A written ruling from Judge Jeremy Fogel in U.S. District in San Jose, Calif., is expected early next week, a court clerk said. The action came at a hearing on a Facebook motion that Wallace be found in criminal contempt for allegedly continuing to send spam on Facebook.
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.
The judge had earlier entered a preliminary injunction against Wallace for failing to appear in court for the original proceedings, said Sam O'Rourke, Facebook's lead counsel for litigation and intellectual property. Wallace appeared in court on Friday in what is believed to be his first court appearance in any of the cases filed against him, according to O'Rourke.
Facebook also had asked for a default judgment in the case, but the judge was prevented from taking action on that since Wallace filed for Chapter 11 bankruptcy protection on Thursday and civil actions seeking monetary sanctions are automatically stayed when a defendant files for bankruptcy, O'Rourke said. Facebook believes Wallace filed for bankruptcy to avoid a default judgment and criminal contempt order, he said.
Facebook plans to ask the bankruptcy court to lift the stay so a ruling can be made on the default judgment to become a creditor, O'Rourke said.
"We're very pleased Judge Jeremy Fogel agreed that there were grounds for criminal contempt and that the U.S. Attorney's office should investigate Wallace," Facebook said in an e-mail statement. "Wallace filed for bankruptcy, which is not unexpected and only delays our judgment temporarily. We will continue to pursue the judgment and will be reviewing his filing very closely."
The order should serve as a strong deterrent against spammers, Facebook said. "Fogel's ruling demonstrates that judges will enforce restraining orders and spammers who violate them face criminal prosecution" the statement said.
A year ago, Wallace and another defendant were ordered to pay MySpace.com $234 million following a trial at which Wallace repeatedly failed to turn over documents or even show up in court.
In the largest judgment in history for a case brought under the Can-Spam Act, the federal court in San Jose awarded Facebook $873 million in damages late last year against a Canadian man accused of spamming users of the site.