[CCWG-ACCT] CCWG - ACCT - Recommendation 4 - Community Powers

Tue Dec 15 03:39:42 UTC 2015

I made an inquiry of one of the Board members -- ICANN does not currently
use Director Service letters.

Greg

On Mon, Dec 14, 2015 at 7:55 PM, Aikman-Scalese, Anne <AAikman at lrrlaw.com>
wrote:

> Thanks Holly and Rosemary.  We are still trying to locate a Director
> Service letter – even just to determine whether they ever agree that CA law
> governs when they sign on.
>
> 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 <520.629.4428> | (F) 520.879.4725 <520.879.4725>*
>
> *AAikman at lrrlaw.com <AAikman at lrrlaw.com>** | www.LRRLaw.com
> <http://www.lrrlaw.com/>*
>
>
>
>
>
>
>
> *From:* Gregory, Holly [mailto:holly.gregory at sidley.com]
> *Sent:* Monday, December 14, 2015 5:42 PM
> *To:* Rosemary E. Fei; Aikman-Scalese, Anne; 'Steve DelBianco'
>
> *Cc:* gregshatanipc at gmail.com; 'Phil Corwin'; cwilson at 21cf.com; Thomas
> Rickert; ipc_accountabilityct at icann.org; 'Gomes, Chuck' (
> cgomes at verisign.com); Sidley ICANN CCWG; ICANN-Adler;
> accountability-cross-community at icann.org
> *Subject:* RE: CCWG - ACCT - Recommendation 4 - Community Powers
>
>
>
> Agreed
>
>
>
> Sent with Good (www.good.com)
>
>
> ------------------------------
>
> *From:* Rosemary E. Fei
> *Sent:* Monday, December 14, 2015 06:41:09 PM
> *To:* Aikman-Scalese, Anne; Gregory, Holly; 'Steve DelBianco'
> *Cc:* gregshatanipc at gmail.com; 'Phil Corwin'; cwilson at 21cf.com; Thomas
> Rickert; ipc_accountabilityct at icann.org; 'Gomes, Chuck' (
> cgomes at verisign.com); Sidley ICANN CCWG; ICANN-Adler;
> accountability-cross-community at icann.org
> *Subject:* RE: CCWG - ACCT - Recommendation 4 - Community Powers
>
> Questions 1 and 2 might be re-directed at whether a director can be
> enforceably bound to an agreement not to bring such suits or seek such
> relief, such as in a pre-service letter, rather than (or in addition to)
> researching whether such suits and relief are possible.  To Anne’s point,
> claims without any legal basis can still be made in court, so perhaps the
> focus should be on how quickly and easily they will be dismissed.  An
> enforceable agreement would go a long way in that direction, which would be
> reassuring for SO/AC actors, but also a strong disincentive for directors
> being removed to bring a claim at all.
>
>
>
> The last question could be directed to ICANN’s insurance carrier, or other
> carriers who may offer such coverage, rather than legal counsel.  We can do
> the research if directed, but I don’t think our legal expertise is needed
> to be able to do that work.
>
>
>
> Rosemary
>
>
>
> Rosemary E. Fei
> Adler & Colvin
> 235 Montgomery Street, Suite 1220
> San Francisco, CA 94104
> 415/421-7555 (phone)
> 415/421-0712 (fax)
> rfei at adlercolvin.com
> www.adlercolvin.com
>
>
>
>
>
> Adler & Colvin is a San Francisco Green Business certified by the City and
> County of San Francisco. Please consider the environment before you print
> this email.
>
>
>
> *From:* Aikman-Scalese, Anne [mailto:AAikman at lrrlaw.com
> <AAikman at lrrlaw.com>]
> *Sent:* Monday, December 14, 2015 12:29 PM
> *To:* Holly Gregory; 'Steve DelBianco'
> *Cc:* gregshatanipc at gmail.com; 'Phil Corwin'; cwilson at 21cf.com; Rosemary
> E. Fei; Thomas Rickert; ipc_accountabilityct at icann.org; 'Gomes, Chuck' (
> cgomes at verisign.com); Rosemary E. Fei; Sidley ICANN CCWG; ICANN-Adler;
> accountability-cross-community at icann.org
> *Subject:* RE: CCWG - ACCT - Recommendation 4 - Community Powers
>
>
>
> 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 “written justification” 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 “chilling effect” that is of concern when
> the officer of an SO or AC is drafting the “written justification”  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 <520.629.4428> | (F) 520.879.4725 <520.879.4725>*
>
> *AAikman at lrrlaw.com <AAikman at lrrlaw.com>** | www.LRRLaw.com
> <https://urldefense.proofpoint.com/v2/url?u=http-3A__www.lrrlaw.com_&d=CwMGaQ&c=Od00qP2XTg0tXf_H69-T2w&r=1-1w8mU_eFprE2Nn9QnYf01XIV88MOwkXwHYEbF2Y_8&m=trlTGCn494B2WVzErbucQz6en49m-qs150hXbEVNqPs&s=ZgQQyaP1W9CyE30YnuM1f1ve1enoUE3pRQCjlalpACs&e=>*
>
>
>
>
>
>
>
> *From:* Gregory, Holly [mailto:holly.gregory at sidley.com
> <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
> holly.gregory at sidley.com
>
>
>
> *From:* Aikman-Scalese, Anne [mailto:AAikman at lrrlaw.com
> <AAikman at lrrlaw.com>]
> *Sent:* Monday, December 14, 2015 3:03 PM
> *To:* Gregory, Holly; '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)
> *Subject:* RE: CCWG - ACCT - Recommendation 4 - Community Powers
>
>
>
> Holly – I would tend to agree if in fact the SO or AC could 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 “written justification”, to which the Board has now added its  “Clear
> Rationale” 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
> “written justification” 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 plaintiff’s lawyer to allege claims of libel and even
>  irreparable harm.  *The SO/AC would likely need legal advice just to
> draft the “written justification.”*
>
>
>
> 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 “written justification”.     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 <520.629.4428> | (F) 520.879.4725 <520.879.4725>*
>
> *AAikman at lrrlaw.com <AAikman at lrrlaw.com>** | www.LRRLaw.com
> <https://urldefense.proofpoint.com/v2/url?u=http-3A__www.lrrlaw.com_&d=CwMGaQ&c=Od00qP2XTg0tXf_H69-T2w&r=1-1w8mU_eFprE2Nn9QnYf01XIV88MOwkXwHYEbF2Y_8&m=-r-X1vqLqfFo7wDtSJ7AQkHOsUyJczd-GcHxg4tVr_4&s=vqBDgdI1aOR4vc8v3l4jKLsfuSCdEocU8QaPE3RstAA&e=>*
>
>
>
>
>
>
>
> *From:* Gregory, Holly [mailto:holly.gregory at sidley.com
> <holly.gregory at sidley.com>]
> *Sent:* Monday, December 14, 2015 12:43 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
> *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 indemnification 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
> holly.gregory at sidley.com
>
>
>
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