[CCWG-ACCT] Question on binding IRP

Seun Ojedeji seun.ojedeji at gmail.com
Sat Oct 17 10:27:42 UTC 2015


On Sat, Oct 17, 2015 at 10:53 AM, Greg Shatan <gregshatanipc at gmail.com>
wrote:

> The only entities that can seek to enforce an arbitration judgment are the
> parties to the arbitration (and it would typically be the prevailing party
> seeking to enforce the judgment against a losing party that refused to
> honor the judgment).
>
> The IRP is an arbitration panel (essentially, private judges by
> contract).  I recognize that there are some legal systems in which judges
> have prosecutorial powers (i.e., they can act more like a party).  Under
> the US system and under any arbitration rules I'm familiar with, that is
> not the case -- they are purely judicial.
>

This adequately answers my question on whether option 1 will be
possible(thats assuming that you are saying this in line with the CA legal
requirements). Thanks


>
> Since the Ombudsman is not a party, they would not be able to enforce.
> Also, I think that's way out of scope of what an Ombudsman is tasked to do.
>

I am actually not talking about the Ombudsman in the current definition of
Ombudsman. I am talking about having a seperate legal person-hood that
could actually enforce the will of the community after the board has
refused to comply.

>
> Maybe what we need is a "Community Advocate" -- a legal entity to be
> instructed by the community to bring IRP cases for the community.  Not sure
> how that would differ from the single designator or single member, except
> that it would exist solely to bring these cases and not to exercise powers.
>

Yes! this is a better phrase as it carries the description of what i was
trying to say. I think it differs in the sense that there won't be need to
have either SD or SM and all structures will be kept intact (as it
currently it).

