Re: [CCWG-ACCT] CCWG - ACCT - Recommendation 4 - Community Powers
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 [cid:image001.gif@01D13672.C22150F0] 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 AAikman@lrrlaw.com<mailto:AAikman@lrrlaw.com> | www.LRRLaw.com<http://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 holly.gregory@sidley.com<mailto:holly.gregory@sidley.com> From: Aikman-Scalese, Anne [mailto:AAikman@lrrlaw.com] Sent: Monday, December 14, 2015 3:03 PM To: Gregory, Holly; 'Steve DelBianco' Cc: gregshatanipc@gmail.com<mailto:gregshatanipc@gmail.com>; 'Phil Corwin'; cwilson@21cf.com<mailto:cwilson@21cf.com>; Rosemary Fei (rfei@adlercolvin.com<mailto:rfei@adlercolvin.com>); Thomas Rickert; ipc_accountabilityct@icann.org<mailto:ipc_accountabilityct@icann.org>; 'Gomes, Chuck' (cgomes@verisign.com<mailto:cgomes@verisign.com>) Subject: RE: CCWG - ACCT - Recommendation 4 - Community Powers Holly – I would tend to agree if in fact the SO or AC could 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 [cid:image001.gif@01D13672.C22150F0] 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 AAikman@lrrlaw.com<mailto:AAikman@lrrlaw.com> | www.LRRLaw.com<https://urldefense.proofpoint.com/v2/url?u=http-3A__www.lrrlaw.com_&d=CwMGaQ...> From: Gregory, Holly [mailto:holly.gregory@sidley.com] Sent: Monday, December 14, 2015 12:43 PM To: Aikman-Scalese, Anne; 'Steve DelBianco' Cc: gregshatanipc@gmail.com<mailto:gregshatanipc@gmail.com>; 'Phil Corwin'; cwilson@21cf.com<mailto:cwilson@21cf.com>; Rosemary Fei (rfei@adlercolvin.com<mailto: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 indemnification 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 holly.gregory@sidley.com<mailto:holly.gregory@sidley.com> f the intended recipients, and is covered by the Electronic Communications Privacy Act, 18 U.S.C. §2510-2521. ________________________________ This message and any attachments are intended only for the use of the individual or entity to which they are addressed. 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Anne, the difficulty I have with your formulation of the first question is that it is “possible” for many invalid claims to be stated in a legal complaint but the key assessment is whether there is any legal risk attached to a claim. No need to research whether it is “possible.” HOLLY GREGORY Partner Sidley Austin LLP +1 212 839 5853 holly.gregory@sidley.com<mailto:holly.gregory@sidley.com> From: Aikman-Scalese, Anne [mailto:AAikman@lrrlaw.com] Sent: Monday, December 14, 2015 3:29 PM To: Gregory, Holly; '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; accountability-cross-community@icann.org Subject: RE: CCWG - ACCT - Recommendation 4 - Community Powers 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 [cid:image001.gif@01D13686.B1E88BE0] 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 AAikman@lrrlaw.com<mailto:AAikman@lrrlaw.com> | www.LRRLaw.com<https://urldefense.proofpoint.com/v2/url?u=http-3A__www.lrrlaw.com_&d=CwMGaQ...> 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<mailto:gregshatanipc@gmail.com>; 'Phil Corwin'; cwilson@21cf.com<mailto:cwilson@21cf.com>; Rosemary Fei (rfei@adlercolvin.com<mailto:rfei@adlercolvin.com>); Thomas Rickert; ipc_accountabilityct@icann.org<mailto:ipc_accountabilityct@icann.org>; 'Gomes, Chuck' (cgomes@verisign.com<mailto:cgomes@verisign.com>); Rosemary Fei (rfei@adlercolvin.com<mailto:rfei@adlercolvin.com>); Sidley ICANN CCWG; ICANN@adlercolvin.com<mailto: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 holly.gregory@sidley.com<mailto:holly.gregory@sidley.com> From: Aikman-Scalese, Anne [mailto:AAikman@lrrlaw.com] Sent: Monday, December 14, 2015 3:03 PM To: Gregory, Holly; 'Steve DelBianco' Cc: gregshatanipc@gmail.com<mailto:gregshatanipc@gmail.com>; 'Phil Corwin'; cwilson@21cf.com<mailto:cwilson@21cf.com>; Rosemary