[Ws2-jurisdiction] Items for CCWG-Plenary: (1) Place of Incorporation

[Greg Shatan]

All,

Based on our discussions, there were two topics identified as ones to be
brought back to the CCWG Plenary, which is meeting tomorrow.

These topics relate (i) examining ICANN's place of incorporation and (ii)
the Gap Analysis that we have been tasked to "confirm and assess."  I'll
deal with the gap analysis issue in a separate email.

This email deals with how (and whether) to approach the effects of ICANN's
place of incorporation.

Both in this group and in the CCWG generally, we have heard a range of
views on how (and whether) to examine the effects of ICANN's place of
incorporation (and perhaps, by extension, the location of ICANN's
headquarters).

On the one hand, there have been calls for a declaration that ICANN will
forever be incorporated and located in California, putting issues relating
to ICANN's place of incorporation/location out of scope.

On the other hand, there have been calls to have any effects arising from
ICANN's place of incorporation/location and all outcomes/recommendations
relating to those effects be open to this group.

I don't see sufficient support for either of these positions in the
subgroup in their current form, so we need a way forward capable of broad
support in this subgroup and the CCWG.  Since we have not been able to
resolve this matter in our group, this seems like an appropriate topic to
bring back to the CCWG Plenary for clarification and guidance.

*In looking for a way forward, I suggest we seek answers to two questions,
based on the two positions above:*

*(a) Should the subgroup (and thus the CCWG) be free to examine the effects
of all "layers" of ICANN "jurisdiction," including ICANN's place of
incorporation and location?* (Based on other aspects of Annex 12, this
probably should focus in particular on the effect on "actual operation of
policies and accountability mechanisms" and on settlement of disputes, but
we don't need to make that scope decision quite yet.)

*(b) Should the subgroup (and thus the CCWG) keep open all options for
 outcomes/recommendations arising from this examination (including changing
ICANN's place of incorporation and/or location)?*

We need an outcome that is likely to get broad support in the subgroup and
the CCWG and allow us to move forward with our work.  At the same time, we
need to recognize that not everyone will be pleased, but pleasing everyone
is impossible.

After reviewing the various points and positions raised in the subgroup and
CCWG, I would like to put forward the following answers as a "strawman":


*(a) The subgroup should be free to examine the effects of ICANN's current
place of incorporation/location.*
*(b) The subgroup should eliminate the possibility that we will recommend
to CCWG that ICANN be moved from California, either as a place of
incorporation or as a physical location.*

I've based this suggestion on an examination of issues raised by various
participants during our work, listed below.  You should all respond with
your thoughts on the appropriate response to these questions, and feel free
to provide any additional inputs for consideration.

   1. Our remit is to look at all the "multi-layers" of jurisdiction, not
   only at selected layers.  All jurisdictional issues relate back to rules of
   law and choices of law, and the influence of California law and location is
   relevant to all of those discussions.  As a result, failure to even look at
   any aspect of the effects (positive or negative) of ICANN's place of
   incorporation and location would be seen an incomplete exercise of the
   remit of this group.
   2. A declaration in perpetuity is inappropriate. ICANN, as a private
   corporation, should be free to consider changes to any aspect of its Bylaws
   and Articles, according to the methods chosen for its governance.  We have
   revised and reformed these methods, and we should be able to use them in
   the future for all topics, even this one.
   3. The CWG-Stewardship and CCWG-Accountability proposals (and their
   implementation) depend on California as the place of incorporation. For
   example, ICANN's Bylaws are based in California law and the Bylaw revisions
   (now accepted by ICANN but waiting to be made effective) are similarly
   based on California law.
   4. More particularly, the Empowered Community is based on the
   "designator" concept in California non-profit law and on the treatment of
   "unincorporated associations" (particularly, the personhood of
   unincorporated associations) as set forth in California law.
   5. It has been suggested that changing ICANN's place of incorporation
   would disrupt the proposed changes just as they are  being put in place and
   essentially "re-open" Work Stream 1.  This would undo a great deal of work,
   throw the Accountability mechanisms and other changes into uncertainty, and
   open the door to massive attempts at "re-trading".
   6. We should allow the new accountability mechanisms an appropriate
   amount of time to function "as is" before even considering a jurisdictional
   change that would have across-the-board effects on these mechanisms and
   other recommended reforms (and require another CCWG, or at least WS3).
   7. The revised (and current) Articles of Incorporation state that ICANN
   "is organized [i.e., incorporated] under the California Nonprofit Public
   Benefit Corporation Law for charitable and public purposes."  Changes to
   the Articles should be approached with the same level of gravity as changes
   to the Fundamental Bylaws, which are not to be taken lightly.  Any change
   will require the same process as changes to the fundamental Bylaws (i.e.,
   75% vote of Board and convening Empowered Community and getting EC
   approval).
   8. Arriving at a choice of another jurisdiction for these purposes would
   likely require a multi-year effort to accomplish, which by itself is
   outside the scope of Work Stream 2, which essentially has a one-year
   lifespan.  We need to consider whether this is a practical outcome.
   9. Even if we find negative effects from ICANN's California
   incorporation or location, we should start with less disruptive and more
   contained remedial measures.  It would be premature to move past more
   straightforward options and recommend the drastic outcome of moving ICANN.
   If more modest options are tried and they fail to resolve a fundamental
   problem, then it would be appropriate for some future WG (or the EC) to
   suggest bigger changes.
   10. Aside from the governance issues, moving ICANN completely out of
   California (and possibly the US) would require an immense amount of work
   for the corporation, staffing problems, etc.
   11. Examining and resolving issues such as venue and providers of
   dispute resolution mechanisms, language of proceedings, applicable
   law(s) for disputes: addressing the laws of jurisdiction where contracting
   parties are established (including potential conflicts between commitments
   derived from ICANN policies and such national legal frameworks), and
   internal redress mechanisms does not require the ability to change ICANN's
   place of incorporation or location.


I look forward to all your thoughts.

Greg
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