[CCWG-ACCT] Legal question

Fri May 1 15:05:19 UTC 2015

How about this for enforceability?

1.       The SO/AC communicates its instructions in written form to the member/UA.

2.       The member/UA acts as the "deliverer" of the SO/AC decision, as instructed in writing.

3.       If the UA/member acts in a manner that appears inconsistent with the SO/AC's written instructions, the issue is referred back to the SO/AC for review.

4.       Institute a confirmation period where every SO/AC reviews and confirms the action of its member/UA before any decision is finalized.

5.       If the UA/member is confirmed to be acting outside written instructions, the UA/member is replaced by the SO/AC and the process repeats.

Keith

From: accountability-cross-community-bounces at icann.org [mailto:accountability-cross-community-bounces at icann.org] On Behalf Of Chris Disspain
Sent: Friday, May 01, 2015 2:00 AM
To: Jordan Carter
Cc: Accountability Cross Community
Subject: Re: [CCWG-ACCT] Legal question

Presumably because they only act on instructions of the SO or AC.

Just as, in the current model, there is no enforceability mechanism for the SOs and ACs to make the Board of ICANN do what the bylaws say they should, how can there be an enforceability mechanism for the SOs and ACs to make the UA do as instructed in the proposed model?

Cheers,

Chris

On 1 May 2015, at 15:41 , Jordan Carter <jordan at internetnz.net.nz<mailto:jordan at internetnz.net.nz>> wrote:

Presumably because they only act on instructions of the SO or AC.

An easy way to imagine it: the ccnso council has a section of its meeting when it is 'acting as the member' and does relevant things.

The ccnso can deal with things being done wrong 'as a member' as it can when they are being done wrong 'as the ccnso'.

Does that help?

Jordan

On Friday, 1 May 2015, Chris Disspain <ceo at auda.org.au<mailto:ceo at auda.org.au>> wrote:
If the UA is only activated when the SO/AC tells its appointed members to act, tight control should not be difficult at all.

How do you ensure the 'appointed members' do as the SO/AC wishes unless the SO/AC can enforce?

Cheers,

Chris

On 1 May 2015, at 15:09 , Greg Shatan <gregshatanipc at gmail.com<javascript:_e(%7B%7D,'cvml','gregshatanipc at gmail.com');>> wrote:

It really goes to how the members of the UA are chosen (a UA needs only two members, so they can be officers of the SO/AC or chosen by some other process) -- it need not be as you describe (though what you describe is a reasonable possibility given the proper circumstances).  If the UA is only activated when the SO/AC tells its appointed members to act, tight control should not be difficult at all.

I may have to take your word on the penguins, as you are far closer to their native habitat than I.  (Though I would note that the Central Park penguins are international movie stars, due to the move "Madagascar" and its offspring.)  However, to be fair, I was actually thinking of a tube television set and not a flat screen TV, so we may have some misunderstanding at work here as well (See, "Penguin on the Telly," Monty Python, 1971, https://youtu.be/pwTqC2T6q4E)  I do think a large console TV would not be salubrious to a penguin beneath it, while it would provide a pleasant perch for the penguin (barring any unfortunate explosions).  With a flat screen TV, the opposite applies.

So, in each case, it's a matter of how the object is designed, not merely a matter of what the object is.

Greg

On Fri, May 1, 2015 at 12:53 AM, Chris Disspain <ceo at auda.org.au<javascript:_e(%7B%7D,'cvml','ceo at auda.org.au');>> wrote:
Leaving aside your penguin analogy (and incidentally you CAN put a television on top of a penguin and it is, in fact, likely to stay there far longer than the penguin will stay on top of the television) I think you may have misunderstood me.

I completely get that the members of the UA control it. The point we are discussing is how members of SO/AC who are NOT members of the UA can ensure that the UA doesn't go rogue or does what the SO/AC wants.

Unless I'm mistaken, to overcome the possibility that an SO or AC won't itself want to become an UA or that to do so will involve a significant decrease in membership, the idea is that a UA is set up and those members of the SO or AC who feel comfortable doing so can become members of the UA (minimum 2) or the SOAC can nominate members. Fine. BUT the SO/AC itself is NOT a member and it is the SO/AC that the UA is representing as a member.

How does the SO/AC ensure the UA does its bidding?