Fei (rfei@adlercolvin.com<mailto:rfei@adlercolvin.com>); Thomas Rickert; ipc_accountabilityct@icann.org<mailto:ipc_accountabilityct@icann.org>; 'Gomes, Chuck' (cgomes@verisign.com<mailto:cgomes@verisign.com>) Subject: RE: CCWG - ACCT - Recommendation 4 - Community Powers Holly – I would tend to agree if in fact the SO or AC could 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 [cid:image001.gif@01D13686.B1E88BE0] 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 AAikman@lrrlaw.com<mailto:AAikman@lrrlaw.com> | www.LRRLaw.com<https://urldefense.proofpoint.com/v2/url?u=http-3A__www.lrrlaw.com_&d=CwMGaQ...> From: Gregory, Holly [mailto:holly.gregory@sidley.com] Sent: Monday, December 14, 2015 12:43 PM To: Aikman-Scalese, Anne; 'Steve DelBianco' Cc: gregshatanipc@gmail.com<mailto:gregshatanipc@gmail.com>; 'Phil Corwin'; cwilson@21cf.com<mailto:cwilson@21cf.com>; Rosemary Fei (rfei@adlercolvin.com<mailto: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 indemnification 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 holly.gregory@sidley.com<mailto:holly.gregory@sidley.com> f the intended recipients, and is covered by the Electronic Communications Privacy Act, 18 U.S.C. §2510-2521. ________________________________ This message and any attachments are intended only for the use of the individual or entity to which they are addressed. 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Holly, I disagree that the key assessment would the merits of any claim as ultimately determined. I believe the risk to the ICANN Community Powers process is the cost of litigation in defending against such a claim (the Big Chill) and the possible interruption to the community enforcement process as outlined via the four steps. If insurance is available to SOs/ACs to guard against that risk, it would be very good to know that. Many spurious and very expensive claims have been directed toward ICANN itself in the past. I don’t see why this is considered so unlikely in relation to the director removal process by SOs and ACs. It may also be that the Board must ultimately take the action to officially remove and so they would also likely be named and could even be enjoined pending a hearing. Anne [cid:image001.gif@01D1367E.0299AD20] 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 AAikman@lrrlaw.com<mailto:AAikman@lrrlaw.com> | www.LRRLaw.com<http://www.lrrlaw.com/> From: Gregory, Holly [mailto:holly.gregory@sidley.com] Sent: Monday, December 14, 2015 1:47 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; accountability-cross-community@icann.org Subject: RE: CCWG - ACCT - Recommendation 4 - Community Powers Anne, the difficulty I have with your formulation of the first question is that it is “possible” for many invalid claims to be stated in a legal complaint but the key assessment is whether there is any legal risk attached to a claim. No need to research whether it is “possible.” HOLLY GREGORY Partner Sidley Austin LLP +1 212 839 5853 holly.gregory@sidley.com<mailto:holly.gregory@sidley.com> From: Aikman-Scalese, Anne [mailto:AAikman@lrrlaw.com] Sent: Monday, December 14, 2015 3:29 PM To: Gregory, Holly; 'Steve DelBianco' Cc: gregshatanipc@gmail.com<mailto:gregshatanipc@gmail.com>; 'Phil Corwin'; cwilson@21cf.com<mailto:cwilson@21cf.com>; Rosemary Fei (rfei@adlercolvin.com<mailto:rfei@adlercolvin.com>); Thomas Rickert; ipc_accountabilityct@icann.org<mailto:ipc_accountabilityct@icann.org>; 'Gomes, Chuck' (cgomes@verisign.com<mailto:cgomes@verisign.com>); Rosemary Fei (rfei@adlercolvin.com<mailto:rfei@adlercolvin.com>); Sidley ICANN CCWG; ICANN@adlercolvin.com<mailto:ICANN@adlercolvin.com>; accountability-cross-community@icann.org<mailto:accountability-cross-community@icann.org> Subject: RE: CCWG - ACCT - Recommendation 4 - Community Powers 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 [cid:image001.gif@01D1367E.0299AD20] 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 AAikman@lrrlaw.com<mailto:AAikman@lrrlaw.com> | www.LRRLaw.com<https://urldefense.proofpoint.com/v2/url?u=http-3A__www.lrrlaw.com_&d=CwMGaQ...