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

Tue Dec 15 16:35:40 UTC 2015

Dear Anne,

I am drawing your attention to the webinar FAQ where our lawyers have 
provided additional details to your questions (page 3 and 4, questions 8 to 
12).

https://community.icann.org/download/attachments/56984258/Webinar%20-%20Final%20Q%26A%20-%202%20Dec.pdf?version=1 
<https://community.icann.org/download/attachments/56984258/Webinar%20-%20Final%20Q%26A%20-%202%20Dec.pdf?version=1&modificationDate=1450173637000&api=v2> 
&modificationDate=1450173637000&api=v2

In light of this additional material and the responses provided in this 
thread I would like to confirm that we have sufficient legal input.

My impression is that the question then becomes, for the CCWG itself, 
whether the pre-service letters are perceived by the group as a useful extra 
measure to implement the power, and I noted that ALAC (in Alan’s post 
earlier to our last call) was suggesting the same.

Best

Mathieu

De : accountability-cross-community-bounces at icann.org 
[mailto:accountability-cross-community-bounces at icann.org] De la part de 
Rosemary E. Fei
Envoyé : mardi 15 décembre 2015 01:41
À : Aikman-Scalese, Anne; Holly Gregory; 'Steve DelBianco'
Cc : accountability-cross-community at icann.org; 'Gomes, Chuck' 
(cgomes at verisign.com); Sidley ICANN CCWG; ipc_accountabilityct at icann.org; 
ICANN-Adler
Objet : Re: [CCWG-ACCT] 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 
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this email.

From: Aikman-Scalese, Anne [mailto: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 | (F) 520.879.4725

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 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]
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 | (F) 520.879.4725

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]
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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