Opinion
CIVIL ACTION FILE NO. 1:02-CV-3041-TWT
May 7, 2003
ORDER
WHEREAS this Court has entered judgment on behalf of Earthlink, Inc. ("EarthLink") on the basis of its Motion For Default Judgment And Permanent Injunction; and
WHEREAS it appears to this Court that EarthLink is entitled to permanent injunctive relief to protect it, its users, and all other Internet users from the illegal activities detailed in EarthLink's Complaint, including credit card fraud, bank fraud, spamming, spoofing, and other violations,
IT IS HEREBY ORDERED that Carmack shall be and is hereby PERMANENTLY ENJOINED under penalty of Criminal and Civil Contempt from engaging in "Prohibited Conduct" as that term is defined below until such time as this injunction may be modified by this Court.
I. SCOPE OF "PROHIBITED CONDUCT" AND OTHER DEFINITIONS
1. "EarthLink" refers to EarthLink, Inc. and its agents, officers, contractors, directors, shareholders, employees, subsidiary companies or entities, affiliated or related companies and entities, assignees, and successors-in-interest.
2. "Defendant" or "Carmack" refers to Defendant Howard Carmack.
3. "Defendant-Related Company" refers to any person or corporation (past, present, or future) in relation to whom/which Defendant is, whether by title or de facto, an agent, officer, contractor, director, owner, shareholder, employee, advisor, partner, or the like.
4. "EarthLink e-mail address" refers to any and all e-mail addresses maintained by, registered with, or maintained at or with facilities, resources, or equipment owned or operated by or on behalf of EarthLink. These include all e-mail addresses associated with a domain name composed in whole or in part by "EarthLink" or "MindSpring."
5. "Internet e-mail address" refers to any and all e-mail addresses on the Internet, including those maintained by, registered with, or maintained at or with facilities, resources, or equipment owned or operated by or on behalf of any Internet Services Provider ("ISP"). As used herein, the term "ISP" shall include all entities within the scope of "interactive computer service" ("ICS") as that term is defined in 47 U.S.C. § 230(e)(2) and includes but is not limited to providers and sellers of Internet-related e-mail services.
6. "E-mail," "electronic message," and all similar terms shall be given the broadest possible construction herein. Each such term shall include, but not be limited to, e-mails and other such messages (including "Instant Messages" and the like) effected by use of, or with the assistance of, or via access to the resources, equipment, and/or computer system of any ISP.
7. "EarthLink subscriber" refers to any Internet user with an EarthLink e-mail address.
8. "Internet subscriber" refers to any Internet user with an Internet e-mail address.
9. "Prohibited Conduct" shall refer to the following categories of conduct, several of which are wholly-contained subsets of the afore-described blanket prohibition against Internet use/connectivity:
A. Spamming and Co-Spamming. Causing, authorizing, participating in, or intentionally or recklessly assisting or enabling others in the sending of any commercial or promotional messages or solicitations (i.e. "Prohibited Messages") via e-mail to any EarthLink e-mail addresses and/or to any other Internet e-mail addresses. "Spamming" and "Co-Spamming" shall also include the posting of any commercial or promotional messages to any newsgroup, bulletin boards, or the like, the intended subject of which is non-commercial and/or which is devoted to a topic unrelated to such postings.
B. Spoofing and Co-Spoofing. Causing, authorizing, participating in, or intentionally or recklessly assisting or enabling others in the use of any false or misleading reference to:
(1) any ICS, ISP, or Internet subscriber;
(2) any Internet e-mail address, domain, or domain owner;
(3) the equipment of that ISP, ICS, Internet subscriber, or domain owner; and/or
(4) that ICS's, ISP's, or Internet subscriber's computer system or resources in any electronic message or in a newsgroup posting. The conduct prohibited by this paragraph includes, but is not limited to, the insertion of false or misleading originating e-mail addresses, return or reply e-mail addresses, and/or the manual manipulation or falsification of any e-mail header.
