The US District Court for the Northern District of Illinois said that e360's calculations of the damages it was owed – which ranged from an initial $11m and at one point reached $135m - could not be relied on. It said that Spamhaus should only have to pay out $27,000.
E360 claimed that it lost business because of its inclusion on Spamhaus's list of companies allegedly responsible for junk email, or spam. It also claimed defamation because of that inclusion.
UK-based Spamhaus said that a US court had no jurisdiction to try it and made no argument in court, meaning that a default judgement was registered against it for the claimed $11m.
Spamhaus did respond to the suit when moves were made to collect the $11m and an appeals court ordered that the claimed damages be examined more closely.
The Court found that e360 was responsible for the sending of 6.6 billion emails containing adverts or product offers from its clients. The man behind e360, David Linhardt, calculated the damages in a way that was "fundamentally unsound", the Court said.
Email advertising is often paid for on the basis of how many recipients click on an ad or how many eventually make a purchase.
"Linhardt’s first method of ascertaining damages for lost revenue consisted of what he described as a 'very simple' calculation: the revenue generated by a completed email transaction multiplied by the number of blocked messages," said the Court's ruling. "Though that formula is indeed simple and straightforward, a closer examination of the numbers employed in arriving at the eventual damage figure Linhardt cites reveals that it is fundamentally unsound."
The Court said that none of Linhardt's calculations were based on solid evidential ground. "None of these figures was the product of expert testimony or use of a scientific or reliable methodology, nor based on relevant or supportable factual premises. As a result, none of the above amounts can be relied on or be a reasonable basis upon which to base a damage award," said the Court.
The Court said that Linhardt's constantly shifting claims undermined his case. "The unreliability of Linhardt’s approaches is unmistakably demonstrated by the profound differences in claimed damages proffered at various points during these proceedings," the ruling said.
Linhardt claimed up to $135m, yet his own accounts for several companies combined, not just e360, show that they made profits of just $332,000 spread across five years.
"It strains credulity that a company that made only a fraction of the profits Linhardt asks for over the course of its five-year lifespan would have garnered profits in the amounts Linhardt set out in his testimony or documentary evidence," said the ruling. "
The Court did find that e360 had ongoing contracts with three customers when Spamhaus put it on its list and that this did cause those contracts to end. But because the email marketing business was not one in which deals lasted long, the Court said that e360 only had a right to payment equivalent to earnings for one month's income from those three customers, which was $27,000.
The company was only awarded a nominal $1 in damages for the defamation claim. "Linhardt’s testimony on the extent of the damage he and e360 experienced in this regard was speculative and conclusory and did not have any probative value that would permit assessment of a sum certain," said the ruling.