Regards


> Greg
>
> On Sat, Oct 17, 2015 at 5:07 AM, Seun Ojedeji <seun.ojedeji at gmail.com>
> wrote:
>
>> Thanks for sharing this Leon, I expect this is one of the puzzle that
>> will need to handled/cracked by the subgroup. Considering that there is
>> still an ongoing concern of whether the SO/AC would want to have such legal
>> status, 2 options comes to mind:
>>
>> - Can the IRP be given this legal status to enforce? If yes how do we
>> ensure they don't enforce unilaterally?
>>
>> - Can an individual similar to the *Ombudsman* be engaged for such role?
>>
>> It will be good to hear why those options may not work.
>>
>> Regards
>> Sent from my Asus Zenfone2
>> Kindly excuse brevity and typos.
>> Dear Ed,
>>
>> Thank you very much. That was fast!
>>
>> Best regards,
>>
>>
>> León
>>
>> El 16/10/2015, a las 8:23 p.m., McNicholas, Edward R. <
>> emcnicholas at sidley.com> escribió:
>>
>>
>> Please use this version.
>>
>> León –
>>
>> Holly and Rosemary asked me to respond to the question about whether an
>> entity that has no legal personhood ( i.e., is not an unincorporated
>> association, partnership, corporation or natural person) can enter into
>> binding arbitration under California law or applicable federal law.  It is
>> important to emphasize that the issue involves *binding* arbitration.
>> Nonbinding arbitration and mediation proceedings can involve any sort of
>> entity.  Ultimately they are not intended to be binding or enforceable, and
>> so there is no significance to whether an entity could be bound or bind
>> another entity in that context.
>>
>> In contrast, if arbitration is intended to be binding, then the entity
>> involved must be subject to be being bound itself and be able to bind the
>> other entity.  Unless the losing party complies after the arbitrator’s
>> decision, arbitral awards must be taken into a court and recognized in a
>> court judgment in order to enforced.  Ultimately, arbitration relies upon
>> the courts for enforcement; and courts must examine whether they are
>> dealing with a legal entity.  The legally significant point is whether a
>> non-legal person can enforce an arbitration award, and the answer to that
>> question is “no.”  Federal Rule of Civil Procedure 17(b) (3)(A) provides
>> that “a partnership or other unincorporated association with no . . .
>> capacity under that state's law may sue or be sued in its common name to
>> enforce a substantive right existing under the United States Constitution
>> or laws.”  This Rule does not – and cannot – bestow capacity to sue on a
>> non-legal person when that non-legal person tries to enforce a substantive
>> right, and we are not aware of any case that stands for that proposition.
>> SO/ACs will need to demonstrate legal personhood to enforce an arbitration
>> agreement (assuming that they are either parties themselves to the
>> arbitration agreement or third-party beneficiaries).
>>
>> There was a question about whether some case law suggests that even if an
>> entity lacks legal personhood  and therefore cannot enforce an
>> arbitration award under state law, Federal Rule of Civil Procedure 17(b)
>> permits that entity to sue in federal court because arbitration is a
>> “substantive right.”   Specifically,  some  case law indicates that an
>> entity lacking capacity to compel arbitration or enforce an arbitration
>> award in its own name under state law may in some circumstances do so under
>> Rule 17(b).  *See, e.g.*, *O & Y Landmark Assocs. of Va. v. Nordheimer*,
>> 725 F. Supp. 578, 581 (D.D.C. 1989) (finding that a partnership seeking to
>> compel arbitration had capacity even though D.C. law did not recognize
>> such); *Local 4076, United Steelworkers of Am. V. United Steelworkers of
>> Am., AFL-CIO*, 327 F. Supp. 1400, 1403 (W.D. Pa. 1971); *see also Day v.
>> Avery*, 548 F.2d 1018, 1022 (D.C. Cir. 1976) (recognizing arbitration as
>> a substantive right), *Laundry, Dry Cleaning & Dye House Workers Int’l
>> Union v. Mahoney*, 491 F.2d 1029 (8th Cir. 1974) (enforcing arbitration
>> in an equally divided concurring opinion).  None of these cases, however,
>>  suggest that an entity entirely lacking legal personhood may file suit in
>> federal court simply because the right to arbitrate is at issue.  Rather,
>> Rule 17(b) lets the partnership, union, or other unincorporated association
>>  – each a legal person –  sue in its name, as opposed to forcing its
>> members to sue in theirs.  It bears emphasis that in each instance these
>> entities were legal persons.   For instance, in *Local 4076*,
>> Pennsylvania law did not allow the local union to sue in its own name
>> because its charter had been cancelled, requiring instead that the suit be
>> filed in the name of a member or members as trustees*ad litem* for the
>> association.  327 F. Supp. at 1403.  Rule 17(b) overrode this pleading
>> requirement.  *Id.*  *Mahoney* dealt with a similar issue.  In each of
>> these cases, an entity with legal personhood existed at some point; the
>> question was whether the entity itself or the individual members must be
>> the nominal party in the suit.
>>
>> The question of legal personhood is a key enforcement issue for any model
>> that relies on individual SOs and ACs for enforcement. It  would be
>> necessary for the SO/ACs to show that they are unincorporated associations
>> (or some other type of legal person) to enforce any arbitrator’s award.  In
>> California, that is an uncertain test:  whether there is a “group of two or
>> more persons joined by mutual consent for a common lawful purpose, whether
>> organized for profit or not.”  Cal. Corp. Code § 18035(a); *see also *Cal.
>> Code Civ. P. § 369.5.  “The criteria applied to determine whether an entity
>> [is capable of suing or being sued as] an unincorporated association are no
>> more complicated than (1) a group whose members share a common purpose, and
>> (2) who function under a common name under circumstances where fairness
>> requires the group be recognized as a legal entity.”  *Barr v. United
>> Methodist Church*, 90 Cal. App. 3d 259, 266 (Cal. Ct. App. 1979).  And
>> at least some courts have recognized that an “organization” that “has no
>> charter, by-laws or articles, no office or place of business, no mailing
>> address, no bank account, no assets or obligations, and has never
>> transacted business” as an entity – is not an unincorporated association
>> with capacity to sue or be sued.  *Cal. Clippers, Inc. v. U.S. Soccer
>> Football Ass’n*, 314 F. Supp. 1057, 1068 (N.D. Cal. 1970).  In our case,
>> some SO/ACs have indicated that they do not view themselves as
>> unincorporated associations, and, in that case, it would involve a
>> significant risk to enforceability to suggest that they could enforce an
>> arbitration award.  Of course, if an unincorporated association exists or
>> is timely created, it is a legal person and there will be no problem with
>> lack of personhood; this email is only to be clear that *lack* of
>> personhood is problematic.
>>
>> *Please note that, as a general matter, this legal analysis is provided
>> on a level in keeping with the question posed.  Our legal analysis is
>> tailored to the context in which the particular question arises.  It is
>> provided to inform and help facilitate your consideration of the governance
>> accountability models under discussion and should not be relied upon by any
>> other persons or groups for any other purpose.  Unless otherwise stated,
>> our legal analysis is based on California law and in particular the laws
>> governing California nonprofit public benefit corporations (California
>> Corporations Code, Title 1, Division 2).  In our effort to respond in a
>> limited time frame, we may** not have completely identified, researched
>> and addressed all potential implications and nuances involved.*
>>
>> Please let us know if there are any questions or concerns.
>>
>> All the best,
>>
>> Ed
>> *EDWARD* *R. McNICHOLAS*
>> Partner \ Privacy, Data Security & Information Law Practice Co-Leader
>> *Sidley Austin llp*
>> 1501 K Street, N.W.
>> Washington, DC 20005
>> 202 736 8010 office
>> *From:* León Felipe Sánchez Ambía [mailto:leonfelipe at sanchez.mx
>> <leonfelipe at sanchez.mx>]
>> *Sent:* Friday, October 16, 2015 2:49 PM
>> *To:* Gregory, Holly; Rosemary E. Fei
>> *Cc:* ACCT-Staff; Sidley ICANN CCWG; ICANN-Adler; Accountability Cross
>> Community
>> *Subject:* Question on binding IRP
>>
>> Dear Holly, dear Rosemary,
>>
>> One key question that has been in the air and I believe is important to
>> answer is the following:
>>
>> Does an entity that has no legal personhood ( i.e., is not an
>> unincorporated association, partnership, corporation or natural person) can
>> enter into binding arbitration under California law or applicable federal
>> law?
>>
>> Could you please guide us on this issue. This, of course, certifies this
>> question for you to work on it.
>>
>>
>> Best regards,
>>
>>
>> León
>>
>>
>>
>>
>>
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-- 
------------------------------------------------------------------------





*Seun Ojedeji,Federal University Oye-Ekitiweb:      http://www.fuoye.edu.ng
<http://www.fuoye.edu.ng> Mobile: +2348035233535**alt email:
<http://goog_1872880453>seun.ojedeji at fuoye.edu.ng
<seun.ojedeji at fuoye.edu.ng>*

Bringing another down does not take you up - think about your action!
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