C. Cloaking, Co-Cloaking, and Relay. Causing, authorizing, participating in, or intentionally or recklessly assisting or enabling others in the modification, disguise, elimination, or erasure of the identification of the originating address and/or header of or for any commercial or promotional e-mail sent to an EarthLink subscriber or to an Internet subscriber, or otherwise aiding or assisting in any way the attempts of the sender of any commercial or promotional e-mail to an EarthLink or Internet subscriber to make impossible or more difficult the identification of the sender. Among the conduct expressly prohibited by this paragraph is any intentional use of "third-party relay" in relation to the sending of e-mail, as well as any access to or use of the computer resources of any ISP or internet subscriber not related to or in privity of contract with the sender and/or the recipient of the relevant e-mail or electronic message.
D. Software Distribution. The sale, offer, or other distribution of any e-mail-related software that does not include code (which code cannot be disabled by the user) the effect of which is to prevent the user from using the software to send mass e-mails to any EarthLink or Internet subscriber or otherwise engaging in any Prohibited Conduct.
E. Sale Of E-Mail Addresses. The sale, offer, or other commercial distribution of any e-mail address or addresses of any EarthLink or internet subscribers.
F. Trade Libel. Causing, authorizing, communicating, or intentionally or recklessly assisting others in communicating defamatory verbal and electronic statements regarding EarthLink's or any other ISP's products, business goods and/or services.
G. No EarthLink Accounts or Access. Signing-up for, establishing, or otherwise maintaining any EarthLink account or e-mail address, or otherwise accessing or using in any way the computer system, resources, servers, and/or equipment of EarthLink, even if such access or use would otherwise be legal.
II. PRIVATE ENFORCEMENT OF THIS INJUNCTION
A. Liquidated Damage And Effect of Violation
1. Acknowledgment of Third-Party Beneficiaries
All Internet subscribers, domain owners, ICS's and ISP's are intended, express third-party beneficiaries of this Injunction. In the event that a violation of this Injunction by Carmack results in harm to any such third-parties, the aggrieved ICS/Internet-subscriber/domain-owner/ISP shall have and may properly assert against Carmack any and all rights under this Injunction in relation to said harm as could EarthLink, in the event that EarthLink had been the victim of said harm.
2. Liquidated Damages
In the event of any violation by Carmack of this Injunction, upon proof of such violation before this Court or any other Court of competent jurisdiction, Carmack shall be liable for the following liquidated damages:
a. Claim By ISP
In the event the claim is asserted by an ICS or ISP, liquidated damages of the GREATER of $25,000 or $2.00/1000 e-mails sent, corresponding to the claimant's reputation and lost profit damages only (i.e., the claimant may also prove and recover its other categories of damages in addition to the liquidated damages for reputation/lost profits). The claimant shall also recover its associated attorney's fees, expenses, and costs.
b. Claim By End-User
In the event the claim is asserted by an individual end-user, domain owner, or Internet subscriber (i.e., a victim end-user on the Internet), liquidated damages of $1,000/e-mail, plus all associated attorney's fees, expenses, and costs.
c. Right To Waive Liquidated Damage Rights
In the event that Carmack's violation of this Injunction injures or aggrieves more than one domain owner, Internet subscriber, ISP, or ICS, Carmack shall be liable to each such party in the full amount of the specified damages. Any party aggrieved by Carmack's violation of this Injunction shall have the right to waive its liquidated damage-related rights hereunder and instead prove and recover its actual damages in relation to that category or type of damages (as well as any other legally-cognizable damages it suffers).
B. Proof of Violation
In a civil action arising from an alleged violation by Carmack of this Injunction, proof of the violation may be established by a preponderance of the evidence.
SO ORDERED.
FINDING OF FACT CONCLUSIONS OF LAW AND JUDGMENT FINDINGS OF FACT
I. Liability-Related Facts
A. Overview of The Case And Parties
Plaintiff EarthLink is a Delaware Corporation with a principal place of business at 1375 Peachtree Street N.E., Atlanta, Fulton County, Georgia 30309. Defendant Carmack is a Buffalo, New York resident, whose intentional and illegal acts were intended to and did cause harm to EarthLink in the State of Georgia. Carmack's last-known address is 341 Parkridge Ave., Buffalo, New York 14215. (Verified Complaint at ¶ 1).
