[Acct-Legal] [CCWG-ACCT] Legal question

Wed Apr 22 12:07:52 UTC 2015

Kavouss,

Can you please be specific about the answer to which you refer?

Thank you,

Greg Shatan

On Wednesday, April 22, 2015, Kavouss Arasteh <kavouss.arasteh at gmail.com>
wrote:

> Dear Leon,
> I  have not been given the right asnswer by Law Firm
> May I attend your sub com. legal?
> At what time today , wednesday 22 April pls
> Provide me the time , agenda, doc and adobe
> Kavouss
>
>
> 2015-04-22 8:22 GMT+02:00 Dr Eberhard W Lisse <el at lisse.na
> <javascript:_e(%7B%7D,'cvml','el at lisse.na');>>:
>
>> Dear Co-Chairs,
>>
>> I object against a sub team making any such decision (whether to refer).
>>
>> el
>>
>> --
>> Sent from Dr Lisse's iPad mini
>>
>> On Apr 22, 2015, at 06:16, List for the work of CCWG-Accountability Legal
>> SubTeam <ccwg-accountability5 at icann.org
>> <javascript:_e(%7B%7D,'cvml','ccwg-accountability5 at icann.org');>> wrote:
>>
>> I'm forwarding this email into the Legal Sub Team for possible referral
>> to counsel.  I'll forward a couple of replies afterwards.
>>
>> Greg Shatan
>> ---------- Forwarded message ----------
>> From: Chris Disspain <ceo at auda.org.au
>> <javascript:_e(%7B%7D,'cvml','ceo at auda.org.au');>>
>> Date: Tue, Apr 21, 2015 at 7:07 PM
>> Subject: Re: [CCWG-ACCT] Legal question
>> To: "Drazek, Keith" <kdrazek at verisign.com
>> <javascript:_e(%7B%7D,'cvml','kdrazek at verisign.com');>>
>> Cc: Accountability Cross Community <
>> accountability-cross-community at icann.org
>> <javascript:_e(%7B%7D,'cvml','accountability-cross-community at icann.org');>
>> >
>>
>>
>> Hi Keith,
>>
>> As promised I set out in brief below some of the reasons why, in respect
>> to the membership model and any model requiring the SOs and ACs to convert
>> to legal entities, I have serious concerns and why I referred to
>> significant sacrifices.
>>
>> GAC
>>
>> The current recommended model does not provide any viable solution for
>> dealing with the GAC. It seems obvious to me that the governments involved
>> in the GAC are not going to agree to form an unincorporated association
>> under Californian law. If I'm right then presumably the GAC would remain as
>> an advisory committee and would not be able to have a vote in any of the
>> escalation mechanisms. That may be fine as the GAC may not want to have a
>> vote anyway.
>>
>> However I see a serious incompatibility between the members’ powers and
>> the standing of GAC advice to the Board. It’s not that GAC advice is or
>> indeed should be invariably followed but currently where GAC advice is at
>> odds with the position of others in the community the advice carries
>> significant weight and there is a bylaw mandated process for rejecting the
>> advice through a process which takes around 6 months. The change to a
>> members based structure would mean that for certain issues the actions of
>> members will trump GAC advice. So there is a significant shift in the
>> carefully constructed balance of power. Now, many of us may think that such
>> a shift is no bad thing but I wonder whether the governments of the world
>> are going to agree?
>>
>> ccTLDs
>>
>> When we set up the ccNSO and when we did the structural review of it some
>> time thereafter there was considerable discussion about how it could be
>> structured precisely to avoid the need for ccTLDs to join anything. There
>> was even significant concern about having to fill out a form and whether
>> that implied the existence of some organisation. The concerns included
>> joining something in the jurisdiction of the US and whether that would make
>> a ccTLD manager in any way subject to US law, the possibility of being sued
>> in the US because the manager would be deemed to have a presence there, how
>> such a structure would be funded (especially if it was sued), whether there
>> was any liability on ‘officers’ of the entity and so on. I believe that
>> many of these concerns will still exist for many ccTLDs.
>>
>> Further, quite a number of ccTLD managers are departments of the relevant
>> government or quasi-government bodies. Not everyone runs their ccTLD with
>> the degree of freedom that .au, .ca, .uk and .nl are privileged to enjoy. I
>> consider it highly unlikely that sovereign governments will permit a
>> government department to join an association in the US (or any other
>> country for that matter).
