Judge Jeremy Fogel ruled that Adam Guerbuez and Atlantis Blue Capital violated the CAN-SPAM Act, and should pay Facebook the huge sum as a result.  Court costs may get tossed in, too.

 

On the Facebook Blog, Max Kelly, the company’s directory of security, responded by saying, "It’s unlikely that Geurbez and Atlantis Blue Capital could ever honor the judgment rendered against them (though we will certainly collect everything we can)."

But Guerbuez and Atlantis Blue Capital are also supposed to stay away from Facebook and its users in just about every way imaginable, and Kelly continued, "[W]e are confident that this award represents a powerful deterrent to anyone and everyone who would seek to abuse Facebook and its users."

The statement seems fair enough – spammers are trying to make money, not get sued into homelessness.  Facebook users should cross their fingers and hope for a tangible effect as we head into a prime shopping and spamming season.

Kilbride got a stiffer sentence, says the Department of Justice for obstructing justice "by attempting to prevent a government witness from testifying at trial." The DOJ didn’t say whether it was one of three "co-conspirators," one of eight citizen spam recipients from Massachusetts, Texas, Iowa, California and Arizona, or other witnesses.

After the passing of the CAN-SPAM Act in 2003, Kilbride and Schaffer logged into remote servers in Amsterdam to make it appear the messages were coming from outside the US. They were actually sent from Phoenix.

Evidence at trial established that they set up a shell corporation in the Republic of Mauritius, and were funneling proceeds to offshore accounts there, as well as on the Isle of Man.

Show there’s no honor among spammers, three "co-conspirators," Jennifer Clason, 32, of Tempe, Ariz.; Andrew Ellifson, 31, of Scottsdale, Ariz.; and Kirk Rogers, 43, of Manhattan Beach, Calif., all turned on Kilbride and Schaffer in court, and pleaded guilty for their roles in the operation.

The millions of unsolicited messages sent had fake headers and domain names, and included hard core pornography images in the emails themselves in order to entice recipients to sign up for memberships. Some were viewed by recipients’ children, even after filters were set up to block such content.

James S. Gordon and Omni Innovations, his company, brought suit against Virtumundo, Inc. and AdKnowledge, Inc., alleging violation of CAN-SPAM. Gordon’s case was thin, though, thin enough that the court mocked him the ruling that ordered him to pay the attorneys’ fees and costs of the defendants.

Gordon has filed multiple lawsuits alleging spam violations, enough that the court called his company a "spam business," set up to profit from litigation. In the documents, the court said the "Plaintiffs are assembling a litigation factory, which if successful, could net millions of dollars in profit, at least theoretically."

It gets worse. US District Judge John C. Coughenour had a few more choice words for Gordon:

"Plaintiffs’ instant lawsuit is an excellent example of the ill-motivated, unreasonable, and frivolous type of lawsuit that justifies an award of attorneys’ fees to Defendants."

"Instant lawsuit." Sounds like something you could pick up at Wal-Mart. Add greed and stir.

At his Technology & Marketing Law blog Eric Goldman notes that making plaintiffs pay the legal fees of defendants if found to be frivolous should deter future weak CAN-SPAM suits in the future. But, there is still a problem inherent in the system itself, he says:

More generally, I remain frustrated that so much regulatory attention is focused on curbing marketers’ abuse while comparatively little attention is given to curbing marketing plaintiffs’ abuse. But make no mistake–every new anti-marketing law with a private right of action will stir up more action than some chum thrown into shark-infested waters.

Interest has swirled around ValueClick, as companies like DoubleClick, Right Media, 24/7 Real Media, and aQuantive have been snapped up by bigger firms. Andy Beal sees that interest cooling for the moment:

While experts believe ValueClick is in fact following the CAN-SPAM law, until the investigation is complete, I doubt any suitor would want to take their hand in marriage.

Interest from the FTC has centered on “certain ValueClick websites which promise consumers a free gift of substantial value, and the manner in which the Company drives traffic to such websites, in particular through email.”

Until that little bombshell slipped into ValueClick’s inbox, the company said it had no knowledge the FTC was investigating it for any reason.

Despite the attention from the FTC, shares of ValueClick continued to enjoy a boost today. Shares were up $3.20 to $33.20 at press time.