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<p class="f85eb409-fef9-4230-a582-d02cd111ec6e">Agreed<br>
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Sent with Good (www.good.com)<br>
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<hr tabindex="-1">
<font face="Tahoma" size="2"><b>From:</b> Rosemary E. Fei<br>
<b>Sent:</b> Monday, December 14, 2015 06:41:09 PM<br>
<b>To:</b> Aikman-Scalese, Anne; Gregory, Holly; 'Steve DelBianco'<br>
<b>Cc:</b> gregshatanipc@gmail.com; 'Phil Corwin'; cwilson@21cf.com; Thomas Rickert; ipc_accountabilityct@icann.org; 'Gomes, Chuck' (cgomes@verisign.com); Sidley ICANN CCWG; ICANN-Adler; accountability-cross-community@icann.org<br>
<b>Subject:</b> RE: CCWG - ACCT - Recommendation 4 - Community Powers<br>
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<p class="MsoNormal"><span style="font-size:10.0pt; font-family:"Arial","sans-serif"; color:black">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.</span></p>
<p class="MsoNormal"><span style="font-size:10.0pt; font-family:"Arial","sans-serif"; color:black"> </span></p>
<p class="MsoNormal"><span style="font-size:10.0pt; font-family:"Arial","sans-serif"; color:black">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.</span></p>
<p class="MsoNormal"><span style="font-size:10.0pt; font-family:"Arial","sans-serif"; color:black"> </span></p>
<p class="MsoNormal"><span style="font-size:10.0pt; font-family:"Arial","sans-serif"; color:black">Rosemary
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<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""> Aikman-Scalese, Anne [mailto:AAikman@lrrlaw.com]
<br>
<b>Sent:</b> Monday, December 14, 2015 12:29 PM<br>
<b>To:</b> Holly Gregory; 'Steve DelBianco'<br>
<b>Cc:</b> gregshatanipc@gmail.com; 'Phil Corwin'; cwilson@21cf.com; Rosemary E. Fei; Thomas Rickert; ipc_accountabilityct@icann.org; 'Gomes, Chuck' (cgomes@verisign.com); Rosemary E. Fei; Sidley ICANN CCWG; ICANN-Adler; accountability-cross-community@icann.org<br>
<b>Subject:</b> RE: CCWG - ACCT - Recommendation 4 - Community Powers</span></p>
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<p class="MsoNormal"> </p>
<p class="MsoNormal"><span style="color:#1F497D">If the Chairs want to certify the legal questions, I think these would be:</span></p>
<p class="MsoNormal"><span style="color:#1F497D"> </span></p>
<p class="MsoListParagraph" style="text-indent:-.25in"><span style="color:#1F497D"><span style="">1.<span style="font:7.0pt "Times New Roman"">
</span></span></span><span style="color:#1F497D">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?</span></p>
<p class="MsoListParagraph"><span style="color:#1F497D"> </span></p>
<p class="MsoListParagraph" style="text-indent:-.25in"><span style="color:#1F497D"><span style="">2.<span style="font:7.0pt "Times New Roman"">
</span></span></span><span style="color:#1F497D">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?</span></p>
<p class="MsoListParagraph"><span style="color:#1F497D"> </span></p>
<p class="MsoListParagraph" style="text-indent:-.25in"><span style="color:#1F497D"><span style="">3.<span style="font:7.0pt "Times New Roman"">
</span></span></span><span style="color:#1F497D">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?</span></p>
<p class="MsoNormal"><span style="color:#1F497D"> </span></p>
<p class="MsoNormal"><span style="color:#1F497D">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.</span></p>
<p class="MsoNormal"><span style="color:#1F497D">Anne</span></p>
<p class="MsoNormal"><span style="color:#1F497D"> </span></p>
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<p class="MsoNormal"><b><span style="font-size:9.0pt; color:black">Anne E. Aikman-Scalese, Of Counsel</span></b><span style="color:#1F497D"></span></p>
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<p class="MsoNormal"><span style="color:#1F497D"> </span></p>
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<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""> Gregory, Holly [<a href="mailto:holly.gregory@sidley.com">mailto:holly.gregory@sidley.com</a>]
<br>
<b>Sent:</b> Monday, December 14, 2015 1:14 PM<br>
<b>To:</b> Aikman-Scalese, Anne; 'Steve DelBianco'<br>
<b>Cc:</b> <a href="mailto:gregshatanipc@gmail.com">gregshatanipc@gmail.com</a>; 'Phil Corwin';
<a href="mailto:cwilson@21cf.com">cwilson@21cf.com</a>; Rosemary Fei (<a href="mailto:rfei@adlercolvin.com">rfei@adlercolvin.com</a>); Thomas Rickert;
<a href="mailto:ipc_accountabilityct@icann.org">ipc_accountabilityct@icann.org</a>; 'Gomes, Chuck' (<a href="mailto:cgomes@verisign.com">cgomes@verisign.com</a>); Rosemary Fei (<a href="mailto:rfei@adlercolvin.com">rfei@adlercolvin.com</a>); Sidley ICANN CCWG;
<a href="mailto:ICANN@adlercolvin.com">ICANN@adlercolvin.com</a><br>
<b>Subject:</b> RE: CCWG - ACCT - Recommendation 4 - Community Powers</span></p>
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<p class="MsoNormal"> </p>
<p class="MsoNormal"><span style="color:#1F497D">We must await further direction from the co-chairs whether this is something that they would like research on under California law</span></p>
<p class="MsoNormal"><span style="color:#1F497D"> </span></p>
