A lawsuit filed in the name of the Federal CAN-SPAM Act backfired on the plaintiff to the tune of $111,000. This is thought to be the first verdict to award legal fees to a defendant falsely accused of spamming.
And thus, a deterrent for future actions of plaintiffs viewed as abusing the court system.
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.