B. The Internet E-mail: An Overview
1. The Internet E-mail — Generally
The acts complained of herein by EarthLink were committed by Carmack through his use of the Internet. Sometimes called the "Information Superhighway," the Internet is a complex communications network that links private and public computer networks, systems, and individuals. It consists of computers and computer databases connected primarily through telephone lines, fiber optic cables, and other high-speed dedicated lines. A small portion of the components of the Internet are owned by governmental organizations. (Verified Complaint at ¶ 4).
Most components, however, are proprietary and are owned and/or administered by "Internet Service Providers" ("ISPs"). ISPs own computers, telecommunication lines, and other devices that enable their customers to obtain various services including Internet access and the ability to communicate with other Internet users via electronic mail ("e-mail"). In many ways, the Internet resembles our highway transportation system. The phone lines are similar to highways over which goods are transferred from one location to another. Likewise, the web sites operated by Internet users are similar to privately-owned warehouses in which goods are stored and from which they are disseminated to various destinations. (Verified Complaint at ¶ 4).
2. Spam — Generally
The e-mail systems of the various ISPs serving Internet users around the world were created solely for the benefit of the ISPs and their respective subscribers. The use restrictions imposed by most ISPs, as well as by State and federal law, impose restraints on the manner in which those systems may be used. Among the types of prohibited conduct is the sending of unsolicited commercial e-mails. See e.g., America Online, Inc. v. IMS, 24 F. Supp.2d 548, 551-52 (E.D. Va. 1998) (finding that spamming and spoofing constitute numerous violations, including trespass, false designation of origin, and dilution of the plaintiff's trademark and service mark, and awarding injunctive relief); America Online Inc v. LCGM, 46 F. Supp.2d 444 (E.D. Va. 1998) (finding that spamming and spoofing constitute, among other violations, false designation of origin, trademark and service mark dilution, a violation of the Computer Fraud and Abuse Act, and a trespass to chattels, and awarding injunctive relief); Hotmail Corp. v. Van$ Money Pie Inc., 1998 WL 388389, 47 U.S.P.Q.2d 1020 (N.D. Cal. 1998) (challenged e-mail practices constitute false designation of origin, federal and state dilution of trademark, violation of the Computer Fraud and Abuse Act, state and federal unfair competition, breach of contract, fraud, misrepresentation, and trespass to chattels). Indeed, in other cases involving spamming and spoofing, this Court has regularly declared those practices unlawful and granted preliminary and permanent injunctive relief providing global protection to all Internet users against the respective defendant's illegal e-mail campaigns. (See Wellborn Dec. at Exhibit L).
The EarthLink Acceptable Use Policy, which governs the use of the EarthLink addresses and equipment, likewise prohibits such activities. This electronic junk mail is often referred to pejoratively as "spam". It is prohibited because it constitutes a trespass, conversion, and invasion of privacy, because it jeopardizes the performance and viability of the ISP's computer system, because the receiving user must pay for the online time spent reading and deleting the message, and because the advertised products and services are often fraudulent and/or illegal. (Verified Complaint at ¶ 5).
"Spam" is the equivalent of a COD package that the recipient is forced to accept, or a series of collect calls that the recipient has no way to decline and that tie up and adversely affect the performance of the recipient's phone system. This junk e-mail impairs the efficiency of the Internet as a whole and of the Internet-related and proprietary services offered by the victim ISPs. Further, this junk mail illegally causes the user-recipients to incur additional expenses of time, money, and computer resources in relation to the storage, review, and inevitable deletion of the unwanted spam. Finally, and perhaps most importantly, this junk e-mail severely and irreparably damages the business reputation of innocent individuals or companies who are often falsely identified or implied by the spammer as having had some role in the origination or transmission of the offending e-mail. (Verified Complaint at ¶ 6).