Surely the only folks who can control the UA are its members so how does the SO/AC ensure that those UA members follow the instructions of the SO/AC. Surely this is precisely the same conundrum as the SO/AC ICANN one. For anything to be enforceable the SO/AC would need to be a legal entity or every member of the SO/AC would need to join the UA which amounts to the same thing.

What am I missing here?

Cheers,

Chris

On 1 May 2015, at 14:34 , Greg Shatan <gregshatanipc at gmail.com<javascript:_e(%7B%7D,'cvml','gregshatanipc at gmail.com');>> wrote:

Also, UAs are member associations in their essence, so control of the members gives you control of the UA.  That's very different from a non-profit (non-membership) corporation.  So, it's really diametrically opposite to the relationship between ICANN and the SO/ACs in very fundamental ways.  Saying that "the same would apply" in the ICANN situation is like saying that because you can put a penguin on top of a television, you can put a television on top of a penguin.....

On Fri, May 1, 2015 at 12:30 AM, Greg Shatan <gregshatanipc at gmail.com<javascript:_e(%7B%7D,'cvml','gregshatanipc at gmail.com');>> wrote:
If the SO/ACs created ICANN, it might apply.  Unfortunately, it's the other way around.

On Fri, May 1, 2015 at 12:28 AM, Chris Disspain <ceo at auda.org.au<javascript:_e(%7B%7D,'cvml','ceo at auda.org.au');>> wrote:
Thanks Greg.

I'll consider the points you make on policy and indeed the fundamental underpinnings of the ICANN model and respond in the next day or so.

However, on the legal question:

Finally, I have to say I disagree with your contention that each SO/ACs would need to become an unincorporated association ("UA") rather than merely create one.  Admittedly, the issue of how each SO/AC can control its "alter ego" has not been fully fleshed out.  However, I believe this was discussed at some length on the legal sub team call and it seems that between the bylaws of the UA and the charter of the SO/AC there should be very tight control by the SO/AC over any actions of the UA.

I look forward to hearing how a combination of the bylaws of the UA and the SO/AC charters will work to provide very tight control by the SO/AC. If they do then surely the same would apply to the ICANN bylaws and the SO/AC charters providing a similarly tight control over the actions of ICANN.

Cheers,

Chris

On 1 May 2015, at 13:50, Greg Shatan <gregshatanipc at gmail.com<javascript:_e(%7B%7D,'cvml','gregshatanipc at gmail.com');>> wrote:
Chris,

Here are my preliminary thoughts:

First, though you said you don't want to debate the example itself, the example troubles me and I think it goes deeper than the example.   I think that the establishment of a "TMCH for IGOs" would be new gTLD policy, and almost certainly Consensus Policy, and thus should not be adopted as the example states.  Instead, it should be directed down the PDP path to the GNSO.  Indeed, if I am not mistaken, that is what happened and resulted in the IGO/INGO Curative Rights Working Group, which may or may not make policy recommendations consistent with the GAC advice.  So, I think the premise that the example was meant to demonstrate -- that GAC advice is due more deference than any other input to the Board and that only the Board can set a course contrary to GAC advice -- seems faulty.

This also highlights that the point is not unique to the GAC; it is equally true of the GNSO (or rather, it is true of Board decisions that emanate from the GNSO's processes).  The Board could adopt policy recommendations from the GNSO that are reflected in the budget, only to have a supermajority of the Membership send the budget back.

Fundamentally, whether there is a Board action that results from GAC Advice or from a GNSO Recommendation (or from the ccNSO or from the Staff or elsewhere), it is a Board action.  And a fundamental premise of the CCWG's work is that certain Board decisions will now be subject to certain specified constraints being placed in the hands of the Membership.

To answer your direct question -- this is not a fundamental shift in the standing of GAC advice and thus a fundamental change in the GAC's interface with the rest of ICANN; it's something more wide-ranging than that.  It is a fundamental shift in the standing of certain Board decisions (whatever their provenance) and thus a fundamental change in the Board's interface with the community.

Frankly, if we were to propose that a multilateral organization gets the last word over the global multistakeholder community (as represented by the proposed Membership), we would have failed by most yardsticks -- not least the yardstick set forth by the NTIA for the IANA stewardship transition.

