on the cover / By Ryan Burns

Rise and Fall of a Spam Crusader

Over the next five years Singleton and ASIS filed a steady stream of lawsuits against a variety of alleged spammers. As with the targets of Singleton’s ADA suits, plaintiffs often chose to settle confidentially out of court because, guilty or not, it’s usually cheaper than going to trial. White estimates that during this period she netted $40,000-$50,000 per year from settlement revenues. (She wouldn’t say how much she paid Singleton.) By her calculations, these payoffs still didn’t make up for what she’d spent fighting spam over the previous decade. In fact, White viewed herself as an activist fighting for the greater good. And with spammers showing no signs of retreat, the battle had no end in sight. Until Azoogle.

“This one case that backfired — this is the only case where the judge wasn’t sympathetic to our point of view,” White said.

Spammers are cagey. The good ones, anyway, the ones who get away with it. And over the years it has become increasingly difficult to define just who’s a spammer and who’s not. Here’s one common system: Business interests, legitimate and otherwise, are constantly looking for potential customers, or “leads,” as they’re often called in sales. Rather than seek these customers directly, companies often employ “lead vendors” who offer e-mail addresses that have been collected by marketing specialists. Azoogle is such a specialist. These marketing specialists, in turn, contract with “affiliates” who resort to their own means of gathering leads. These affiliates sometimes hire affiliates of their own. So while companies like Azoogle may have anti-spam policies in place — as Azoogle, in fact, does — it becomes virtually impossible to guarantee that none of the leads they’re selling came from some ne’er-do-well spammer who hacked his way into a listserv. Critics of this system point out that such diffuse responsibility works to the advantage of everyone involved — except the consumer.

Cut to 2005, the height of the housing boom. No business interests in the world were more desperate for leads than mortgage companies, with new ones popping up daily and offering no-documentation home loans to virtually anyone they could find, however they could find them. ASIS’s case against Azoogle, which was initiated on Dec. 12, 2005, as “ASIS Internet Services v. Optin Global, Inc., et al.,” alleged that each of the 20-odd plaintiffs had either sent, commissioned or facilitated misleading, unsolicited mortgage-related e-mails to ASIS customer addresses, many of which hadn’t been active for a year or more. Gradually, through settlements and discovery, all the plaintiffs except Azoogle were eliminated. Azoogle wanted to fight the charges.

Venkat Balasubramani, a Seattle-based lawyer who specializes in commercial and intellectual property disputes as well as media and technology, frequently blogs about CAN-SPAM litigation and has chronicled the legal ups and downs of ASIS. Speaking generally, Balasubramani said that small ISPs like ASIS tend to go after companies that are easy to find but not necessarily the true culprits. “If I’m a smaller ISP and I can easily trace somebody who’s sending an e-mail, those aren’t the real troublemakers,” he said. “It’s [more likely] somebody in a foreign country, using sophisticated tools to mask their identity.” The obvious targets are also the ones with deep pockets, he said.

A key turning point in CAN-SPAM litigation came with a 2007 decision in the case of Gordon v. Virtumundo. Ruling in favor of the defendant (an online marketing firm), a Seattle district court judge found that plaintiff James Gordon’s so-called Internet business was little more than a shell used for filing CAN-SPAM lawsuits. In a landmark ruling, the court awarded Virtumundo $111,000 in attorneys’ fees, slamming Gordon’s operation as a “litigation factory” and calling his lawsuit “ill-motivated, unreasonable and frivolous.” After the trial, according to news reports, Virtumundo sent a collections lawyer to Gordon’s house with a moving van and a sheriff. The lawyer offered to go away if Gordon would agree to drop his appeal, and when Gordon refused, the collections agency proceeded to clear out the contents of his house. (He probably should have acquiesced; the Ninth Circuit Court ultimately upheld the ruling.)

The Gordon case proved significant in ASIS v. Azoogle for two reasons — first, judges thereafter were wary of frequent CAN-SPAM litigants, especially small ISPs; and second, the case established specific guidelines to determine liability. In order for a plaintiff to have standing to sue, the court said, they must show not only that the defendant was responsible for the spam in question but also that the spam caused some sort of measurable harm — crashing their system, for example, or forcing the company to upgrade its filtering software.

In the case versus Azoogle, Judge Joseph Spero ruled that ASIS had met neither of those requirements. It hadn’t suffered any measurable damage and it failed to establish a solid connection between the mortgage spam and Azoogle. “Rather,” Spero ruled, “it is apparent that ASIS sued Azoogle based on little more than speculation that there might be a connection between those e-mails and Azoogle.” The Ninth Circuit Court upheld the ruling on appeal with an unpublished disposition, and Spero ultimately granted Azoogle’s counter-motion for sanctions against ASIS, ordering White to pay the company $806,978.84 in attorneys fees — far more than she’d made in all her previous settlements combined.

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