>>
>> At Large
>>
>> I don’t know the answer to this but it strikes me that the structure may
>> also be problematic for At Large community as opposed to ALAC. On that one
>> over the ALAC folks to comment.
>>
>> There’s more but I'm rushing for my flight now. Hope this gives you a
>> flavour.
>>
>>
>>
>> Cheers,
>>
>>
>> Chris
>>
>> On 21 Apr 2015, at 20:46 , Chris Disspain <ceo at auda.org.au
>> <javascript:_e(%7B%7D,'cvml','ceo at auda.org.au');>> wrote:
>>
>> Hi Keith,
>>
>> Thanks for the below. You ask a valid question and Kavouss has sent me an
>> email asking the same.  I will respond in detail in the next 7 hours or so.
>>
>> Chris Disspain
>> CEO - auDA
>>
>> On 21 Apr 2015, at 20:16, Drazek, Keith <kdrazek at verisign.com
>> <javascript:_e(%7B%7D,'cvml','kdrazek at verisign.com');>> wrote:
>>
>>  Thanks Chris, no apologies necessary...this is exactly the kind of
>> dialogue needed to advance our work.
>>
>>  Can you be more explicit about the "significant number of sacrifices
>> that would need to be made in a membership scenario" that ccTLDs face?
>> Particularly if any are unique to ccTLDs?
>>
>>  Sacrifices may be needed (including from the Board) if we are to
>> accomplish the community's broader goal of ensuring the ICANN Board and
>> Staff are truly accountable to the ICANN community for the next decade. As
>> such, it would be good to know, as early as possible, what those sacrifices
>> might be.
>>
>>  In simple terms, I agree that determining what can and cannot be
>> accomplished within the existing structure is a worthwhile exercise and
>> will help to inform the community.
>>
>>  Based on our work and the relevant independent legal analysis to date,
>> it appears to me that the current construct has significant gaps and
>> shortcomings and won't deliver on our goals, but I support seeking further
>> advice on the topic from our independent legal advisors.
>>
>>  Thanks and regards,
>> Keith
>>
>> On Apr 21, 2015, at 5:08 AM, Chris Disspain <ceo at auda.org.au
>> <javascript:_e(%7B%7D,'cvml','ceo at auda.org.au');>> wrote:
>>
>>   Thanks Keith.
>>
>>  I apologise for pinging back and forth on this but I hope the list will
>> appreciate that it as an indication of how important auDA believes this
>> point is.
>>
>>  As I said on the CCWG call last week, I have serious concerns about the
>> viability of the lawyers' recommended structural changes (at least from a
>> cc point of view) and want to be crystal clear about what we can do or
>> cannot do within the current structure.
>>
>>  For a ccTLD there are a significant number of sacrifices that would
>> need to be made in a membership scenario and I don't believe the cc
>> community can decide whether those sacrifices are worth making unless we
>> can weigh them against what we would be able to achieve using the current
>> structure.
>>
>>  I think that is essential that our output to the community contains a
>> clear explanation of what the status quo can achieve. If it does not then
>> IMO it is impossible to judge the other scenarios.
>>
>>  I appreciate your second para and, as a lawyer, I know that time for a
>> response is required. I also appreciate the time constraints under which we
>> are operating. But we will lose more time if the result of our document is
>> a series of questions about whether there really is a need to make the
>> significant changes being recommended.
>>
>>  In simple terms 'not nearly enough' is not an acceptable response. How
>> can I know that "it" is not nearly enough unless I know what "it" is?
>>
>>  Chris Disspain
>> CEO - auDA
>>
>> On 21 Apr 2015, at 18:37, Drazek, Keith <kdrazek at verisign.com
>> <javascript:_e(%7B%7D,'cvml','kdrazek at verisign.com');>> wrote:
>>
>>
>>  Chris,
>>
>>  I believe the answer to your question regarding the "no change
>> scenario" and "what the current configuration can achieve" is, "Not nearly
>> enough."
>>
>>  That said, I think it's a reasonable question and it should be referred
>> to the CCWG's lawyers and they should be permitted reasonable time to
>> consider and respond.
