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<p class="MsoNormal"><span style="font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1F497D">Thanks for this constructive input Kieren.
<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1F497D">The points you raise are very important and should be considered carefully by the CCWG.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1F497D">Question: Can you be more specific in your references when/where ICANN has used its interpretations of anti-trust law to avoid accountability enhancements?
I have no doubt they exist, but it would help the CCWG to have a pointer if possible.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1F497D">I agree fully that we need to revisit those instances to help inform our discussions and avoid a repeat at this critical time.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1F497D">Thanks and regards,<br>
Keith<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><b><span style="font-size:10.0pt;font-family:"Tahoma","sans-serif"">From:</span></b><span style="font-size:10.0pt;font-family:"Tahoma","sans-serif""> accountability-cross-community-bounces@icann.org [mailto:accountability-cross-community-bounces@icann.org]
<b>On Behalf Of </b>Kieren McCarthy<br>
<b>Sent:</b> Tuesday, February 17, 2015 4:29 PM<br>
<b>To:</b> Steve DelBianco<br>
<b>Cc:</b> Accountability Cross Community<br>
<b>Subject:</b> Re: [CCWG-ACCT] Thinking ahead - overcoming the legal obstacles to accountability<o:p></o:p></span></p>
<p class="MsoNormal"><o:p> </o:p></p>
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<p class="MsoNormal">To Steve's point: all of the accountability measures proposed can be implemented, and perfectly legally, if ICANN's Board decides to make the relevant changes to its own bylaws. <o:p></o:p></p>
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<p class="MsoNormal"><o:p> </o:p></p>
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<p class="MsoNormal">If you read ICANN's lawyers' position carefully, you will see that they never say it is not possible, just that it is either not *currently* possible (because of the current bylaws), or that the law does not "provide" for that (not expressly,
but it is legally possible).<o:p></o:p></p>
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<p class="MsoNormal"><o:p> </o:p></p>
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<p class="MsoNormal">My point, again, is two-fold:<o:p></o:p></p>
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<p class="MsoNormal"><o:p> </o:p></p>
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<p class="MsoNormal">1. What happens when the independent legal advice clashes with ICANN's internal legal advice? <o:p></o:p></p>
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<p class="MsoNormal"><o:p> </o:p></p>
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<p class="MsoNormal">I think everyone agrees that the ICANN Board is required to make changes to ICANN's bylaws for any of this to happen. So - what happens when they are told by their own lawyers it is not legal to make those changes? Because that is their
current position.<o:p></o:p></p>
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<p class="MsoNormal"><o:p> </o:p></p>
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<p class="MsoNormal"><o:p> </o:p></p>
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<p class="MsoNormal">2. The whole issue of anti-trust law (or, more accurately, ICANN's interpretation of anti-trust law). This has been used in the past by ICANN to explain why it cannot make changes but it has yet to be considered in this accountability process.<o:p></o:p></p>
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<p class="MsoNormal"><o:p> </o:p></p>
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<p class="MsoNormal"><o:p> </o:p></p>
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<p class="MsoNormal"><o:p> </o:p></p>
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<p class="MsoNormal"><o:p> </o:p></p>
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<p class="MsoNormal">Kieren<o:p></o:p></p>
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<p class="MsoNormal"><o:p> </o:p></p>
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<p class="MsoNormal"><o:p> </o:p></p>
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<p class="MsoNormal">On Tue, Feb 17, 2015 at 12:31 PM, Steve DelBianco <<a href="mailto:sdelbianco@netchoice.org" target="_blank">sdelbianco@netchoice.org</a>> wrote:<o:p></o:p></p>
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<p class="MsoNormal"><span style="font-family:"Calibri","sans-serif";color:black">We discussed that Bylaws provision several weeks ago, Rudi. <o:p></o:p></span></p>
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<p class="MsoNormal"><o:p> </o:p></p>
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<p class="MsoNormal"><span style="font-family:"Calibri","sans-serif"">California Nonprofit Corporation Law expressly authorizes non-profit organizations to have Members with ultimate authority to control the organization. Under Cal. Corp. Code § 5310 “A corporation
may admit persons to Membership, as provided in its Articles or Bylaws”. California law recognizes that Members may reserve the right to approve nonprofit actions and oversee the Board of Directors. (§ 5210) A Board of Directors’ authority to conduct the affairs
of a nonprofit may be limited by the rights of the Members specified in the law or in the nonprofit corporation’s Articles or Bylaws.</span><o:p></o:p></p>
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<p class="MsoNormal"><o:p> </o:p></p>
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<p class="MsoNormal"><span style="font-family:"Calibri","sans-serif"">Although ICANN does not currently have Members under Article XVII of its Bylaws, ICANN’s Articles of Incorporation expressly anticipate that ICANN may have Members: “These Articles may be
amended by the affirmative of at least two-thirds of the directors of the Corporation. When the Corporation has Members, amendments must be ratified by a two-thirds (2/3) majority of the Members voting on any proposed amendment.” (Section 9)</span><o:p></o:p></p>
