Craigslist wins $233K in case against optimization site

In Craigslist, Inc. v. Kerbel, 2012 U.S. Dist. LEXIS 108573 (N.D. Cal. Aug. 2, 2012), the Northern District of California granted default judgment for Craigslist against www.craigslist-poster.com for violations of the CFAA, Lanham Act, California hacking statute, California fraud statute, and DMCA. Kerbel and his website exploited the CAPTCHA function of craigslist, and sold credits for "campaigns" that would blast out posting all over the country ("24/7"), circumventing the Terms of Use specified by Craigslist. As the court described it, the "[d]efendant's activities burden craigslist's systems and cause it to incur expenses to increase server capacity, provide additional customer service and support for its legitimate customers, and investigate and enforce its policies." The defendant also used trademarks of Craigslist without authorization.

With regard to the CFAA claims, the court stated:

Plaintiff alleges that Kerbel's conduct was both knowing and intentional because it was designed to circumvent craigslist's security features and Defendant had to agree to the TOU with no intention of complying with it. Kerbel also continued said conduct despite receiving cease and desist letters. His conduct caused harm to craigslist of over $5,000 per year, including increased costs associated with the burden on Plaintiff's servers, investigation and enforcement costs to maintain the legitimacy of posts to the site, loss of goodwill, and the need for increased customer service and support. Thus, the Court finds Plaintiff is entitled to default judgment on its CFAA claims.

Kerbel was also dinged for violations of California's hacking statute - California Penal Code §§ 502(c)(1)-(7).  Additionally, he was hit for statutory damages under the DMCA equaling 200K, which was at the low end of the spectrum. The high end, according to the court, would have been 1.7 million dollars. Keep in mind that the owner of the site made only 33 thousand dollars. That amount was tacked on to the judgment for trademark infringement, making the total judgment ~$233,000.

If nothing else, this reinforces the binding force of TOU on websites.