiple grounds for vacating the default judgment. First, Plaintiff’s Complaint facially fails to allege facts sufficient to support the elements of the causes of action, because it is based primarily on conclusory statements of opinion and law, not facts. Furthermore, the damages were awarded without a hearing, findings of fact, or a sufficient evidentiary basis for the award. In particular, the affidavit submitted by Plaintiff in support of the damages request is invalid on its face, because it consists merely of speculation, opinions, legal conclusions and purported expert testimony without any demonstration of expertise, let alone adherence to Daubert standards. The magnitude of the award of damages, including damages for injury to reputation, is based solely on unsupported and inadmissible affidavit testimony of the party in interest, and thus suggests a clear deviation from accepted principles of common law and federal procedure.
8. Moreover, the terms and scope of the permanent injunction do not fully comply with the requirements of Federal Rule of Civil Procedure 65, in that it is vague, overbroad, lacks specificity and adopts an evidentiary standard that is not consistent with federal law. Furthermore, an award of injunctive relief was not warranted in this case because Plaintiff failed to demonstrate irreparable harm or the lack of an adequate remedy at law, and no findings support such relief. The injunctive relief awarded in the default judgment thus applies an improper legal standard and improperly shifts the burden of proof onto Defendant.
9. In addition, the permanent injunction prohibits Defendant from expressing its opinion as to what conduct constitutes “spamming,” and whether companies should conduct or transact any business whatsoever with Plaintiff. Thus, if enforced, the injunction would constitute an improper prior restraint on Defendant’s freedom of speech under the First Amendment. Likewise, the portion of the injunctive order requiring Defendant to publish, on its own website, an opinion that Plaintiff is not a “spammer” also violates Defendant’s rights under the Free Speech Clause.
10. Most importantly, the Defendant believes it has meritorious defenses that in the interest of justice require a trial on the merits, should this Court conclude that it possesses personal jurisdiction. See Passarella v. Hilton Int’l Co., 810 F.2d 674, 675 (7th Cir. 1987) (recognizing that there is a “well-established policy favoring a trial on the merits over a default judgment.” (quoting C.K.S. Eng’r, Inc. v. White Mountain Gypsum Co., 726 F.2d 1202, 1205 (7th Cir. 1984))).
11. In light of the limited time that counsel has been involved in this case and the fact that counsel has not had access to the transcripts from the prior court proceedings, the Defendant respectfully requests that this Court grant the Defendant additional time to file its Memorandum in Support of this Motion. Defendant therefore respectfully requests that the Court set a briefing schedule on the Motion to Vacate.
WHEREFORE, Defendant The Spamhaus Project respectfully requests that this Court grant leave to file its Memorandum in Support of this Motion and enter an order vacating the default entered on August 23, 2006 and the default judgment entered on September 13, 2006.
Respectfully submitted,
THE SPAMHAUS PROJECT
Dated: October 26, 2006 By: s/Matthew M. Neumeier_________
Matthew M. Neumeier
Craig C. Martin
Carrie A. Fino
JENNER & BLOCK LLP
330 North Wabash Avenue
Chicago, IL 60611
Telephone: (312) 222-9350
Facsimile: (312) 527-0484
MOTION for Leave to File Status Report
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
e360 INSIGHT, LLC, an Illinois Limited
Liability Company, and DAVID LINHARDT,
an individual,
Plaintiffs,
v.
THE SPAMHAUS PROJECT, a company
limited by guarantee and organized under the
laws of England, a/k/a THE SPAMHAUS
PROJECT, LTD.,
Defendant.
DEFENDANT’S MOTION FOR LEAVE TO FILE INSTANTER A STATUS REPORT
Defendant The Spamhaus Project (“Spamhaus”),1 by and through its attorneys Jenner &
Block LLP, respectfully moves this Court for the entry of an order granting Spamhaus leave to
file instanter the 4-page Status Report attached as Exhibit A. In support of this motion,
Spamhaus states that a dispute has arisen between the parties regarding the scope of the
injunction order entered by the Court and Spamhaus respectfully desires to advise Your Honor
regarding the nature of that dispute.
