EarthLink wins $16M settlement in spam case

A district court in Atlanta on Wednesday awarded Internet service provider EarthLink Inc. US$16 million in damages against a New York state man that it alleged used illegal means to send out more than 825 million unsolicited e-mail messages, commonly referred to as "spam."

The court also permanently banned the defendant from spamming and from a host of other activities related to spamming such as distributing mass e-mail software and selling e-mail addresses, according to Pete Wellborn, outside legal counsel for EarthLink and the company's lead litigator in the spam case.

In a statement Wednesday morning, Atlanta, Georgia-based EarthLink said that a ring led by one Howard Carmack obtained Internet accounts using stolen credit cards, identity theft and bank fraud, then used those accounts to send out reams of spam.

Carmack could not be reached for comment.

Carmack used the accounts of family members, including a brother, and those of third parties to mask his activities, sending out by-now familiar spam e-mail for "work at home" and "get rich quick" schemes and cable television descramblers, according to Wellborn.

"This was the worst of the worst of the worst of what you see in spam," he said.

The company first began investigating the spam ring in March 2002 following what it described as a "spike" in spam e-mail from the Buffalo, New York area.

By October, an EarthLink team led by Mary Youngblood, EarthLink's network abuse team manager, identified and contacted a number of individuals involved in the ring with Carmack. Those people fingered Carmack as the ring leader.

EarthLink pursued Carmack and shut down several accounts he used. However, Carmack's spamming activities continued to be "a big enough nuisance" that EarthLink turned to the courts for relief, according to an EarthLink spokeswoman.

Carmack did not appear in court in Atlanta on Wednesday, nor was he represented by legal counsel, according to Wellborn.

Referring to conversations he had with Carmack, Wellborn said that the defendant did not appear to take the charges against him seriously.

"He thumbed his nose at the lawsuit and me and the judicial system. He told me 'Nothing is in my name so you'll never catch me.'"

Without opposing counsel and armed with sworn affidavits from one of Carmack's business associates and his own brother concerning his illegal spamming activity, EarthLink's attorneys had little trouble convincing the judge to rule against Carmack.

Wellborn said the ruling was a "best case scenario" for EarthLink and Internet users weary of spam e-mail messages.

"The court's permanent injunction protects Internet users everywhere and the $16 million damages award sends a message to everyone out there that if you keep spamming there will be a financial death penalty," he said.

Faced with a flood of spam e-mail, major ISPs such as EarthLink have increasingly used the courts, in addition to antispam technology, to stem the tide of junk messages.

In April, America Online Inc. filed five separate lawsuits against alleged spammers as part of its antispam campaign.

Those lawsuits, filed in AOL's home state of Virginia, charge over a dozen companies and individuals with sending an estimated one billion spam messages to AOL members.

Individuals from the states of Washington and Maryland were named in that case, in addition to a number of "John Does."

And in another sign of the increasingly litigious environment surrounding the issue of spam, a nonprofit antispam group said Wednesday that it created a legal fund to assist those involved in spam litigation.

The fund, launched by the SpamCon Foundation, will help defend antispammers caught up in lawsuits.

The first beneficiaries of the fund will be the defendants named in a case brought by EMarketersAmerica.Org, Inc., an association representing e-mail marketers, against, which publishes e-mail blacklists, according to SpamCon.

SpamCon will also be forming a legal advisory board to help select cases and hopes to help shape the evolving laws and legal principles regarding spam, the organization said.

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