>>
>>  Regards,
>> Keith
>>
>>
>>
>> Sent from my iPhone
>>
>> On Apr 21, 2015, at 4:09 AM, Chris Disspain <ceo at auda.org.au
>> <javascript:_e(%7B%7D,'cvml','ceo at auda.org.au');>> wrote:
>>
>>   Greg,
>>
>>  Thanks. At the risk of repeating myself, whilst I understand what you
>> are saying, it is precisely the no change scenario that I am seeking
>> clarity on. I accept that the current configuration may not be "a very good
>> vehicle for many of the enhanced powers" but I want clarity on what the
>> current configuration CAN  achieve. I don't believe we have that yet.
>>
>> Chris Disspain
>> CEO - auDA
>>
>> On 21 Apr 2015, at 17:35, Greg Shatan <gregshatanipc at gmail.com
>> <javascript:_e(%7B%7D,'cvml','gregshatanipc at gmail.com');>> wrote:
>>
>>  Chris,
>>
>>  The simple answer is that the SOACs as currently configured are not
>> a very good vehicle for many of the enhanced powers we seek. Once you make
>> them into members and give them legal personhood everything else becomes
>> much easier.
>>
>>  However, you assumed no change to the SOACs, which made the answers
>> much harder.
>>
>>  Greg
>>
>> On Tuesday, April 21, 2015, Chris Disspain <ceo at auda.org.au
>> <javascript:_e(%7B%7D,'cvml','ceo at auda.org.au');>> wrote:
>>
>>> Greg, All,
>>>
>>>  With respect, I think we are overcomplicating the issue. I simply want
>>> to gain a base line for the discussion about any changes necessary  to
>>> achieve what we want. We agreed on jurisdiction that if we can get
>>> acceptable escalations and remedies without changing jurisdiction then we
>>> should leave well alone for now, I think we should apply the same principle
>>> here. I am clear what the lawyers recommend we do BUT I am not clear about
>>> what we can do or what compromises we need to make if we were to maintain
>>> the current structure. I think that is a key part of our deliberations.
>>>
>>>
>>>
>>> Cheers,
>>>
>>>
>>> Chris
>>>
>>>  On 21 Apr 2015, at 16:59 , Greg Shatan <gregshatanipc at gmail.com> wrote:
>>>
>>>  Kavouss,
>>>
>>>  That is not a correct summary of my views.  Bylaws provisions are
>>> generally enforceable.  (As an aside, "enforceable" can be use to mean two
>>> different things: (1) is the provision valid, so that an enforcement effort
>>> will not fail, and (2) can the other party or parties undertake an effort
>>> to enforce the provision by commencing litigation.  I have tried to deal
>>> with both aspects of "enforceability," without veering too far into other
>>> ways of getting ones way (e.g., California AG, political pressure,
>>> Congressional investigation, pulling out and creating an alternate IANA,
>>> etc.)
>>>
>>>  In spite of the general rule, there are two issues in this specific
>>> circumstance that undercut this general rule of enforceability.  First, a
>>> couple of the specific powers that Chris mentions are ones where a third
>>> party is given a right superior the Board to make a decision regarding the
>>> management of the company (veto of budget and arbitration to enforce the
>>> veto of budget).  In a member organization, the members can appropriately
>>> be in this superior position.  In a non-member organization, that is
>>> inconsistent with the role of the Board, which brings the validity of these
>>> bylaw changes as hypothesized by Chris into question.  Second, the SO/ACs,
>>> as entities currently without legal personhood, would likely not be able to
>>> participate in a litigation to enforce these bylaws; thus, the second type
>>> of enforceability is also an issue.
>>>
>>>  It may be less troublesome for ICANN to enter into contracts and agree
>>> with third parties (i.e., the SO/ACs) that these third parties have the
>>> right to veto the budget. (Companies may be able to agree with third
>>> parties to do things that could not be part of their internal governance
>>> schema.) However, on further reflection, even this approach has its issues
>>> -- as the SO/ACs lack legal personhood currently, they cannot enter into
>>> contracts, either.  (By contrast, the bylaws changes can at least be put
>>> into place without any action on the SO/AC's part.)
>>>
>>>  I should note that granting third parties the right to approve a bylaw
>>> change (the third hypothetical action in Chris's email) is not as
>>> exceptional, so is less likely to raise validity concerns.  This still
>>> leaves the issue that the SO/AC's lack the requisite legal existence to
>>> commence legal action to enforce a bylaws change in the event the Board
>>> fails to recognize such a bylaws change.
