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Facebook awarded $711 million in spam lawsuit

October 30, 2009

Judge Jeremy Fogel of the U.S. District Court of the Northern District of California granted Facebook's application for a default judgment against Wallace for violating the Can-Spam Act, which bans "false and misleading" marketing e-mails. Fogel also found that Wallace "willfully violated" a temporary restraining order and preliminary injunction issued in the case and referred the matter to the U.S. Attorney's Office for prosecution of criminal contempt.

"The record demonstrates that Wallace willfully violated the statutes in question with blatant disregard for the rights of Facebook and the thousands of Facebook users whose accounts were compromised by his conduct," Fogel wrote in his judgment order, which also permanently prohibits Wallace from accessing the Facebook Web site or creating a Facebook account, among other restrictions.

Facebook said the order should serve as a strong deterrent against spammers.

"While we don't expect to receive the vast majority of the award, we hope that this will act as a continued deterrent against these criminals," Sam O'Rourke, Facebook's lead counsel for litigation and intellectual property, wrote in a Facebook blog post. "This is another important victory in our fight against spam. We will continue to pursue damages against other spammers."

Facebook sued Sanford and two others in February alleging they used phishing sites or other means to fraudulently gain access to Facebook accounts and used them to distribute phishing spam throughout the network.

Wallace earned the nicknames "Spamford" and "spam king" for his past role as head of CyberPromotions, a company responsible for sending as many as 30 million junk e-mails a day in the 1990s.

In May 2008, Wallace and another defendant were ordered to pay $234 million following a trial at which Wallace repeatedly failed to turn over documents or even show up in court.

Wallace has also been previously sued by the Federal Trade Commission and companies such as AOL and Concentric Network. In May 2006, Wallace and his company were ordered by a federal court to turn over $4.1 million.

As large as it is, the Facebook judgment against Wallace is not the largest for a case brought under the Can-Spam Act. Late last year, the federal court in San Jose awarded Facebook $873 million in damages against a Canadian man accused of spamming users of the site.


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