[CCWG-ACCT] responding to Eric's questions

[Greg Shatan]

I've added an additional response on the last point, in green.

Greg Shatan

*Gregory S. Shatan *

Partner | *Abelman Frayne & Schwab*

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On Thu, Jan 22, 2015 at 12:58 PM, Burr, Becky <Becky.Burr at neustar.biz>
wrote:

>  Responding to Eric’s question re independent counsel, my responses are
> in *blue*.
>
>
>
> If one of the "free, soon, adequate" requirements can be waived, theneven
> I don't have my view, but the legal staff do meet those criteria,
>
> and their client is the corporation, which is capable of reorganization, a
> subject of interest for the purposes of exploring the "member" and
> "oversight" sets of issues.
>
>
>
> *I don’t think ICANN staff is adequate, for the reasons described below.
> Even if someone at Jones Day could be, ICANN will have to pay them, which
> knocks out that requirement.*
>
>
>
> I'm glad you mention fiduciary duty as there are no shareholders, rather
> stewards of the public trust exercising reasonable care, inquisitive ...the
> strictest standard of duty of care in American law.
>
>
>
> *This is one reason that I think we need to go outside.  ICANN Legal has
> asserted that the Board members have a fiduciary duty to the corporation,
> and that duty precludes them from agreeing to a binding dispute resolution
> mechanism. I have never heard them say that they have a duty under
> California law to the public trust, or suggest that such a duty trumps any
> obligation is may have to serve as the steward of a public interest. *
>
>
>
> As many members of the community having a material interest in unique
> endpoint identifiers are employed by for-profit entities with shareholders,
> the same meaning may not be conveyed when we use the same phrase.
>
>
>
> *Not sure I understand your point here*
>
>
>
> Would you do me the kindness (at some point in the proximal future, it isn't
> urgent) of providing a URL to the conclusion, and perhaps the
>
> supporting analysis, of the Berkman Center during the first ATRT review?
> I'm interested in which legal positions by the Corporation's legal staff
> they found in need of additional research.
>
>
>
> *The statement I referenced is actually in the Berkman ATRT1
> Recommendations: **https://www.icann.org/en/system/files/files/proposed-recommendations-20oct10-en.pdf
> <https://www.icann.org/en/system/files/files/proposed-recommendations-20oct10-en.pdf>.
> The following is from page 46:*
>
>
>
> In the course of broad consultations, ATRT received feedback to the effect
> that ICANN could enter into agreements with parties that called for binding
> arbitration without running afoul of California law. While this latitude
> could apply in a contractual context*, it is less clear and deserves
> further legal analysis as to what extent and through what mechanisms ICANN
> could agree to enter into binding arbitration more generally*.
>
>
>
> Again, were we constituted externally by some other corporate entity,
>
> then retaining our legal counsel rather than relying upon the legal
>
> counsel of the subject of our inquiry, concerning its reorganization,
>
> would be necessary for the reason you mention -- the ethical duty of
>
> counsel towards its clients -- but we -- the CCWG-whatever -- are not,
>
> and staff -- all of staff, from IT to Legal, as resources allocated by
>
> the executive, are available to us.  Absent a refusal to allocate or a
>
> demonstration of incompetence, why shouldn't we expect an adequate work
> product from staff counsel?
>
>
>
> *I was actually thinking of the ethical obligations of ICANN staff
> attorneys and outside counsel.  Given that ICANN has asserted that the
> Board’s fiduciary duty under California law prohibits the board from ceding
> authority to a binding dispute resolution procedure in this context, we
> already know that they have taken a position that is contrary to the
> community’s desire.  Given that, as well as the Berkman Center’s conclusion
> that this issue deserved further legal analysis, I don’t know how we could
> consider the staff/outside counsel to be unconflicted in this situation.
> (For the record, I am not sure that binding authority is absolutely
> necessary – depends on what other tools are available, e.g., spilling the
> Board.  Based on the what I heard in Frankfurt, however, the community sees
> this as an important tool for accountability.)*
>

In the corporate world, it is not uncommon for board committees to retain
separate counsel, so that they receive advice independent of company's
inside and outside counsel.  Our situation is analogous.  While company's
in-house counsel is almost certainly "available" to us, they would not have
the requisite independence, for the reasons Becky has stated above and that
others have stated earlier. Finally, "adequacy" is not the standard to
apply here for several reasons.  First, we need better than adequate work
product; we need first-rate work product (and really, this is not just
about work product -- this is about advice, produced through an iterative
process, where the work product is just the end product of that process).
Second, while ICANN has a first-rate in-house legal team, that does not
mean they are first-rate in dealing with every legal issue regardless of
substance.  I don't think we need  a "demonstration of incompetence" to be
reasonably confident that we will get more skilled and valuable advice on
these issues from a leading outside counsel, who spends their days
wrestling with corporate governance and/or non-profit law issues on a daily
basis for a variety of clients in a variety of contexts.  Third, this is
not merely about being competent -- it is about about getting counsel with
the right approach to these matters, whose goal it is to find solutions to
the issues we raise, who will look for rational interpretations of the
laws, regulations and cases in these areas to achieve our goals -- or to
recommend other ways to achieve them if our initial suggestions are not
viable or preferable.  Keep in mind that there is artistry and advocacy in
legal work, and very little legal advice is "neutral" in the sense that no
particular outcome is more desirable than any other outcome.  Outside of
the obvious, lawyers of similar skill and ability will often come to
different conclusions based on the same sets of law and facts, for many
reasons -- interpretation, risk tolerance, weighting of different
variables, prior experience, client's goals, creativity, etc.  Even if all
we could get is "adequate" legal advice, what we need is OUR adequate legal
advice, and we can only get that from independent counsel.

>
>
> Thank you for your kind note, and on the International Law issue, which to
> me seems excessively speculative, I share your remark.
>
>
>
>
>
>
>  J. Beckwith Burr
>
> *Neustar, Inc. /* Deputy General Counsel and Chief Privacy Officer
>
> 1775 Pennsylvania Avenue NW, Washington, DC 20006
>
> Office: + 1.202.533.2932  Mobile:  +1.202.352.6367  /
> becky.burr at neustar.biz / www.neustar.biz
>
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