Such misidentification is pejoratively known as "spoofing" and represents actionable conduct as to any ISP, e-mail service, or other entity wrongfully and falsely identified as having been associated with the e-mail. This fraudulent and deceitful misidentification of the source of a message may be accomplished, among other means, by:
manipulating the message header to alter the identification of the sender's true name and domain (i.e., manually forging the originating address);
reference in the text of the message to a particular person or entity; and/or
by routing the e-mail or message through the innocent ISP's system and otherwise converting that ISP's finite computer resources to create a trail that falsely indicates that the ISP was voluntarily involved in the sending and/or transport of the spam.(Verified Complaint at ¶ 7).
The depth and degree of the universal hatred of unsolicited commercial e-mail by Internet users is amazing. Indeed, the primary portion of a victimized party's damages arises from the incredible and inevitable backlash of complaints and anger by the e-mail recipients against the innocent entity(s) wrongfully believed by the recipients to have sent or helped send the e-mail. With the sending of each e-mail, the innocent party's reputation is damaged, and money and manpower are wasted as the party attempts to respond to the complaints and to identify the true spammer/spoofer. Moreover, "spoofing" is also harmful and illegal because it represents the wrongful use of the innocent company's name and marks. (Verified Complaint at ¶ 8).
C. EarthLink And Its Computer System
Plaintiff EarthLink is one of the largest ISPs in the United States, providing Internet connectivity and e-commerce-related services to roughly 5 million individuals and businesses from more than 5,000 points of presence ("POPs"). Among the Internet-related services offered by EarthLink is e-mail service, by which EarthLink's members are allowed to compose, send, and retrieve e-mail messages. EarthLink members may send and receive e-mails to and from other EarthLink members, as well as any other Internet user. EarthLink's costs of doing business are borne in part by membership fees and service fees paid by its members and by advertisers and sponsors, whose "banner style" ads and/or links appear at various points on the EarthLink web site. (Verified Complaint at ¶ 9).
EarthLink has invested substantial sums of money in developing and marketing its Internet-related and e-mail-related services. EarthLink's e-mail system is operated through dedicated computers known as "servers" which store and route e-mail messages for EarthLink members. The system was created and is maintained solely for the benefit of EarthLink's members, who must agree to specific terms of use prior to activation of their accounts. These terms include, and have at all relevant times included, strict prohibitions against use of the EarthLink system or name in relation to spamming, as well as the use of false or fraudulent information in relation to account activation. All EarthLink account holders must agree to EarthLink's Internet Service Agreement and its Acceptable Use Policy. (Verified Complaint at ¶ 10).
Each EarthLink member is given a unique EarthLink address so that he or she can send and receive e-mail via personal computer. Each member's address consists of a unique name selected by the member plus the EarthLink domain designation. (For example, user John Doe III might choose "johndoeIII@earthlink.net" as his e-mail address.) Some EarthLink users have e-mail addresses that end in other domains (such as "mindspring.com"), which are a carry-over from the EarthLink/Mindspring merger and other acquired companies/domains. EarthLink's mail servers have a finite capacity designated to accommodate the demands imposed by EarthLink's members. EarthLink's computer system is not designed to accommodate, and (as is the system of any ISP) is vulnerable to disruption by, indiscriminate mass mailings. (Verified Complaint at ¶¶ 11 and 12).
D. Howard Carmack And His Violations
For the past two years, Carmack has used stolen and/or bogus credit card numbers and bank account numbers to fraudulently purchase (i.e., to steal) hundreds of dial-up Internet accounts from EarthLink. ( See Preliminary Injunction Motion at Section II and citations set forth therein). Carmack has in turn used the stolen EarthLink accounts in furtherance of his campaigns of unsolicited commercial e-mail ("spamming" and "spoofing"), which are illegal in and of themselves. (Id.). Moreover, Carmack has assumed the identities of other Carmack family members and of innocent third-parties to disguise his own involvement in these illegal activities. (Id.). The egregious nature of Carmack's acts is further compounded by: (1) the fraudulent and illegal products advertised in his e-mails; and (2) the knowledge that Carmack necessarily had and has regarding the gravity of his offenses, especially in light of his prior imprisonment for similar offenses. (Id.).