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<p class="MsoNormal"><span style="font-family:"Calibri","sans-serif";color:black"><o:p> </o:p></span></p>
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<p class="MsoNormal"><span style="font-family:"Calibri","sans-serif";color:black">As you say, the ICANN bylaws presently say that ICANN won’t have members. But that Bylaw can be changed to allow Members as permitted in the Articles and under CA law.<o:p></o:p></span></p>
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<p class="MsoNormal"><span style="font-family:"Calibri","sans-serif";color:black"><o:p> </o:p></span></p>
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<p class="MsoNormal"><span style="font-family:"Calibri","sans-serif";color:black">—<o:p></o:p></span></p>
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<p class="MsoNormal"><span style="font-family:"Calibri","sans-serif";color:black">Steve DelBianco<o:p></o:p></span></p>
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<p class="MsoNormal"><span style="font-family:"Calibri","sans-serif";color:black"><o:p> </o:p></span></p>
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<p class="MsoNormal"><span style="font-family:"Calibri","sans-serif";color:black"><o:p> </o:p></span></p>
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<p class="MsoNormal"><b><span style="font-family:"Calibri","sans-serif";color:black">From:
</span></b><span style="font-family:"Calibri","sans-serif";color:black">Rudolph Daniel<br>
<b>Date: </b>Tuesday, February 17, 2015 at 3:21 PM<br>
<b>To: </b>Kieren McCarthy<br>
<b>Cc: </b>Accountability Cross Community<br>
<b>Subject: </b>Re: [CCWG-ACCT] Thinking ahead - overcoming the legal obstacles to accountability<o:p></o:p></span></p>
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<p><span style="font-family:"Calibri","sans-serif";color:black">Can I also point to the icann bylaws that states:<br>
Article 17: Members<br>
ICANN itself shall not have members, as defined by California Nonprofit Public Benefit Corporation Law.<o:p></o:p></span></p>
<p><span style="font-family:"Calibri","sans-serif";color:black">May have missed this on the thread, but Cannot remember it being mentioned.<o:p></o:p></span></p>
<p><span style="font-family:"Calibri","sans-serif";color:black">We would like to establish the importance of having this clause.<br>
Rudi Daniel<o:p></o:p></span></p>
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<p class="MsoNormal"><span style="font-family:"Calibri","sans-serif";color:black">On Feb 17, 2015 3:13 PM, "Kieren McCarthy" <<a href="mailto:kieren@kierenmccarthy.com" target="_blank">kieren@kierenmccarthy.com</a>> wrote:<o:p></o:p></span></p>
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<p class="MsoNormal"><span style="font-family:"Calibri","sans-serif";color:black">Hello all,
<o:p></o:p></span></p>
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<p class="MsoNormal"><span style="font-family:"Calibri","sans-serif";color:black"><o:p> </o:p></span></p>
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<p class="MsoNormal"><span style="font-family:"Calibri","sans-serif";color:black">There have been no less than seven previous attempts to introduce real accountability at ICANN. They have all failed to achieve a fundamental goal: override or impact ICANN corporate
(under whatever circumstances).<o:p></o:p></span></p>
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<p class="MsoNormal"><span style="font-family:"Calibri","sans-serif";color:black"><o:p> </o:p></span></p>
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<p class="MsoNormal"><span style="font-family:"Calibri","sans-serif";color:black">In the specific cases where the override recommendations have been explicit, they have been undermined at the last step by ICANN internal legal advice.<o:p></o:p></span></p>
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<p class="MsoNormal"><span style="font-family:"Calibri","sans-serif";color:black"><o:p> </o:p></span></p>
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<p class="MsoNormal"><span style="font-family:"Calibri","sans-serif";color:black">This group has, to some degree, learned from the past by deciding that it needs to get independent legal advice for its recommendations as part of the process. <o:p></o:p></span></p>
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<p class="MsoNormal"><span style="font-family:"Calibri","sans-serif";color:black"><o:p> </o:p></span></p>
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<p class="MsoNormal"><span style="font-family:"Calibri","sans-serif";color:black">Even more usefully, ICANN's legal team has been prompted into providing its own legal analysis so we know what its position is ahead of time.<o:p></o:p></span></p>
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<p class="MsoNormal"><span style="font-family:"Calibri","sans-serif";color:black"><o:p> </o:p></span></p>
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<p class="MsoNormal"><span style="font-family:"Calibri","sans-serif";color:black">Aside from the fact that I think allowing ICANN to pay for the external independent legal advice is foolish in the extreme, I see two fundamental issues for this group to discuss
and reach agreement on if this process is to have the desired end result. <o:p></o:p></span></p>
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<p class="MsoNormal"><span style="font-family:"Calibri","sans-serif";color:black"><o:p> </o:p></span></p>
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<p class="MsoNormal"><span style="font-family:"Calibri","sans-serif";color:black">And they are:<o:p></o:p></span></p>
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<p class="MsoNormal"><span style="font-family:"Calibri","sans-serif";color:black"><o:p> </o:p></span></p>
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<p class="MsoNormal"><span style="font-family:"Calibri","sans-serif";color:black">1. What happens if/when the independent legal advice say a particular mechanism is perfectly legal but ICANN's internal legal advice say it isn't?<o:p></o:p></span></p>