>>>
>>>  In my opinion this kind of complexity and uncertainty is precisely why
>>> the member model should be adopted.
>>>
>>>  Greg
>>>
>>> On Tue, Apr 21, 2015 at 2:25 AM, Kavouss Arasteh <
>>> kavouss.arasteh at gmail.com> wrote:
>>>
>>>>  Dear All
>>>> We complicating the case by envisaging the most extreme exceptional
>>>> circumstances.
>>>> In view of Greg, a Contract provisions are enforceable compared to
>>>> Bylaws provisions which in his views are not enforceable!
>>>> We may put the questions and answers to the lawyers and wait whether
>>>> are consent?
>>>> Could someone take necessary action ( e. g.) co chair in this regard?
>>>> Tks
>>>> Kavousd
>>>>
>>>>
>>>> Sent from my iPhone
>>>>
>>>> On 21 Apr 2015, at 08:02, Greg Shatan <gregshatanipc at gmail.com> wrote:
>>>>
>>>>   The questions are simple.  The answers may not be....
>>>>
>>>>  Also, it depends on what the lawyers are currently working on.
>>>> Further, the meeting is in about 13 hours, and I expect (given the time)
>>>> at least 6-8 of those hours will be used for sleep and commuting.  So, it's
>>>> not a lot of time.
>>>>
>>>>  My views are as follows:
>>>>
>>>>  On question 1, I think there may be issues in granting this right via
>>>> bylaw, except to statutory members (and possibly to designators, at least
>>>> where formally denoted as such), but these many not sufficient issues to
>>>> cause the bylaw to be invalid.  If it's found to be invalid in court, then
>>>> it would be unenforceable.  However, I believe that something similar could
>>>> be achieved by contract, which should then be enforceable.
>>>>
>>>>  On question 2, I would say that the Board cannot ignore an action
>>>> mandated by the bylaws without some consequences.  The SOs and ACs as
>>>> currently constituted may not have the necessary legal personhood to pursue
>>>> litigation.  However, this could be reported to the California Attorney
>>>> General, who has broad oversight powers relating to non-profits, and would
>>>> probably be quite interested to hear about a relatively high-profile
>>>> non-profit where the Board was ignoring actions mandated by duly approved
>>>> bylaws.  This could certainly be considered "enforcement," broadly
>>>> speaking.  There may also be other parties with legal personhood that could
>>>> pursue litigation, and other governmental entities (Congress?) that could
>>>> make this an exceedingly difficult choice to sustain.
>>>>
>>>>  On 3, if the bylaw says the Board is bound, they're bound, unless the
>>>> Board were to successfully challenge the validity of the bylaw.  Again, it
>>>> may be possible to achieve this by contract, with fewer questions raised.
>>>> And again, there may be issues in granting this right to parties other than
>>>> members (or possibly formally recognized designators), but those issues may
>>>> not invalidate the bylaw.
>>>>
>>>>  On 4, I think the answers to question 2 apply here as well.
>>>>
>>>>  We can see if counsel agrees with this....
>>>>
>>>>  Greg
>>>> Caveat: not legal advice, not admitted in California
>>>>
>>>> On Tue, Apr 21, 2015 at 12:55 AM, Chris Disspain <ceo at auda.org.au>
>>>> wrote:
>>>>
>>>>> Hi León,
>>>>>
>>>>>  Really? They are fairly simple questions. As I said, I can ask them
>>>>> on the call.
>>>>>
>>>>>
>>>>>
>>>>>
>>>>> Cheers,
>>>>>
>>>>>
>>>>> Chris
>>>>>
>>>>>  On 21 Apr 2015, at 14:32 , León Felipe Sánchez Ambía <
>>>>> leonfelipe at sanchez.mx> wrote:
>>>>>
>>>>>  Thanks Greg,
>>>>>
>>>>>  I just want to note that for the short notice it is unlikely we will
>>>>> be able to have answers to feed the discussion in our call tomorrow.
>>>>>
>>>>>
>>>>>  Best regards,
>>>>>
>>>>>
>>>>>  León
>>>>>
>>>>>  El 20/04/2015, a las 23:22, List for the work of CCWG-Accountability
>>>>> Legal SubTeam <ccwg-accountability5 at icann.org> escribió:
>>>>>
>>>>>  I am forwarding Chris Disspain's email into the Legal Sub Team for
>>>>> further consideration.  I will let our counsels respond, should the Legal
>>>>> Sub Team's discussion result in a referral of the questions to counsel.
