2015-10-13

CCWG-Accountability Attorneys: ICANN Already Uses 'Designator Model'

"At ICANN 53 in Buenos Aires U.S. Commerce Dept. Assistant Secretary Larry Strickling stressed two points. He emphasized that the proposal should add only the minimal amount of extra structure and not introduce undetermined risks."--source: Steve Crocker, 15 Jul 2015, ICANN Board Chairman, in blog post entitled The CCWG: From Buenos Aires to Paris to Dublin
In a bombshell dropped Monday, October 12th, Legal Counsel for the Cross-Community Working Group on Enhancing ICANN Accountability have concluded (contrary to the ICANN Board and its counsel) that ICANN already uses the 'Designator Model' under California law.

No 'new structure' needed, just 'fix' the current model? The little-noticed submittal on the public mail list of the Cross-Community Working Group on Enhancing ICANN Accountability (CCWG), states that ICANN, as presently constituted, already utilizes the "Designator Model" under California law, albeit with "gaps"--
Excerpt from CCWG Legal Counsel Memorandum
Excerpt from CCWG-Accountability Legal Counsel Memorandum (yellow highlights to text added)
The six-page memorundum, posted on the CCWG public mail list Monday, October 12, 2015, may be read in its entirety here (pdf). The memorandum concludes:

"We believe that the best interpretation of the ICANN Bylaws is that ICANN functions under a designator model, for which the Code prescribes certain statutory rights and powers to designators that cannot be taken away as long as the ICANN Bylaws give director selection powers to identified stakeholder groups, acting separately or collectively. We believe that the designator structure currently set forth in the ICANN Bylaws has several serious gaps that expose ICANN to potential legal challenge and associated instability. These arise because although the Bylaws provide designator rights, the Bylaws do not specifically expressly acknowledge the legal position of the SOs, ALAC, and the NomCom as designators under California corporate law. While we believe that is the best interpretation of these Bylaws and the state statutes and the most likely outcome of a court test, a dispute on that issue could be very protracted, taking months or years to resolve, including the possibility of trial and appellate proceedings, before a final decision is rendered. Such a suit could arise, for example, if the Board tried to remove a director selected by an SO or ALAC as the Bylaws contemplate but without that appointing body’s consent as required by statute, or if an SO or ALAC tried to remove a director it appointed as the statute contemplates even though that right is not mentioned in the Bylaws. Whether ICANN moves to a member model or keeps and improves its designator model, these gaps should be addressed. For the benefit of both ICANN and the multi-stakeholder community, the Bylaws should be clear on how the separate and collective rights and powers related to selection, removal, and replacement of directors given to the ten groups are to be exercised and protected, consistent with California corporate law. ICANN may have a corporate structure that is innovative, expansive, and adaptive, but the Bylaws must be firmly grounded in the existing California nonprofit statutory framework to minimize the disruptive effect of conflicting interpretations." (emphasis added) 

All of this may come as "news" to the ICANN Board of Directors (and its legal counsel Jones Day) which has gone "on record" as neither supporting the "Single or Sole Member Model" (SMM/ CMSM) nor the "Designator model"--

Message from ICANN Board re Designator Model October 6, 2015:

CCWG,

We appreciate the continued work that the CCWG is doing to consider the public comments received on its second draft report.  Following the Los Angeles F2F we have heard suggestions that a Designator model relying on California statutes may be a replacement for the Sole Member model that was in the second draft report.

To be clear, the concerns that the Board raised on the Sole Member model still apply to a Designator model.  The Designator model still introduces a new legal structure with powers that are intrinsically beyond the structure we have been using.  We understand that many believe it is possible to constrain these powers in order to provide established protections, accountability and thresholds: This is unproven territory and will require more detail and time to understand and test the impact on our bedrock multistakeholder balance. 

Further, it is unclear that this would represent the full multistakeholder community because we do not know yet which SO/ACs will join now or later.  Moreover, the same community accountability issues present in the Sole Member are present in the Designator model.

Steve del Bianco’s constructive suggestion over the weekend that the Board could commit to a future governance structure review triggered by key factors seems like a good path forward.  This can be enshrined in a new fundamental bylaw that would require the holding of a future governance structure review if SOs and ACs agree to kick off that review.

We are all in complete agreement on the objective of enforcement of the five community powers, with new/stronger mechanisms for board removal if/when necessary.  Let’s focus on finalizing the details on these consensus elements to enable implementation and a successful transition. 

--Steve Crocker for the ICANN Board of Directors

The CCWG has its final meeting prior to ICANN 54 in Dublin, on Tuesday--CCWG ACCT Meeting #59--Tuesday, 13 October 12:00 - 14:00 UTC time converter which is 8-10am ET (US). Online access is available via the Adobe Connect Room to any and all "silent observers": https://icann.adobeconnect.com/accountability/

Agenda:
1. Welcome, roll-call, SoI
2. WP status updates
  • WP1
  • WP2
  • WP3
  • WP4
  • ST-WP
3. Update on legal requests
4. Update on plan B discussions
5. Timelines
6. Update on community leaders call
7. A.O.B

Note: recent Domain Mondo posts related to the Cross-Community Working Group on Enhancing ICANN Accountability may be found here.




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