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

Tue Sep 20 00:02:33 UTC 2016

Thanks Greg.  I agree with your well-stated thoughts and analysis on this,
and support the questions to CCWG as you have phrased them.

Best,
Mike

Mike Rodenbaugh
RODENBAUGH LAW
tel/fax:  +1.415.738.8087
http://rodenbaugh.com

On Mon, Sep 19, 2016 at 12:59 PM, Greg Shatan <gregshatanipc at gmail.com>
wrote:

> 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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