>>>>>
>>>>>
>>>>>  Greg Shatan
>>>>>
>>>>>  ---------- Forwarded message ----------
>>>>> From: Chris Disspain <ceo at auda.org.au>
>>>>> Date: Tue, Apr 21, 2015 at 12:03 AM
>>>>> Subject: [CCWG-ACCT] Legal question
>>>>> To: Accountability Cross Community <
>>>>> accountability-cross-community at icann.org>
>>>>>
>>>>>
>>>>> Hello All,
>>>>>
>>>>>  I’m not sure if this email should be addressed to the whole group,
>>>>> the legal sub-team or some other. Anyway, I have some questions that I
>>>>> would appreciate answers to from the CCWG’s lawyers. Happy to discuss on
>>>>> the upcoming CCWG call.
>>>>>
>>>>>  Under the current structure of ICANN and its SOs and ACs
>>>>>
>>>>>  1. Is it correct that a bylaw saying that a combination of those SOs
>>>>> and ACs can veto the budget or veto a bylaw change can be drafted and put
>>>>> in to the bylaws?
>>>>>
>>>>>  2. Is it correct that were there to be such a bylaw and the SOs and
>>>>> ACs were to veto the budget or a bylaw change pursuant to that bylaw then
>>>>> the Board of ICANN could ignore that veto and that the SOs and ACs could
>>>>> not enforce the veto?
>>>>>
>>>>>  3. Is it correct that the veto bylaw could be drafted to require
>>>>> binding arbitration in the event that the Board refused to follow the SO/AC
>>>>> veto and if so would the Board be bound by the arbitration finding?
>>>>>
>>>>>  4. Is it correct that a Board spill bylaw could be inserted in to
>>>>> the bylaws and if triggered would be enforceable?
>>>>>
>>>>>
>>>>>
>>>>> Cheers,
>>>>>
>>>>>
>>>>> Chris
>>>>>
>>>>>  On 18 Apr 2015, at 14:50 , León Felipe Sánchez Ambía <
>>>>> leonfelipe at sanchez.mx> wrote:
>>>>>
>>>>>  All,
>>>>>
>>>>>  I am forwarding this document from Counsel for your records and for
>>>>> its relevance for our overall work.
>>>>>
>>>>>
>>>>>  Best regards,
>>>>>
>>>>>
>>>>>  León
>>>>>
>>>>>  Inicio del mensaje reenviado:
>>>>>
>>>>> *Para: *"ccwg-accountability5 at icann.org" <
>>>>> ccwg-accountability5 at icann.org>
>>>>>  *Fecha: *17 de abril de 2015 22:21:36 GMT-5
>>>>>  *De: *List for the work of CCWG-Accountability Legal SubTeam <
>>>>> ccwg-accountability5 at icann.org>
>>>>>  *Asunto: **[Acct-Legal] (no subject)*
>>>>>  *Responder a: *ccwg-accountability5 at icann.org
>>>>>
>>>>>
>>>>>
>>>>>  Dear Legal Sub-Team,  Attached please find revisions to the chart
>>>>> comparing the member and designator approaches  from Sidley and Adler &
>>>>> Colvin as requested.  Please note that in our cover memo we have posed
>>>>> several questions for your consideration.  We have also provided a
>>>>> discussion of some considerations regarding implementation of both
>>>>> approaches.  We are look forward to discussing with CCWG next week.  Kind
>>>>> regards, Holly
>>>>>
>>>>>  *HOLLY J.  GREGORY*
>>>>>
>>>>> * Partner *
>>>>> *Sidley Austin LLP*
>>>>> +1.212.839.5853
>>>>> holly.gregory at sidley.com
>>>>>
>>>>>
>>>>>
>>>>>
>>>>>
>>>>> ****************************************************************************************************
>>>>> This e-mail is sent by a law firm and may contain information that is
>>>>> privileged or confidential.
>>>>> If you are not the intended recipient, please delete the e-mail and
>>>>> any attachments and notify us
>>>>> immediately.
>>>>>
>>>>>
>>>>> ****************************************************************************************************
>>>>>
>>>>>   <Legal Assessment_  Governance Chart.pdf>
>>>>>
>>>>> _______________________________________________
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