The ALAC has been raising this issue multiple times with no answers. Another related question is whether we can require a binding pre-seating letter saying that the director waives all rights to sue for defamations (or whatever) related to the removal process. Alan At 14/12/2015 03:29 PM, Aikman-Scalese, Anne wrote:

If the Chairs want to certify the legal questions, I think these would be:

1. Is it possible for a Director to bring suit for libel, slander, or other causes of action during the community enforcement removal process or thereafter based on the “written justification” laid out by the SO/AC and/or oral statements made during the required conference calls in the Community enforcement process?

2. Could a Director seek injunctive and/or declaratory relief to interrupt the community enforcement process toward removal? If so, would SOs/ACs and officers who are sued be required to mount their own defense? How expensive would this be?

3. Is there insurance coverage available for SOs/ACs and their officers in relation to possible suit by a director in jeopardy of being removed or who has been removed from the Board? If so, how expensive is it?

These are not questions about how likely the action is to occur. That does not really figure into the “chilling effect” that is of concern when the officer of an SO or AC is drafting the “written justification” and/or encouraging open discussion in the required (and recorded for posterity) conference call. Anne

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Anne E. Aikman-Scalese, Of Counsel Lewis Roca Rothgerber LLP One South Church Avenue Suite 700 | Tucson, Arizona 85701-1611 (T) 520.629.4428 | (F) 520.879.4725 <mailto:AAikman@lrrlaw.com>AAikman@lrrlaw.com | www.LRRLaw.com

From: Gregory, Holly [mailto:holly.gregory@sidley.com] Sent: Monday, December 14, 2015 1:14 PM To: Aikman-Scalese, Anne; 'Steve DelBianco' Cc: gregshatanipc@gmail.com; 'Phil Corwin'; cwilson@21cf.com; Rosemary Fei (rfei@adlercolvin.com); Thomas Rickert; ipc_accountabilityct@icann.org; 'Gomes, Chuck' (cgomes@verisign.com); Rosemary Fei (rfei@adlercolvin.com); Sidley ICANN CCWG; ICANN@adlercolvin.com Subject: RE: CCWG - ACCT - Recommendation 4 - Community Powers

We must await further direction from the co-chairs whether this is something that they would like research on under California law

HOLLY GREGORY Partner

Sidley Austin LLP +1 212 839 5853 <mailto:holly.gregory@sidley.com>holly.gregory@sidley.com

From: Aikman-Scalese, Anne [<mailto:AAikman@lrrlaw.com>mailto:AAikman@lrrlaw.com] Sent: Monday, December 14, 2015 3:03 PM To: Gregory, Holly; 'Steve DelBianco' Cc: <mailto:gregshatanipc@gmail.com>gregshatanipc@gmail.com; 'Phil Corwin'; <mailto:cwilson@21cf.com>cwilson@21cf.com; Rosemary Fei (<mailto:rfei@adlercolvin.com>rfei@adlercolvin.com); Thomas Rickert; <mailto:ipc_accountabilityct@icann.org>ipc_accountabilityct@icann.org; 'Gomes, Chuck' (<mailto:cgomes@verisign.com>cgomes@verisign.com) Subject: RE: CCWG - ACCT - Recommendation 4 - Community Powers

Holly – I would tend to agree if in fact the SO or AC ccould remove a director without cause and did not have to state its reasons, but the community process requires this and it is discussed fully throughout four steps of the Community process to director removal. The SO or AC must state “written justification”, to which the Board has now added its “Clear Rationale” comment.

One need only look at the differences of opinion that arose with respect to .africa to understand that a stated reason for removal which has a “written justification” or Clear Rationale from the SO/AC standpoint could easily form the basis of a suit by a director. It does not require much by way of theory for a plaintiff’s lawyer to allege claims of libel and even irreparable harm. The SO/AC would likely need legal advice just to draft the “written justification.”

Again, I do not think indemnification represents a reasonable risk to ICANN as a corporation. The risk should be limited by contract when directors take office. Directors should not be suing the SO/AC and/or its officers for removal. Otherwise, the ultimate enforcement mechanism in the Sole Designator Model is not effective.

You may not have seen this fact situation occur. That does not mean it would not occur at ICANN. We have some fairly feisty folks in our midst. The risk of suit is of course much higher than the risk of success on the merits. I would say it is hard to measure in dollars the potential damage to an individual associated with being removed from the ICANN Board with “written justification”. It could be a pretty good strategy for a director who wants to interrupt the Community Enforcement process. He or she may also have the full support of other Directors willing to testify. Anne

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Anne E. Aikman-Scalese, Of Counsel Lewis Roca Rothgerber LLP One South Church Avenue Suite 700 | Tucson, Arizona 85701-1611 (T) 520.629.4428 | (F) 520.879.4725 <mailto:AAikman@lrrlaw.com>AAikman@lrrlaw.com | www.LRRLaw.com

From: Gregory, Holly [<mailto:holly.gregory@sidley.com>mailto:holly.gregory@sidley.com] Sent: Monday, December 14, 2015 12:43 PM To: Aikman-Scalese, Anne; 'Steve DelBianco' Cc: <mailto:gregshatanipc@gmail.com>gregshatanipc@gmail.com; 'Phil Corwin'; <mailto:cwilson@21cf.com>cwilson@21cf.com; Rosemary Fei (<mailto:rfei@adlercolvin.com>rfei@adlercolvin.com); Thomas Rickert Subject: RE: CCWG - ACCT - Recommendation 4 - Community Powers

Anne, My sense is that the concerns you raise present an extremely low risk of suit – and hence low risk of indemnificcation and cost of indemnification. In my many years of corporate governance practice I cannot recall a lawsuit for libel or defamation by a director in an instance of removal. But we can research under California law if the co-chairs certify. Also, I am not aware of any theory of libel or defamation that would give rise to injunctive relief delaying such removal where the designator has the right to remove with or without cause as here. Again, we have not researched this specific point under California law but will do so if certified. Holly

HOLLY GREGORY Partner

Sidley Austin LLP +1 212 839 5853 <mailto:holly.gregory@sidley.com>holly.gregory@sidley.com

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