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<p class="MsoNormal" style=""><b><span style="font-size:10.0pt; font-family:"Arial","sans-serif"; color:#1F497D">HOLLY</span></b><span style="font-size:9.0pt; font-family:"Arial","sans-serif"; color:#1F497D"> </span><b><span style="font-size:10.0pt; font-family:"Arial","sans-serif"; color:#1F497D">GREGORY</span></b><span style="font-size:9.0pt; font-family:"Arial","sans-serif"; color:#1F497D"><br>
Partner<br>
<br>
</span><b><span style="font-size:10.0pt; font-family:"Arial","sans-serif"; color:#1F497D">Sidley Austin LLP</span></b><b><span style="font-size:9.0pt; font-family:"Arial","sans-serif"; color:#1F497D"><br>
</span></b><span style="font-size:9.0pt; font-family:"Arial","sans-serif"; color:#1F497D">+1 212 839 5853<br>
<a href="mailto:holly.gregory@sidley.com" title="Click to send email to Gregory, Holly">holly.gregory@sidley.com</a></span></p>
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<p class="MsoNormal"><span style="font-size:10.0pt; font-family:"Arial","sans-serif"; color:#1F497D"> </span><span style="color:#1F497D"></span></p>
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<p class="MsoNormal" style="margin-left:.5in"><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""> Aikman-Scalese, Anne [<a href="mailto:AAikman@lrrlaw.com">mailto:AAikman@lrrlaw.com</a>]
<br>
<b>Sent:</b> Monday, December 14, 2015 3:03 PM<br>
<b>To:</b> Gregory, Holly; 'Steve DelBianco'<br>
<b>Cc:</b> <a href="mailto:gregshatanipc@gmail.com">gregshatanipc@gmail.com</a>; 'Phil Corwin';
<a href="mailto:cwilson@21cf.com">cwilson@21cf.com</a>; Rosemary Fei (<a href="mailto:rfei@adlercolvin.com">rfei@adlercolvin.com</a>); Thomas Rickert;
<a href="mailto:ipc_accountabilityct@icann.org">ipc_accountabilityct@icann.org</a>; 'Gomes, Chuck' (<a href="mailto:cgomes@verisign.com">cgomes@verisign.com</a>)<br>
<b>Subject:</b> RE: CCWG - ACCT - Recommendation 4 - Community Powers</span></p>
</div>
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<p class="MsoNormal" style="margin-left:.5in"> </p>
<p class="MsoNormal" style="margin-left:.5in"><span style="color:#1F497D">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.
</span></p>
<p class="MsoNormal" style="margin-left:.5in"><span style="color:#1F497D"> </span></p>
<p class="MsoNormal" style="margin-left:.5in"><span style="color:#1F497D">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.
<u>The SO/AC would likely need legal advice just to draft the “written justification.”</u>
</span></p>
<p class="MsoNormal" style="margin-left:.5in"><span style="color:#1F497D"> </span></p>
<p class="MsoNormal" style="margin-left:.5in"><span style="color:#1F497D">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.</span></p>
<p class="MsoNormal" style="margin-left:.5in"><span style="color:#1F497D"> </span></p>
<p class="MsoNormal" style="margin-left:.5in"><span style="color:#1F497D">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.</span></p>
<p class="MsoNormal" style="margin-left:.5in"><span style="color:#1F497D">Anne </span>
</p>
<p class="MsoNormal" style="margin-left:.5in"><span style="color:#1F497D"> </span></p>
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<p class="MsoNormal"><b><span style="font-size:9.0pt; color:black">Anne E. Aikman-Scalese, Of Counsel</span></b><span style="color:#1F497D"></span></p>
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<p class="MsoNormal" style="margin-left:.5in"><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""> Gregory, Holly [<a href="mailto:holly.gregory@sidley.com">mailto:holly.gregory@sidley.com</a>]
<br>
<b>Sent:</b> Monday, December 14, 2015 12:43 PM<br>
<b>To:</b> Aikman-Scalese, Anne; 'Steve DelBianco'<br>
<b>Cc:</b> <a href="mailto:gregshatanipc@gmail.com">gregshatanipc@gmail.com</a>; 'Phil Corwin';
<a href="mailto:cwilson@21cf.com">cwilson@21cf.com</a>; Rosemary Fei (<a href="mailto:rfei@adlercolvin.com">rfei@adlercolvin.com</a>); Thomas Rickert<br>
<b>Subject:</b> RE: CCWG - ACCT - Recommendation 4 - Community Powers</span></p>
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<p class="MsoNormal" style="margin-left:.5in"><span style="color:#1F497D">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
</span></p>
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<p class="MsoNormal" style="margin-left:.5in"><b><span style="font-size:10.0pt; font-family:"Arial","sans-serif"; color:#1F497D">HOLLY</span></b><span style="font-size:9.0pt; font-family:"Arial","sans-serif"; color:#1F497D"> </span><b><span style="font-size:10.0pt; font-family:"Arial","sans-serif"; color:#1F497D">GREGORY</span></b><span style="font-size:9.0pt; font-family:"Arial","sans-serif"; color:#1F497D"><br>
Partner<br>
<br>
</span><b><span style="font-size:10.0pt; font-family:"Arial","sans-serif"; color:#1F497D">Sidley Austin LLP</span></b><b><span style="font-size:9.0pt; font-family:"Arial","sans-serif"; color:#1F497D"><br>
</span></b><span style="font-size:9.0pt; font-family:"Arial","sans-serif"; color:#1F497D">+1 212 839 5853<br>
<a href="mailto:holly.gregory@sidley.com" title="Click to send email to Gregory, Holly">holly.gregory@sidley.com</a></span></p>
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