Dear CCWG: We responded to the question in red in the email below, which someone also asked in the August 25 webinar. We added the response when we were asked to review and edit the webinar Q&A. I'm not sure when this got posted, but I think it was on the "last modified" date of September 21. https://community.icann.org/pages/viewpage.action?pageId=54695403 See the CCWG Legal Counsel's Response to Question 48, reproduced here: CCWG Legal Counsel's Response: If the sole member is formed as a California unincorporated association (since it would need to be a legal person in order to be a statutory member of ICANN), participants in the Sole Member unincorporated association would not liable for the debts, obligations, or liabilities of the association solely by reason of being participants, as stated in California Corporations Code Section 18605. Corporations Code Section 18630 simply points out the legal principle of common-law alter-ego liability, applicable not only to unincorporated associations but also to corporations and other limited-liability entities such as limited liability companies. For example, under this principle a corporate shareholder could be held liable for the debts of a corporation that is operated so closely by or in connection with the shareholder that it has ceased to have a separate existence for practical purposes (i.e., the corporation has been operated as the shareholder's mere "alter ego"). Typically, however, a finding of alter-ego liability requires a number of egregious facts, including a commingling of funds between the shareholder and the corporation and a failure to observe corporate formalities. Courts may also require a demonstration of outright fraud. If the CMSM is administered according to the governance provisions to be included in the ICANN Bylaws, we do not believe there would be a basis for a court to assert alter-ego liability against its participants. While this does not respond to all of the questions posed in the email below, I hope that at least this one answer is helpful. Rosemary Rosemary E. Fei Adler & Colvin 235 Montgomery Street, Suite 1220 San Francisco, CA 94104 415/421-7555 (phone) 415/421-0712 (fax) rfei@adlercolvin.com www.adlercolvin.com _____________________________ Adler & Colvin is a San Francisco Green Business certified by the City and County of San Francisco. Please consider the environment before you print this email. From: accountability-cross-community-bounces@icann.org<mailto:accountability-cross-community-bounces@icann.org> [mailto:accountability-cross-community-bounces@icann.org] On Behalf Of Perez Galindo, Rafael Sent: Wednesday, September 30, 2015 2:26 AM To: accountability-cross-community@icann.org<mailto:accountability-cross-community@icann.org> Subject: [CCWG-ACCT] Regarding GAC participation Good morning/afternoon/night to All In order to make an informed decision on the role the GAC could take on in the different models under discussion, it is still unclear to me what the legal implications of participation in a voting mechanism are for governments, even more in the absence of a precedent or parallel that we could draw on. Hence, the ability for governments to participate in wider community voting processes under a foreign jurisdiction is a point I would like to raise with the CCWG's legal advisors, along with the issue of governments liability as participants e.g. in the sole member of a non-for-profit corporation (which stems from the fact that governments would be subject to CA jurisdiction). This issue was first raised by Anne Aikman-Scalese (9th september email) and I believe no answer has been provided to date: "[...] I still did not receive an answer with respect to my question regarding the applicability of CA Corporations Code Section 18630 which provides as follows: "Notwithstanding any other provision of this chapter, a member or person in control of a nonprofit association may be subject to liability for a debt, obligation, or liability of the association under common law principles governing alter ego liability of shareholders of a corporation, taking into account the differences between a nonprofit association and a corporation.". In conclusion, I kindly ask the Co-Chairs to forward these questions to the CCWG legal advisors about (1) ability, (2) legal implications and (3) liabilities of governments if they took part as voting members in the community mechanism to be deployed under CA jurisdiction. An answer should be provided for the three models under discussion (SMM, Single designator and MEM). Looking forward to receiving the legal advice, thank you and best regards Rafael GAC_SPAIN