This is what we use at xmission.com and it works quite well:

Modify your sendmail.cf in the following way.

1. Setup a hash table with the domains you wish to block:

# Bad domains (spam kings)
FK/etc/mailspamdomains

2. Add the following rules to S98:

### Spam blockage
R$* < @$*$=K . > $*     $#error $@ 5.1.3 $: "Your domain has been blocked due to
 spam problems.  Contact your administrator."
R$* < @$*$=K > $*       $#error $@ 5.1.3 $: "Your domain has been blocked due to
 spam problems.  Contact your administrator."

3. Make your hash table.  Here is the current blacklist/contents from ours:

moneyworld.com
interramp.com
dm1.com
zygon.com
zygn.com
stockpick.com
netamerica1.com
selfhelpnet.com
helpnet.net
buytime.com
jackpots.com
cyberpromo.com
californiakid.com
lsat.com
megd.com
pwrnet.com
bulk-e-mail.com
bigprofits.com
bbbiiizzz.com
owlsnest.com
natureplus.com
globalfn.com

Mail that comes in from any of these domains will be returned to sender with
the error.  If the sender is bogus, it will bother the postmaster at the bad
domain in an appropriate manner.

Keep in mind that *ALL* email from these domains will be blocked.  This is
really only a good solution for domains that are setup by spammers for
spamming.  Blocking something like aol.com, although it may seem initially
attractive ;-), would cause problems for legitimate users of email in that
domain.

Partial credit for this patch goes to Dave Anderson (angio@aros.net).  Share
and enjoy.