Finally, I have to say I disagree with your contention that each SO/ACs would need to become an unincorporated association ("UA") rather than merely create one.  Admittedly, the issue of how each SO/AC can control its "alter ego" has not been fully fleshed out.  However, I believe this was discussed at some length on the legal sub team call and it seems that between the bylaws of the UA and the charter of the SO/AC there should be very tight control by the SO/AC over any actions of the UA.

Greg

On Thu, Apr 30, 2015 at 10:11 PM, Chris Disspain <ceo at auda.org.au<javascript:_e(%7B%7D,'cvml','ceo at auda.org.au');>> wrote:
Jordan, Greg,

I would like to focus upon two of Jordan's responses in his note of 22 April. Greg you asked me a similar question re the GAC point -

GAC:

CD: 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?

JC: I don't understand this. I have not seen any hint of anyone suggesting that a power that Members should have includes overriding decisions on matters of public policy, which is the advice that the GAC gives the Board and which the bylaws would continue to require it to give due deference to (perhaps with an adjustment about when that reconciliation process has to happen, should GAC change its operating principles).

If GAC advice on public policy matters led to changes in the bylaws, or the inclusion by the Board of business or strategic plans or budgets, then the new powers might have an impact. But all that would require the Board and the GAC to do is to persuade the broader ICANN system, or at least some of it, that their ideas are ones that should be pursued.

Does that feel like a fundamental issue to you? It doesn't to me.

I'm saying is that it might well be a fundamental issue for GAC members. Using an example is the best way to illustrate my point, though I don't want to get into a debate on the likelihood or otherwise of the example itself. The ICANN Board receives (and will continue to receive) advice from the GAC that potentially affects the ICANN Budget.

Consider a situation where the GAC advises that ICANN should create a repository, much like the TMCH, for the acronyms of IGOs. The repository would be used to advise the relevant IGO that their acronym has been registered in a given gTLD and also to advise the registrant that their registration matches a name in the repository.

Assuming that the Board accepts this advice, it would then be required to make a budgetary allocation for establishment of the repository and an annual operating budget.

In the scenario we are discussing regarding members' powers, it would be possible for the community to veto the Budget on this point. This then creates a conflict between the public policy advice from the GAC and the powers of members. Should such a situation occur, how would you see it being resolved? Is this not a fundamental shift in the standing of GAC advice and thus a fundamental change in the GAC's interface with the rest of ICANN?

SOs/ACs generally:

CD: 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).

JC: They won't have to, to do what they do in ICANN today.

The suggestion is they might have to if they want to take part in exercising the accountability powers set out in our report that's going for public comment.

That said, there's a bit of an objective legal question here - which is whether the decisions of these uninc associations can be forced to take account of the views expressed in the ICANN bodies they shadow in making their decisions. If they can (which I would analogise to the ccNSO taking on board the views of non-member ccTLDs - and so I assume it is possible), much of this debate becomes moot.

You make a good point about the legal question. It is one I have yet to see an answer to.

This relates to the comment I made yesterday.

The only way I can see to ensure that the views of ICANN bodies are taken into account is if those SO/ACs become the unincorporated associations themselves. Creating shadow organisations gives rise to the question you raise and significant concerns regarding the accountability of these "alter egos". To me, this seems like an attempted solution that simply adds another layer of complexity. But maybe counsel's response to the question I raised yesterday will answer the point.

Cheers,

Chris

On 30 Apr 2015, at 09:38 , Chris Disspain <ceo at auda.org.au<javascript:_e(%7B%7D,'cvml','ceo at auda.org.au');>> wrote:

Thanks Greg. Clear and understood.

What will the control mechanisms be between the ccNSO and its alter ego and how will they be enforced?

Cheers,

Chris

On 30 Apr 2015, at 09:28 , Greg Shatan <gregshatanipc at gmail.com<javascript:_e(%7B%7D,'cvml','gregshatanipc at gmail.com');>> wrote:

Chris,

Please let me try to clarify my understanding of what is currently being proposed (in draft).  The SO/ACs will not be "converted" into legal entities.  Rather, a "mirror" or "alter ego" entity will be set up for each SO/AC, likely as a unincorporated association (which is a recognized legal entity under California law).  Each SO/AC will control its alter ego. This is quite similar to the relationship between the ASO and the NRO.  The SO/ACs will continue to exist and will perform and operate as they currently do.  The legal entities will be the members (or designators, should that route be chosen) of ICANN, with the specific rights and powers ascribed to them in that capacity by statute and bylaw.

