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

Alan Greenberg alan.greenberg at mcgill.ca
Mon Dec 14 22:05:03 UTC 2015 

The ALAC has been raising this issue multiple times with no answers.

Another related question is whether we can 
require a binding pre-seating letter saying that 
the director waives all rights to sue for 
defamations (or whatever) related to the removal process.

Alan

At 14/12/2015 03:29 PM, Aikman-Scalese, Anne wrote:

>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
><mailto:AAikman at lrrlaw.com>AAikman at lrrlaw.com | 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
><mailto:holly.gregory at sidley.com>holly.gregory at sidley.com
>
>From: Aikman-Scalese, Anne 
>[<mailto:AAikman at lrrlaw.com>mailto:AAikman at lrrlaw.com]
>Sent: Monday, December 14, 2015 3:03 PM
>To: Gregory, Holly; 'Steve DelBianco'
>Cc: 
><mailto:gregshatanipc at gmail.com>gregshatanipc at gmail.com; 
>'Phil Corwin'; 
><mailto:cwilson at 21cf.com>cwilson at 21cf.com; 
>Rosemary Fei 
>(<mailto:rfei at adlercolvin.com>rfei at adlercolvin.com); 
>Thomas Rickert; 
><mailto:ipc_accountabilityct at icann.org>ipc_accountabilityct at icann.org; 
>'Gomes, Chuck' (<mailto:cgomes at verisign.com>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 ccould 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
><mailto:AAikman at lrrlaw.com>AAikman at lrrlaw.com | www.LRRLaw.com
>
>
>
>From: Gregory, Holly 
>[<mailto:holly.gregory at sidley.com>mailto:holly.gregory at sidley.com]
>Sent: Monday, December 14, 2015 12:43 PM
>To: Aikman-Scalese, Anne; 'Steve DelBianco'
>Cc: 
><mailto:gregshatanipc at gmail.com>gregshatanipc at gmail.com; 
>'Phil Corwin'; 
><mailto:cwilson at 21cf.com>cwilson at 21cf.com; 
>Rosemary Fei 
>(<mailto:rfei at adlercolvin.com>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 indemnificcation 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
><mailto:holly.gregory at sidley.com>holly.gregory at sidley.com
>
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