> 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<mailto:gregshatanipc@gmail.com>; 'Phil Corwin'; cwilson@21cf.com<mailto:cwilson@21cf.com>; Rosemary Fei (rfei@adlercolvin.com<mailto:rfei@adlercolvin.com>); Thomas Rickert; ipc_accountabilityct@icann.org<mailto:ipc_accountabilityct@icann.org>; 'Gomes, Chuck' (cgomes@verisign.com<mailto:cgomes@verisign.com>); Rosemary Fei (rfei@adlercolvin.com<mailto:rfei@adlercolvin.com>); Sidley ICANN CCWG; ICANN@adlercolvin.com<mailto: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 holly.gregory@sidley.com<mailto:holly.gregory@sidley.com> From: Aikman-Scalese, Anne [mailto:AAikman@lrrlaw.com] Sent: Monday, December 14, 2015 3:03 PM To: Gregory, Holly; 'Steve DelBianco' Cc: gregshatanipc@gmail.com<mailto:gregshatanipc@gmail.com>; 'Phil Corwin'; cwilson@21cf.com<mailto:cwilson@21cf.com>; Rosemary Fei (rfei@adlercolvin.com<mailto:rfei@adlercolvin.com>); Thomas Rickert; ipc_accountabilityct@icann.org<mailto:ipc_accountabilityct@icann.org>; 'Gomes, Chuck' (cgomes@verisign.com<mailto:cgomes@verisign.com>) Subject: RE: CCWG - ACCT - Recommendation 4 - Community Powers Holly – I would tend to agree if in fact the SO or AC could 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 [cid:image001.gif@01D1367E.0299AD20] 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 AAikman@lrrlaw.com<mailto:AAikman@lrrlaw.com> | www.LRRLaw.com<https://urldefense.proofpoint.com/v2/url?u=http-3A__www.lrrlaw.com_&d=CwMGaQ...> From: Gregory, Holly [mailto:holly.gregory@sidley.com] Sent: Monday, December 14, 2015 12:43 PM To: Aikman-Scalese, Anne; 'Steve DelBianco' Cc: gregshatanipc@gmail.com<mailto:gregshatanipc@gmail.com>; 'Phil Corwin'; cwilson@21cf.com<mailto:cwilson@21cf.com>; Rosemary Fei (rfei@adlercolvin.com<mailto: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 indemnification 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 holly.gregory@sidley.com<mailto:holly.gregory@sidley.com> f the intended recipients, and is covered by the Electronic Communications Privacy Act, 18 U.S.C. §2510-2521. ________________________________ This message and any attachments are intended only for the use of the individual or entity to which they are addressed. If the reader of this message or an attachment is not the intended recipient or the employee or agent responsible for delivering the message or attachment to the intended recipient you are hereby notified that any dissemination, distribution or copying of this message or any attachment is strictly prohibited. If you have received this communication in error, please notify us immediately by replying to the sender. The information transmitted in this message and any attachments may be privileged, is intended only for the personal and confidential use of the intended recipients, and is covered by the Electronic Communications Privacy Act, 18 U.S.C. §2510-2521. **************************************************************************************************** This e-mail is sent by a law firm and may contain information that is privileged or confidential. If you are not the intended recipient, please delete the e-mail and any attachments and notify us immediately. **************************************************************************************************** ________________________________ This message and any attachments are intended only for the use of the individual or entity to which they are addressed. If the reader of this message or an attachment is not the intended recipient or the employee or agent responsible for delivering the message or attachment to the intended recipient you are hereby notified that any dissemination, distribution or copying of this message or any attachment is strictly prohibited. If you have received this communication in error, please notify us immediately by replying to the sender. The information transmitted in this message and any attachments may be privileged, is intended only for the personal and confidential use of the intended recipients, and is covered by the Electronic Communications Privacy Act, 18 U.S.C. §2510-2521.
