[CCWG-ACCT] CCWG - ACCT - Recommendation 4 - Community Powers
Alan Greenberg
alan.greenberg at mcgill.ca
Mon Dec 14 22:05:03 UTC 2015
The ALAC has been raising this issue multiple times with no answers.
Another related question is whether we can
require a binding pre-seating letter saying that
the director waives all rights to sue for
defamations (or whatever) related to the removal process.
Alan
At 14/12/2015 03:29 PM, Aikman-Scalese, Anne wrote:
>If the Chairs want to certify the legal questions, I think these would be:
>
>1. Is it possible for a Director to bring
>suit for libel, slander, or other causes of
>action during the community enforcement removal
>process or thereafter based on the âwritten
>justificationâ laid out by the SO/AC and/or
>oral statements made during the required
>conference calls in the Community enforcement process?
>
>2. Could a Director seek injunctive and/or
>declaratory relief to interrupt the community
>enforcement process toward removal? If so,
>would SOs/ACs and officers who are sued be
>required to mount their own defense? How expensive would this be?
>
>3. Is there insurance coverage available
>for SOs/ACs and their officers in relation to
>possible suit by a director in jeopardy of being
>removed or who has been removed from the Board? If so, how expensive is it?
>
>These are not questions about how likely the
>action is to occur. That does not really
>figure into the âchilling effectâ that is of
>concern when the officer of an SO or AC is
>drafting the âwritten
>justificationâ and/or encouraging open
>discussion in the required (and recorded for posterity) conference call.
>Anne
>
>[]
>
>Anne E. Aikman-Scalese, Of Counsel
>Lewis Roca Rothgerber LLP
>One South Church Avenue Suite 700 | Tucson, Arizona 85701-1611
>(T) 520.629.4428 | (F) 520.879.4725
><mailto:AAikman at lrrlaw.com>AAikman at lrrlaw.com | www.LRRLaw.com
>
>
>
>From: Gregory, Holly [mailto:holly.gregory at sidley.com]
>Sent: Monday, December 14, 2015 1:14 PM
>To: Aikman-Scalese, Anne; 'Steve DelBianco'
>Cc: gregshatanipc at gmail.com; 'Phil Corwin';
>cwilson at 21cf.com; Rosemary Fei
>(rfei at adlercolvin.com); Thomas Rickert;
>ipc_accountabilityct at icann.org; 'Gomes, Chuck'
>(cgomes at verisign.com); Rosemary Fei
>(rfei at adlercolvin.com); Sidley ICANN CCWG; ICANN at adlercolvin.com
>Subject: RE: CCWG - ACCT - Recommendation 4 - Community Powers
>
>We must await further direction from the
>co-chairs whether this is something that they
>would like research on under California law
>
>HOLLY GREGORY
>Partner
>
>Sidley Austin LLP
>+1 212 839 5853
><mailto:holly.gregory at sidley.com>holly.gregory at sidley.com
>
>From: Aikman-Scalese, Anne
>[<mailto:AAikman at lrrlaw.com>mailto:AAikman at lrrlaw.com]
>Sent: Monday, December 14, 2015 3:03 PM
>To: Gregory, Holly; 'Steve DelBianco'
>Cc:
><mailto:gregshatanipc at gmail.com>gregshatanipc at gmail.com;
>'Phil Corwin';
><mailto:cwilson at 21cf.com>cwilson at 21cf.com;
>Rosemary Fei
>(<mailto:rfei at adlercolvin.com>rfei at adlercolvin.com);
>Thomas Rickert;
><mailto:ipc_accountabilityct at icann.org>ipc_accountabilityct at icann.org;
>'Gomes, Chuck' (<mailto:cgomes at verisign.com>cgomes at verisign.com)
>Subject: RE: CCWG - ACCT - Recommendation 4 - Community Powers
>
>Holly I would tend to agree if in fact the SO
>or AC ccould remove a director without cause and
>did not have to state its reasons, but the
>community process requires this and it is
>discussed fully throughout four steps of the
>Community process to director removal. The SO
>or AC must state âwritten justificationâ, to
>which the Board has now added its âClear Rationaleâ comment.
>
>One need only look at the differences of opinion
>that arose with respect to .africa to understand
>that a stated reason for removal which has a
>âwritten justificationâ or Clear Rationale
>from the SO/AC standpoint could easily form the
>basis of a suit by a director. It does not
>require much by way of theory for a
>plaintiffâs lawyer to allege claims of libel
>and even irreparable harm. The SO/AC would
>likely need legal advice just to draft the âwritten justification.â
>
>Again, I do not think indemnification represents
>a reasonable risk to ICANN as a corporation. The
>risk should be limited by contract when
>directors take office. Directors should not be
>suing the SO/AC and/or its officers for removal.
>Otherwise, the ultimate enforcement mechanism in
>the Sole Designator Model is not effective.
>
>You may not have seen this fact situation
>occur. That does not mean it would not occur at
>ICANN. We have some fairly feisty folks in our
>midst. The risk of suit is of course much
>higher than the risk of success on the
>merits. I would say it is hard to measure in
>dollars the potential damage to an individual
>associated with being removed from the ICANN
>Board with âwritten justificationâ. It
>could be a pretty good strategy for a director
>who wants to interrupt the Community Enforcement
>process. He or she may also have the full
>support of other Directors willing to testify.
>Anne
>
>[]
>
>Anne E. Aikman-Scalese, Of Counsel
>Lewis Roca Rothgerber LLP
>One South Church Avenue Suite 700 | Tucson, Arizona 85701-1611
>(T) 520.629.4428 | (F) 520.879.4725
><mailto:AAikman at lrrlaw.com>AAikman at lrrlaw.com | www.LRRLaw.com
>
>
>
>From: Gregory, Holly
>[<mailto:holly.gregory at sidley.com>mailto:holly.gregory at sidley.com]
>Sent: Monday, December 14, 2015 12:43 PM
>To: Aikman-Scalese, Anne; 'Steve DelBianco'
>Cc:
><mailto:gregshatanipc at gmail.com>gregshatanipc at gmail.com;
>'Phil Corwin';
><mailto:cwilson at 21cf.com>cwilson at 21cf.com;
>Rosemary Fei
>(<mailto:rfei at adlercolvin.com>rfei at adlercolvin.com); Thomas Rickert
>Subject: RE: CCWG - ACCT - Recommendation 4 - Community Powers
>
>Anne, My sense is that the concerns you raise
>present an extremely low risk of suit and
>hence low risk of indemnificcation and cost of
>indemnification. In my many years of corporate
>governance practice I cannot recall a lawsuit
>for libel or defamation by a director in an
>instance of removal. But we can research under
>California law if the co-chairs certify. Also,
>I am not aware of any theory of libel or
>defamation that would give rise to injunctive
>relief delaying such removal where the
>designator has the right to remove with or
>without cause as here. Again, we have not
>researched this specific point under California
>law but will do so if certified. Holly
>
>HOLLY GREGORY
>Partner
>
>Sidley Austin LLP
>+1 212 839 5853
><mailto:holly.gregory at sidley.com>holly.gregory at sidley.com
>
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