[1 Defendant expressly objects to this Court’s jurisdiction over The Spamhaus Project because
Defendant is based solely in the United Kingdom and does not conduct or transact business in
Illinois. Moreover, Defendant reserves its arguments based on Plaintiffs’ failure to properly
effect service of process.]
Respectfully submitted,
THE SPAMHAUS PROJECT
Dated: June 25, 2007 By: s/ David Jiménez-Ekman _________
Craig C. Martin
David Jiménez-Ekman
Carrie A. Fino
JENNER & BLOCK LLP
330 North Wabash Avenue
Chicago, IL 60611
Telephone: (312) 222-9350
Facsimile: (312) 527-0484
CERTIFICATE OF SERVICE
I, Carrie A. Fino, an attorney, hereby certify that I served the foregoing Defendant’s
Motion for Leave to File Instanter a Status Report upon:
Bartly Joseph Loethen
Synergy Law Group, L.L.C.
730 West Randolph Street
6th Floor
Chicago, IL 60661
Phone: (312) 454-0015
Fax: (312) 454-0261
by depositing a copy of same in the United States Mail, postage prepaid, on this 25th day of June
2007.
s/ Carrie A. Fino
| Attachment | Date | Size |
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| MotionLeaveStatusReport.pdf | 06/28/09 1:05 pm | 13.02 KB |
Status Report
I suppose that it's possible that all that poor, SBL-listed Virtumundo wanted was to have someone look at their processes and pronounce them clean, but given the demand by e360's attorneys to remove their SBL listing, I think it's beyond obvious what e360's new business model is: Try to SBL-proof clients for as long as the injunction holds out.
But, you look at the proof and decide for yourself:
===========================================
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
e360 INSIGHT, LLC, an Illinois Limited
Liability Company, and DAVID LINHARDT,
an individual,
Plaintiffs,
v.
THE SPAMHAUS PROJECT, a company
limited by guarantee and organized under the
laws of England, a/k/a THE SPAMHAUS
PROJECT, LTD.,
Defendant.
STATUS REPORT
Defendant The Spamhaus Project (“Spamhaus”)1 files this status report to advise Your Honor about a dispute that has arisen between the parties regarding the scope of the Court’s injunction order.
[1 Defendant expressly objects to this Court’s jurisdiction over The Spamhaus Project because
Defendant is based solely in the United Kingdom and does not conduct or transact business in
Illinois. Moreover, Defendant reserves its arguments based on Plaintiffs’ failure to properly
effect service of process.]
In short, plaintiff e360 Insight, LLC (“e360”) has taken the position that entities who become customers of e360 are covered by the language in the injunction order covering e360’s “affiliates, subsidiaries or related companies owned or controlled by Plaintiffs” – even though the companies have no relationship to e360 other than as its customer, and even though the companies were not an affiliate at the time the injunction order was entered. Plaintiffs appear to be trading on the Court’s injunction order by actually advertising and marketing their asserted ability to bring a new customer within the scope of the injunction order in an effort to obtain more customers.2 Because Spamhaus believes in good faith that customers who form nothing more than a contractual relationship with e360 after the Court’s injunction order was entered are not within the scope of that order, Spamhaus has declined e360’s request to remove addresses owned by those customers from the SBL. While Spamhaus does not seek any affirmative relief from the Court, Spamhaus desires to ensure that the Court is fully advised about the dispute.
[2 Spamhaus recently became aware that e360 is advertising various services to assist other
marketers with protection from Spamhaus. (Ex. A.) These “solutions” include: (1) TargetMX
Permission Email Solution; (2) Multichannel Lead Generation; (3) List Management and List
Rental; and (4) Date Enhancement. (Id.) Thus, e360 is actively marketing (by purchasing a
sponsored link on Google) a way for marketers to be protected from Spamhaus. In fact, an
internet search on Google of the term “Spamhaus” leads to a sponsored link for e360. (Ex. B.)
This advertisement states: “Problems With Spamhaus? Read how e360 helps clients verify
permission & remove SBL listings. www.e360insight.com.” (Id.)]
Here is some additional detail on the current dispute:
On June 15, 2007, counsel for e360 wrote counsel for Spamhaus and demanded that Spamhaus remove from its list of known spammers certain IP addresses owned by a company named Virtumundo. (Ex. C, letters r