$236Million and $1Billion Awarded to Company for Spam Damage
Written by Carl E. Reid on October 6, 2008Apparently, people can no longer hide behind their companies when local spam laws are broken. This is a case where a huge amount of money was awarded and must be paid by a husband and wife team whose business income was solely based on sending out spam email advertisements. Robert W. Kramer, III, owner and operator of CIS Internet Services, has received a $236 million dollar judgment against two individual defendants, Henry Perez and Suzanne Bartok following trial for violation of Iowa’s anti-spam statute. The verdict was entered on September 30, 2008 in the United States District Court, Southern District of Iowa, Davenport Division, by Judge John A. Jarvey.
Mr. Kramer was represented by Cedar Rapids attorney, Matthew L. Preston, with the Brady & O’Shea, P.C. law firm.
The Court found that husband and wife Perez and Bartok sent over 23 million emails advertising mortgage loan refinancing services to CIS computers in 2003.
This judgment is unique in that corporate officers Perez and Bartok were held personally liable and not protected by the limited liability of their corporation. The Court found that: “While Bartok may not have been the ‘person’ hitting the ‘send’ button to create the spam e-mail, she was half owner of a business whose sole source of income was predicated on illegal spamming.”
Kramer said, “I’m very pleased with this substantial ruling. I hope it sends the appropriate message that spamming will not be tolerated. There will likely always be spammers and spam, but this ruling makes it clear they risk an economic death penalty and exposure to public ridicule.”
Prior to this judgment, CIS and Robert W. Kramer III had won substantial awards from other email spammers.
Back in 2004 Grant Gross reported that Robert Kramer III accused Cash Link Systems of sending his ISP 60,000 pieces of spam a day, and AMP Dollar Savings of sending 120,000 pieces of spam a day, between August and December 2003. TEI Marketing Group, marketing software buyers could use to “find out anything about anyone,” was accused of sending the ISP 1,400 spam messages. Judge Charles Wolle, with the U.S. District Court for the Southern District of Iowa, awarded US$1Billion to Robert Kramer and his company CIS. It is believed to be the largest spam judgment ever, to Robert Kramer, owner of CIS Internet Services, an ISP (Internet service provider) based in Clinton, Iowa. Kramer accused the three companies of sending his 5,000-customer ISP millions of pieces of spam between August and December 2003.
John Levine, a board member of the Coalition Against Unsolicited Commercial Email, said the US$Billion judgment could help educate spammers and judges about spam law. “This should help get the message across that spamming is illegal, that you can actually get in trouble … if you do it,” said Levine, also chairman of the Internet Research Task Force’s antispam group.
The case is also an opportunity to show judges the damage spam does, Levine said. “Spam law is so new,” he added. “That’s one educated judge, and 10,000 to go.”
The lawsuit may also allow Kramer’s ISP to seize the computers owned by the spammers, slowing their opportunity to start a new spamming business, Levine said.
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This will be overturned on appeal, definitely. The fact is that local law do not preempt state or federal laws, and by those, what these people were doing was L E G A L! Now, I hate spam as much as others…. but wouldn’t they be more apt spending their time tracking down the people who do these Nigerian spams that trick people into sending their own money to some jackass overseas.
Kramer just lost a spam case stemming from his 2004 case. In his decision, the judge noted that Kramer’s allegations were not credible and that Kramer had a history of bad faith dealings on the internet.