AOL Wins Victory Over Spammers

The ISP wins a legal round against CN Productions, a long-running nemesis notorious for sending pornographic e-mails to AOL members.

by Erin Joyce Managing Editor of www.atnewyork.com [December 18, 2002]

America Online has won a legal victory against a long time nemesis, CN Productions, which AOL has repeatedly accused of spamming its members with a daily barrage of pornographic e-mails.

The ISP said a U.S. District Court in Virginia has awarded it close to $7 million in statutory damages in connection with its ongoing complaint against CN Productions, formerly of Rockford, Illinois. The company has been fighting for at least four years to get CN Productions to stop spamming its members.

In ruling for AOL, a federal court also broadened the scope of a prior injunction AOL had won, helping AOL's quest to break the back of an international spam ring. The group has repeatedly sent porn-related spam to AOL members, the company charged, even after a federal judge slapped one of the alleged spam participants with an injunction barring the activity.

The latest ruling was made under Virginia's anti-spam law, which allows companies to sue companies for "malicious" spamming that includes sending out masses of unsolicited e-mails to recipients who did not request them. AOL had already won a monetary judgment against CN Productions as a result of an injunction it won in 1999 permanently barring the company and its president, Jay Nelson, from sending any spam to AOL members.

But AOL had to go back to court in 2001 to request a contempt of court citation against the company and its principals after AOL charged they were spamming members again.The complaint said CN Productions continued spamming AOL members for more than a year, even after a court slapped an injunction on it barring it from transmitting hundreds of millions of unsolicited junk e-mail messages, in this case ones advertising adult websites.

AOL called the company's actions "part of a complex conspiracy designed to knowingly violate" the court's injunction. In addition to the original defendants cited in the contempt action, AOL pointed the finger at more than a dozen individuals it alleged were co-conspirators working with Nelson to allegedly violate the court injunction.

The complaint charged that CN Productions and its conspirators had:

• transmitted over 1 billion junk e-mail messages to AOL and its members
• accounted for 25 percent of all junk e-mail complaints about adult websites that AOL received over a two year period
• generated as much as $8 million in illegal gains
• attempted to conceal its illegal scheme from the courts and AOL through "perjury, obstruction of justice, and elaborate, illicit, offshore financial transactions designed to purposefully circumvent U.S. laws and AOL's anti-spam filters"

As the world's largest ISP, with about 35 million members, AOL is no stranger to spam companies, especially CN Productions. In March of 1998, it named the company among its "10 Most Wanted Spammers". It has won about twenty lawsuits seeking to shut spammers down, using federal copyright statutes, the Computer Fraud and Abuse Act, and Virginia's Computer Crimes Act to chase away spammers.

AOL called the latest ruling against CN Productions important because it was the first case in which statutory damages have been awarded under the amended Virginia anti-spam statute. The law (Va. Code Ann. ss. 18.2-152.1 et seq.) calls for spammers to be assessed fines upwards of $25,000 for each day they send unwanted spam.

Randall Boe, executive vice president and general counsel of AOL, called the case an important legal victory that also sent an important message, noting, "AOL is prepared to use all of the legal and technological tools available to shut down spammers who inundate the mailboxes of AOL members with unwanted and often offensive junk e-mail."

Meanwhile, AOL says its members are becoming more savvy about using new spam-reporting tools in AOL 8.0. The software includes a "report spam" button that immediately identifies the offending spammer to the ISP. AOL said that since the launch of 8.0 in October, the amount of spam e-mail reported by AOL members has increased tenfold, from roughly 200,000 spam emails previously reported daily to as many as two million reported daily. The company said that as a result, it has been able to reduce spam by as much as 20 percent.

But the update on the long-running case and the order of magnitude increase of AOL's own spam complaints help illustrate new research that shows the growing extent of the spam problem. MessageLabs, an e-mail filtering software provider, recently predicted that spam will far exceed legitimate messages in the coming year. Brightmail, a spam filtering service for Internet service providers, also estimates that e-mail spam now accounts for close to 40 percent of all e-mail traffic per day.

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