Questions 1 and 2 might be re-directed at whether a director can be enforceably bound to an agreement not to bring such suits or seek such relief, such as in a pre-service letter, rather than (or in addition to) researching whether such suits and relief are possible. To Anne’s point, claims without any legal basis can still be made in court, so perhaps the focus should be on how quickly and easily they will be dismissed. An enforceable agreement would go a long way in that direction, which would be reassuring for SO/AC actors, but also a strong disincentive for directors being removed to bring a claim at all. The last question could be directed to ICANN’s insurance carrier, or other carriers who may offer such coverage, rather than legal counsel. We can do the research if directed, but I don’t think our legal expertise is needed to be able to do that work. 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: Aikman-Scalese, Anne [mailto:AAikman@lrrlaw.com] Sent: Monday, December 14, 2015 12:29 PM To: Holly Gregory; 'Steve DelBianco' Cc: gregshatanipc@gmail.com; 'Phil Corwin'; cwilson@21cf.com; Rosemary E. Fei; Thomas Rickert; ipc_accountabilityct@icann.org; 'Gomes, Chuck' (cgomes@verisign.com); Rosemary E. Fei; Sidley ICANN CCWG; ICANN-Adler; accountability-cross-community@icann.org Subject: RE: CCWG - ACCT - Recommendation 4 - Community Powers 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 [cid:image001.gif@01D1368E.3BC335C0] 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 AAikman@lrrlaw.com<mailto:AAikman@lrrlaw.com> | www.LRRLaw.com<http://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<mailto:gregshatanipc@gmail.com>; 'Phil Corwin'; cwilson@21cf.com<mailto:cwilson@21cf.com>; Rosemary Fei (rfei@adlercolvin.com<mailto:rfei@adlercolvin.com>); Thomas Rickert; ipc_accountabilityct@icann.org<mailto:ipc_accountabilityct@icann.org>; 'Gomes, Chuck' (cgomes@verisign.com<mailto:cgomes@verisign.com>); Rosemary Fei (rfei@adlercolvin.com<mailto:rfei@adlercolvin.com>); Sidley ICANN CCWG; ICANN@adlercolvin.com<mailto: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 holly.gregory@sidley.com<mailto:holly.gregory@sidley.com> From: Aikman-Scalese, Anne [mailto:AAikman@lrrlaw.com] Sent: Monday, December 14, 2015 3:03 PM To: Gregory, Holly; 'Steve DelBianco' Cc: gregshatanipc@gmail.com<mailto:gregshatanipc@gmail.com>; 'Phil Corwin'; cwilson@21cf.com<mailto:cwilson@21cf.com>; Rosemary Fei (rfei@adlercolvin.com<mailto:rfei@adlercolvin.com>); Thomas Rickert; ipc_accountabilityct@icann.org<mailto:ipc_accountabilityct@icann.org>; 'Gomes, Chuck' (cgomes@verisign.com<mailto:cgomes@verisign.com>) Subject: RE: CCWG - ACCT - Recommendation 4 - Community Powers Holly – I would tend to agree if in fact the SO or AC could 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 [cid:image001.gif@01D1368E.3BC335C0] 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 AAikman@lrrlaw.com<mailto:AAikman@lrrlaw.com> | www.LRRLaw.com<https://urldefense.proofpoint.com/v2/url?u=http-3A__www.lrrlaw.com_&d=CwMGaQ...