"Spamming" refers to the sending of unsolicited commercial e-mail. "Spoofing" refers to the spammer's efforts to obscure the true source of the e-mail by falsification of the headers, forged "from" lines, and other such fraudulent measures.
1. Credit Card And Bank Fraud
Carmack used hundreds of bogus and/or stolen credit card numbers and bank account numbers to "purchase" at least 343 EarthLink dial-up Internet accounts. (Youngblood (1) at ¶¶ 10-17). Carmack used the illegally-obtained accounts for, among other purposes, the sending of unsolicited commercial e-mails promoting both his own schemes and products and those of third-parties who hired Carmack to spam for them. ( Id. at ¶ 10; see also Preliminary Injunction Motion at Section II.D). Each fraudulently-obtained EarthLink account remained active until EarthLink terminated it after discovering the underlying financial fraud or the improper spam-related use. (Id. at ¶ 15).
2. Identity Theft
In October 2002, Carmack assumed the identity of an unsuspecting North Dakota man to obtain an extra phone line at Carmack's residence (341 Parkridge Ave., Buffalo, New York), the home base of his and his cohorts' spamming operations. ( See Preliminary Injunction Motion at Section II.D.2). Carmack also stole telephone resources from an unrelated second floor tenant at 341 Parkridge Ave., again seeking to hide his identity and continue his offenses with impunity. ( Id. at Section II.D.3). Finally, Carmack likewise stole the identity of his mentally-disabled brother James Carmack. ( Id. at Section II.D.4).
3. Spamming Spoofing
Carmack uses the stolen EarthLink accounts to carry out massive spamming campaigns. ( Id. at Section II.D). By EarthLink's best estimates, since March 2001, Carmack sent at least 857.5 million illegal e-mails using computer resources stolen from EarthLink. (Youngblood (1) at ¶¶ 15-17). Compounding the illegality of his other violations, the content of his e-mails is often illegal or, at best, dubious. Carmack's e-mails have included advertisements for such items as: (1) viral script-based code (i.e., a computer virus) that, when included in a "blank" e-mail, purports to give the sender control over any computer at which the e-mail is received and opened; (2) numerous work-at-home and "get rich quick" schemes; (3) bulk e-mail software and e-mail lists to be used by other spammers; and (4) cable descramblers that allow the interception of scrambled cable and pay-per-view transmissions without payment to the cable company or distributor. ( See Preliminary Injunction Motion at Exhibit C).
II. EarthLink's Damages
A. EarthLink's Spam-Related Damages — Generally
EarthLink's fraud and abuse department includes 15 full-time employees. (Youngblood (2)). Over 90% of the time and resources of the fraud and abuse department are spent combating spam. (Id.). In addition to its fraud and abuse department, EarthLink pays a third-party company for the use of that company's spam filtering services/software, and spends over $1 million/year toward these ends. (Youngblood (1) at ¶ 24). EarthLink also has technical employees (other than the fraud and abuse department personnel) who create additional software filters for use against spammers using EarthLink's resources to send spam. ( Id.) . Moreover, EarthLink's legal department devotes substantial time and resources toward combating spam, via internal efforts and the hiring of outside counsel to handle spam-related litigation. (Youngblood (2)).
In addition to the administrative and out-of-pocket expenses described above, EarthLink suffers other types of more serious and substantial economic loss as the result of spam sent into or out of EarthLink's network. ( Id.) . These include the loss of business reputation and the loss of existing and prospective customers that necessarily occurs when an ISP's users are repeatedly spammed and/or when its resources are used to send spam to other users. ( Id.) .
B. EarthLink Damages Arising Directly From Howard Carmack's Illegal Activities
1. EarthLink's Base Damages
a. Cost Of Delivery of 857.5 million E-mails
(1) 343 Stolen Accounts Used To Spam
Carmack stole at least 343 Internet accounts from EarthLink, all of which were used to send his illegal spam e-mails. (Youngblood (1) at ¶ 10-17).
