[CCWG-ACCT] Weinstein v. Iran

[David Post]

At 05:32 PM 8/4/2016, Mueller, Milton L wrote:

>Steve Crocker:  Further, the idea that a 
>court-ordered transfer of control could be 
>carried out in a way that leaves the registrants 
>unharmed sounds nice but I don’t know how to 
>implement it.  It seems to me to be wishful 
>thinking, tied to a theoretical construct but unrelated to reality.
>
>MM:  Let me acquaint you with some business and 
>legal reality then. Why are the plaintiffs 
>attempting to seize the domain? Because they are 
>owed $300 million + in damages. How do they 
>propose to recover those damages? By garnishing 
>an asset which has economic value. Why is the 
>.IR domain valuable? Because people pay money to 
>rent subdomains under it. What is the best way 
>to benefit from that economic value? Obviously, 
>by retaining all the existing customers and 
>collecting their payments as before, and by 
>growing the number of renters. So the winner of 
>such a case has every incentive to avoid harming 
>registrants. And a court could extract 
>commitments to do that from the winner of such a case.
>

I'm not sure I agree with you on this.  The 
question of incentives is likely to be much more 
complicated than this; I am not at all sure that 
the plaintiffs in this case, or in some future 
case, necessarily are seeking to seize the domain 
purely for economic gain; they may be seeking to 
wrest control from the current operator for any number of other reasons.

And it's not at all clear that "a court could 
extract commitments" from the new owner not to 
harm existing registrants. When transferring 
ownership of some asset from X to Y, courts very 
rarely will impose post-transfer conditions on 
the new owner, for very good reasons: they don't 
want to have to define exactly what it means to 
"avoid harming current registrants," and they do 
not want to get involved in an ongoing series of 
disputes about whether the new owner is or is not doing that.

David


>Now, I agree with you that that sequence of 
>events is highly unlikely _in this case_ for a 
>variety of reasons – the fact that Iran is 
>unlikely to cooperate with Israeli-American 
>terrorism victims, or with ICANN; the fact that 
>ICANN or any other cooperative third party does 
>not possess the data required to maintain the lower-level zones, etc.
>
>But there might be another way. The value might 
>also be captured not by the new owners running 
>the domain, but by inducing Iran’s government 
>to pay the terrorism victims a certain amount in 
>order for the plaintiffs to relinquish their 
>court-ordered right to the domain. All fine and 
>good if Iran agrees to the bargain, but if it 
>does not the decision could indeed be holding 
>the local registrants hostage to a blackout of 
>their internet access. I guess one’s 
>evaluation of this depends on one’s assessment 
>of the equities of paying penalties for 
>state-sponsored terrorism vs. that of the 
>internet identities of many innocent Iranian 
>internet users. In this respect I think the court made the right decision.
>
>The .IR case is more fraught than most because 
>of the international politics involved. If one 
>thinks of more normal cases – say the delegee of 
>.uk prooves to be a criminal enterprise and the 
>court (under UK law) orders a redelegation under 
>controlled circumstances, it seems perfectly 
>feasible for a court-ordered property transfer 
>to take place without harming the registrants. 
>In fact, I am sure that court-ordered property 
>transfers of real estate or other enterprises 
>where customers are involved take place all the time.
>
>NB: I am not arguing for the plaintiffs in this 
>case, I am merely pointing out that your idea 
>that it is _impossible_ for a court-ordered 
>property transfer to result in anything but harm 
>to the tenants is a somewhat dogmatic claim.
>
>Dr. Milton L. Mueller
>Professor, School of Public Policy
>Georgia Institute of Technology
>
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David G. Post
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