Technically, the unincorporated associations only need a minimum of two members, so any "members" of a SO/AC who don't wish to be members of the alter ego won't need to be.  The control arrangements between the SO/AC and the alter ego will ensure that all "members" of the SO/AC (and even non-members, such as non-ccNSO ccTLDs, if desired) get the appropriate "say" in any decisions that are to be carried out by the alter ego.

Best regards,

Greg

On Wed, Apr 29, 2015 at 6:40 PM, Chris Disspain <ceo at auda.org.au<javascript:_e(%7B%7D,'cvml','ceo at auda.org.au');>> wrote:
Jordan,

Apologies for taking so long to respond!

Nobody is proposing converting the SOs and ACs to anything - at all - anywhere.

I'm confused. Greg seems o think that's exactly what was being proposed. Do we have clarity on this yet?

I'll respond to the balance of your points later today.

Cheers,

Chris

On 22 Apr 2015, at 16:02 , Jordan Carter <jordan at internetnz.net.nz<javascript:_e(%7B%7D,'cvml','jordan at internetnz.net.nz');>> wrote:

Hi all, hi Chris:

On 22 April 2015 at 11:07, Chris Disspain <ceo at auda.org.au<javascript:_e(%7B%7D,'cvml','ceo at auda.org.au');>> wrote:
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.

Nobody is proposing converting the SOs and ACs to anything - at all - anywhere.

The only proposal that I've seen from the lawyers is that if membership was the model chosen, legal personality would need to be created. The actors in the various SOs and ACs would, in exercising membership prerogatives, act through the unincorporated associations.

The lawyers have also been clear that even in a designator model, it's preferable to create legal personality along those lines.

I think it is really really really important for everyone involved in this effort to be very precise and clear about what we are discussing and what we aren't. So I am writing this so directly in order that if my understanding is wrong, it gets picked up pronto! :-)

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.

Indeed it may not. Being able to offer advice on public policy issues to the ICANN Board and to appoint a non-voting liaison member to the Board. I am looking forward to hearing their views on this (and many other questions).

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?

I don't understand this. I have not seen any hint of anyone suggesting that a power that Members should have includes overriding decisions on matters of public policy, which is the advice that the GAC gives the Board and which the bylaws would continue to require it to give due deference to (perhaps with an adjustment about when that reconciliation process has to happen, should GAC change its operating principles).

If GAC advice on public policy matters led to changes in the bylaws, or the inclusion by the Board of business or strategic plans or budgets, then the new powers might have an impact. But all that would require the Board and the GAC to do is to persuade the broader ICANN system, or at least some of it, that their ideas are ones that should be pursued.

Does that feel like a fundamental issue to you? It doesn't to me.

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.

They may or may not. But in that fifteen-years-ago debate, were there any facts on the table about those questions? Or was it all a bit of a mess on many fronts? Because ICANN in 2015 is, better or worse, a very different beast to ICANN in ~ 2000.

Perhaps more importantly, exercising some rights through an unincorporated association would remain a choice for every ICANN participant. Nobody would be forced to be involved. It isn't like a "Join ICANN and have no say" - all the current structures for the "business of the business" would remain in place.

>From the legends I have heard about this early phase in ICANN's history, the fundamental concern was of a power-grab on the corporation's part. Since these reforms make such a power-grab harder (and let's remember that the end of the NTIA contract makes it easier...), I'd expect ccTLDs and others to look at them with quite some interest.

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).

They won't have to, to do what they do in ICANN today.

The suggestion is they might have to if they want to take part in exercising the accountability powers set out in our report that's going for public comment.

That said, there's a bit of an objective legal question here - which is whether the decisions of these uninc associations can be forced to take account of the views expressed in the ICANN bodies they shadow in making their decisions. If they can (which I would analogise to the ccNSO taking on board the views of non-member ccTLDs - and so I assume it is possible), much of this debate becomes moot.

Finally -- I do think this is a really useful and constructive discussion. As someone who is warm to the member approach, but who sees huge benefits if we can manage a "no structural change" outcome, this is just the convo we need to have.

cheers,
Jordan

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
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