(2) 2.5 Day Lifespan For Stolen Accounts
The average life span for the Internet accounts used by Carmack to send his spam is approximately 2.5 days. This number reflects an extremely conservative estimate of the average length of time from the initial use of the account for spamming-related purposes until EarthLink discovered the illegal use of the account and terminated it (i.e., shut it down). In attempting to keep a given account up-and-running for as long as possible for their illegal uses, Carmack employed a number of tricks, including the inclusion of a gibberish string of letters and numbers in the subject line or text of each message to thwart filters that relied upon identical subject lines or text fields to identify spam. (Youngblood (1) at ¶ 15).
(3) 1 Million E-mails Per Day Per Account
Even if a stolen account were used at far less than "maximum capacity" by Carmack, the account could easily be used to send 1 million e-mails per day. Although the actual number of average spams per Carmack account per day may well have been significantly higher, this Court will adopt the conservative figure of 1 million e-mails per account per day for its calculations. (Youngblood (1) at ¶ 16).
(4) Calculation Of Total Carmack E-mails
The numbers set forth above yield the following results:
Accounts stolen by Carmack and used to spam: 343 Average spams per day per account. 1,000,000 Average life span per account (in days): 2.5 343 × 1,000,000 × 2.5 = 857.5 million illegal e-mails
Thus, Carmack sent at least 857.5 million e-mails through EarthLink's computer system during the two year period from March 2001 though February 2003. This represented approximately 2.5% of the EarthLink's total e-mail traffic for that 24 month period (the annual number is roughly 17.5 billion e-mails per year) and 4.9% of the spam traffic for the same period. (Spam accounts for about one-half of the total e-mail traffic in EarthLink's e-mail system.) (Youngblood (1) at ¶¶ 17-18).(5) Calculation of Cost of Delivery
The base cost to EarthLink for delivery of e-mail (without regard to whether the e-mail is legitimate or illegal, and including bandwidth cost, administrative and technical costs, employee costs, etc.) is roughly $1.00/1000 e-mails, or $.001/e-mail. Accordingly, the base cost of delivery to EarthLink for the spam e-mails emanating from Carmack's accounts was roughly $857,500 (857,500,000 e-mails × $1.00/1000 e-mails). (Youngblood (1) at ¶ 19).
b. Lost Profits/Damage To Reputation And Good Will
In addition to the above-described cost of delivery, EarthLink incurs damages in the form of lost profits and damage to its goodwill and reputation as a result of spam. Although its actual damages of this category may well be much higher, this Court will assumed a conservative figure — $2.00/1000 e-mails — which yields lost profit/reputation damages of $1.715 million:
$2.00/1000 × 857.5 million = $1.715 million. (Youngblood (2)). Of note, assuming an accepted industry norm for the average present cash value to an ISP of a dial-up account (approximately $300), the $2.00 figure used above would be correct if EarthLink lost (whether in the form or existing customer or prospective customers) less than 6,000 new or prospective accounts on account of the nearly 1 billion e-mails generated by Carmack's binge of theft and spamming. ( Id.) .
c. Administrative And Employee Costs
Separate and apart from the damages discussed above, in specific relation to each EarthLink account illegally obtained by Carmack and used to spam, EarthLink spent an estimated 4 hours of employee time responding to and investigating complaints. This time included: responding to claims of bank fraud or credit card fraud; investigating the illegal use of the accounts; shutting down each of the fraudulent accounts; responding to complaints from Internet users who received Carmack's spam and otherwise responding to Carmack's wrongful acts. At $20/hour (excluding overhead, payroll taxes, cost of benefits, etc.), these 1372 hours of EarthLink employee time represent $27,440 in costs. (Youngblood (1) at ¶ 23).
d. Other Anti-Spam Costs
EarthLink also incurs out-of-pocket costs of over $1 million/year in relation to additional anti-spam measures, including but not limited to payment for spam filtering services, anti-spam software, product development, and other such anti-spam measures. Given the fact that the Buffalo Spammer was responsible for nearly 5% of the spam with which EarthLink had to deal during the March 2001 through February 2003 time period, approximately $100,000 of that $2 million was properly allocated to the Buffalo Spammer. (Youngblood (1) at ¶ 24).