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<p class="MsoNormal"><span style="font-family:"Calibri","sans-serif";color:black"><o:p> </o:p></span></p>
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<p class="MsoNormal"><span style="font-family:"Calibri","sans-serif";color:black">What will Board members do? How do we ensure this discussion happens publicly and with plenty of time remaining?<o:p></o:p></span></p>
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<p class="MsoNormal"><span style="font-family:"Calibri","sans-serif";color:black"><o:p> </o:p></span></p>
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<p class="MsoNormal"><span style="font-family:"Calibri","sans-serif";color:black">I think we should ask Board members now what they would do. Would they be willing to override internal legal advice, and under what circumstances? Will they commit to some kind
of binding arbitration in the event that the two legal advices conflict in fundamentally important ways?<o:p></o:p></span></p>
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<p class="MsoNormal"><span style="font-family:"Calibri","sans-serif";color:black"><o:p> </o:p></span></p>
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<p class="MsoNormal"><span style="font-family:"Calibri","sans-serif";color:black">This is an almost inevitable scenario so let's get ahead of it now and make reasoned decisions before the pressure and politics come into play. Plan ahead.<o:p></o:p></span></p>
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<p class="MsoNormal"><span style="font-family:"Calibri","sans-serif";color:black"><o:p> </o:p></span></p>
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<p class="MsoNormal"><span style="font-family:"Calibri","sans-serif";color:black"><o:p> </o:p></span></p>
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<p class="MsoNormal"><span style="font-family:"Calibri","sans-serif";color:black">2. A fundamentally piece of the accountability mechanisms that are likely to be recommended includes making ICANN a member organization of some type.<o:p></o:p></span></p>
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<p class="MsoNormal"><span style="font-family:"Calibri","sans-serif";color:black"><o:p> </o:p></span></p>
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<p class="MsoNormal"><span style="font-family:"Calibri","sans-serif";color:black">We have Jones Day on record as saying that don't think California law allows anyone but the Board to make final decisions (in fact, they don't actually say that if you read it
carefully because they know it's not true).<o:p></o:p></span></p>
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<p class="MsoNormal"><span style="font-family:"Calibri","sans-serif";color:black"><o:p> </o:p></span></p>
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<p class="MsoNormal"><span style="font-family:"Calibri","sans-serif";color:black">What we don't have is Jones Day/ICANN on record talking about the other legal get-out clause they have used in the past when it comes to accountability: anti-trust law.<o:p></o:p></span></p>
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<p class="MsoNormal"><span style="font-family:"Calibri","sans-serif";color:black"><o:p> </o:p></span></p>
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<p class="MsoNormal"><span style="font-family:"Calibri","sans-serif";color:black">ICANN's particular interpretation of anti-trust law has been pulled out as a final defense multiple times but I haven't seen it yet in this latest round of accountability discussions,
so it is more than possible that it is holding back that particular defense now that the "California law corporate code" genie is out of the bottle. <o:p></o:p></span></p>
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<p class="MsoNormal"><span style="font-family:"Calibri","sans-serif";color:black"><o:p> </o:p></span></p>
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<p class="MsoNormal"><span style="font-family:"Calibri","sans-serif";color:black">I can easily see a scenario where we all agree that it is possible to make these changes under California corporate law and then agree to hand over IANA to ICANN only to find
that the Board discovers at the last minute that they also violate anti-trust law and so, regretfully, cannot be implemented. <o:p></o:p></span></p>
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<p class="MsoNormal"><span style="font-family:"Calibri","sans-serif";color:black"><o:p> </o:p></span></p>
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<p class="MsoNormal"><span style="font-family:"Calibri","sans-serif";color:black">So I would ask this group to try to get ICANN's formal position on anti-trust law with respect to possible changes and also get independent legal advice on that aspect too. <o:p></o:p></span></p>
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<p class="MsoNormal"><span style="font-family:"Calibri","sans-serif";color:black"><o:p> </o:p></span></p>
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<p class="MsoNormal"><span style="font-family:"Calibri","sans-serif";color:black">I would also recommend that people go through previous failures to introduce recommendations and try to find what the legal justifications were that prevented them from being
implemented. And then do the same pre-emptive work so we don't end up repeating history. <o:p></o:p></span></p>
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<p class="MsoNormal"><span style="font-family:"Calibri","sans-serif";color:black"><o:p> </o:p></span></p>
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<p class="MsoNormal"><span style="font-family:"Calibri","sans-serif";color:black">Hope this is useful.<o:p></o:p></span></p>
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<p class="MsoNormal"><span style="font-family:"Calibri","sans-serif";color:black">Kieren<o:p></o:p></span></p>
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<p class="MsoNormal"><span style="font-family:"Calibri","sans-serif";color:black"><o:p> </o:p></span></p>
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