Judge awards ISP $1 billion in spam damages

IDG News Service - Antispam activists disagree about whether a $1.08 billion judgment Friday against three spammers in Iowa will discourage others from sending unsolicited bulk e-mail.
Judge Charles Wolle, with the U.S. District Court for the Southern District of Iowa, awarded what is believed to be the largest spam judgment ever to Robert Kramer, owner of CIS Internet Services, an Internet service provider in Clinton, Iowa. Kramer accused the three companies of sending his 5,000-customer ISP millions of pieces of spam between August and December 2003.
Wolle, using an Iowa antispam law and a U.S. racketeering law, ordered Cash Link Systems Inc. in Hollywood, Fla., to pay Kramer $360 million; AMP Dollar Savings Inc. in Mesa, Ariz., to pay $720 million; and TEI Marketing Group Inc. in Palm Harbor, Fla., to pay $140,000. The Iowa spam law allows damages of $10 per spam sent, plus punitive damages.
Kramer doesn't expect to collect the entire judgment, but he hopes to collect at least enough money to cover the damages caused by the spam, said his lawyer, Kelly Wallace, of Wellborn and Wallace LLC in Atlanta. The damages total "several hundred thousand dollars," and the spammers have "considerable assets," Wallace said.
"This is the best kind of law you can practice on the civil side," said Wallace, whose law firm specializes in suing spammers. "You feel good at the end of the day. We're putting spammers out of business."
But Laura Atkins, president of the antispam group SpamCon Foundation, questioned whether the award would actually stop many spammers. The three companies are likely to pay a small fraction of the judgment, she said, and many spammers are based in Florida because the law there allows those filing bankruptcy to keep significant assets.
Another factor may make collection difficult in this case. Cash Link Systems, which used unsolicited e-mail to advertise a cashless ATM, had its assets seized in July by the U.S. Securities and Exchange Commission. The SEC accused Cash Link Systems of conducting a fraudulent investment scheme.
The judgment was the largest against a spammer that Atkins can recall, and she said it may cause some small-time spammers to think twice after seeing the judgment, but will not affect large-scale spammers. The defendants "will file for bankruptcy, they'll reincorporate under a new name, and they'll move on."
Spam prosecutions resulting in jail time, such as a Virginia case in November that included a jail sentence of nine years, would be more effective in discouraging other spammers, Atkins said. "Spammers can avoid the judgment, but