e. Attorneys' Fees And Expenses
EarthLink has also spent a substantial but reasonable amount on outside legal fees and expenses in pursuing Carmack and his gang (including Judith Carmack and Rashawn Dewer, who have been named in a separate suit): $35,000.00. (Youngblood Dec. at ¶ 25).
f. Summary And Tally of EarthLink's Damages
In accordance with the discussion above, EarthLink has incurred the following damages as a direct result of Carmack's illegal activities:
Employee/Administrative Out-of-Pocket: $ 27,440.00 Outside Attorney's Fees Expenses $ 35,000.00 Bandwidth Other Delivery-Related Expenses $ 857,500.00 Economic Loss/Lost Profits, and Damage to Reputation and Goodwill $1,715,000.00 Other Anti-Spam Measures $ 100,000.00 EarthLink's Damages: $2,734,940.00 (Youngblood (1) at ¶ 26).2. Trebling of Damages Pursuant To RICO Claims
This Court's award of judgment in Earthlink's favor includes EarthLink's federal RICO and state RICO claims. See 18 U.S.C. § 1961, 1962 1964 and O.C.G.A. §§ 16-14-3, 16-14-4, and 16-14-6. The successful federal and state RICO claims each independently mandate the trebling of EarthLink's damages, including its attorney fees. See 18 U.S.C. § 1964(c) (providing for treble damages in successful federal civil RICO claims); O.C.G.A. § 16-14-6(c) (to same effect for state RICO claims). When EarthLink's actual damages are trebled (3 × $2,734,940), the resulting figure is $8,204,820.00.
3. Punitive Damages
In addition to the trebling of its damages pursuant to its federal and/or state RICO claims, EarthLink is also entitled to an award of punitive damages. The present matter calls for the imposition of punitive damages as a means of sending a resounding message to Carmack and other Internet criminals that conduct like that of Carmack will result in a serious financial penalty. Such damages are especially proper in the present matter in light of, among other factors:
Note that punitive damages are permissible in appropriate cases, in addition to the trebling effect of a successful RICO claim. See Southern Intermodal Logistics, Inc. v. D.J. Powers Co., Inc., 10 F. Supp.2d 1337 (S.D. Ga. 1998) (expressly rejecting the idea that treble RICO damages and punitive damages serve the same function and instead categorizing treble RICO damages as compensatory); Humana Inc. v. Forsyth, 525 U.S. 299, 119 S.Ct. 710, 142 L.E.2d 753 (1999) (trebling of damages pursuant to RICO statute and application of state punitive damages statute are not mutually exclusive); Darden v. Ford Consumer Finance Co., Inc., 200 F.3d 753 (11th Cir. 2000) (Georgia's state RICO statute permits the trebling of damages and the recovery of additional punitive damages).
* the intentional, malicious, and widespread nature of Carmack's identity theft, bank theft, and credit card fraud;
* the knowledge that Carmack necessarily had and has regarding the gravity of his offenses, especially in light of his prior stint in the federal penitentiary in relation to charges (money order fraud and bank fraud) similar to those leveled by EarthLink; and
* separate and apart from the credit card fraud, bank fraud, and identity theft, the horrendous damage to ISPs and internet users caused by spam, and the serious threat that spam represents to the continuing cost-efficient operation and utility of the Internet.
In light of the above factors, the damages to which Earthlink is otherwise entitled — $8,204,820 — are hereby doubled to $16,409,640.00 to serve as a clear message and warning to Carmack and all other similarly-situated wrongdoers that such crime and misconduct will not be tolerated.
III. Judgment Shall Not Be Dischargeable In Bankruptcy
It is the intent and desire of this Court that the judgment against Howard Carmack not be dischargeable in any subsequent bankruptcy proceedings instituted by or on behalf of Carmack. As is detailed above, this Court has expressly found that Carmack acted intentionally, maliciously, willfully, and in knowing violation of a multitude of state and federal laws prohibiting the criminal conduct that lay at the center of his Internet-related schemes.
IV. Conclusion And Judgment
Judgment is hereby entered in the amount of $16,409,640.00 against Defendant Howard Carmack.
SO ORDERED.