> From: Gregory, Holly [mailto:holly.gregory@sidley.com] Sent: Monday, December 14, 2015 12:43 PM To: Aikman-Scalese, Anne; 'Steve DelBianco' Cc: gregshatanipc@gmail.com<mailto:gregshatanipc@gmail.com>; 'Phil Corwin'; cwilson@21cf.com<mailto:cwilson@21cf.com>; Rosemary Fei (rfei@adlercolvin.com<mailto: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 indemnification 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 holly.gregory@sidley.com<mailto:holly.gregory@sidley.com> f the intended recipients, and is covered by the Electronic Communications Privacy Act, 18 U.S.C. §2510-2521. ________________________________ This message and any attachments are intended only for the use of the individual or entity to which they are addressed. If the reader of this message or an attachment is not the intended recipient or the employee or agent responsible for delivering the message or attachment to the intended recipient you are hereby notified that any dissemination, distribution or copying of this message or any attachment is strictly prohibited. If you have received this communication in error, please notify us immediately by replying to the sender. The information transmitted in this message and any attachments may be privileged, is intended only for the personal and confidential use of the intended recipients, and is covered by the Electronic Communications Privacy Act, 18 U.S.C. §2510-2521.
Agreed Sent with Good (www.good.com) ________________________________ From: Rosemary E. Fei Sent: Monday, December 14, 2015 06:41:09 PM To: Aikman-Scalese, Anne; Gregory, Holly; 'Steve DelBianco' Cc: gregshatanipc@gmail.com; 'Phil Corwin'; cwilson@21cf.com; Thomas Rickert; ipc_accountabilityct@icann.org; 'Gomes, Chuck' (cgomes@verisign.com); Sidley ICANN CCWG; ICANN-Adler; accountability-cross-community@icann.org Subject: RE: CCWG - ACCT - Recommendation 4 - Community Powers Questions 1 and 2 might be re-directed at whether a director can be enforceably bound to an agreement not to bring such suits or seek such relief, such as in a pre-service letter, rather than (or in addition to) researching whether such suits and relief are possible. To Anne’s point, claims without any legal basis can still be made in court, so perhaps the focus should be on how quickly and easily they will be dismissed. An enforceable agreement would go a long way in that direction, which would be reassuring for SO/AC actors, but also a strong disincentive for directors being removed to bring a claim at all. The last question could be directed to ICANN’s insurance carrier, or other carriers who may offer such coverage, rather than legal counsel. We can do the research if directed, but I don’t think our legal expertise is needed to be able to do that work. 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: Aikman-Scalese, Anne [mailto:AAikman@lrrlaw.com] Sent: Monday, December 14, 2015 12:29 PM To: Holly Gregory; 'Steve DelBianco' Cc: gregshatanipc@gmail.com; 'Phil Corwin'; cwilson@21cf.com; Rosemary E. Fei; Thomas Rickert; ipc_accountabilityct@icann.org; 'Gomes, Chuck' (cgomes@verisign.com); Rosemary E. Fei; Sidley ICANN CCWG; ICANN-Adler; accountability-cross-community@icann.org Subject: RE: CCWG - ACCT - Recommendation 4 - Community Powers 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 [cid:image001.gif@01D1368E.3BC335C0] 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 AAikman@lrrlaw.com<mailto:AAikman@lrrlaw.com> | www.LRRLaw.com<https://urldefense.proofpoint.com/v2/url?u=http-3A__www.lrrlaw.com_&d=CwMGaQ...> 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<mailto:gregshatanipc@gmail.com>; 'Phil Corwin'; cwilson@21cf.com<mailto:cwilson@21cf.com>; Rosemary Fei (rfei@adlercolvin.com<mailto:rfei@adlercolvin.com>); Thomas Rickert; ipc_accountabilityct@icann.org<mailto:ipc_accountabilityct@icann.org>; 'Gomes, Chuck' (cgomes@verisign.com<mailto:cgomes@verisign.com>); Rosemary Fei (rfei@adlercolvin.com<mailto:rfei@adlercolvin.com>); Sidley ICANN CCWG; ICANN@adlercolvin.com<mailto: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 holly.gregory@sidley.com<mailto:holly.gregory@sidley.com> From: Aikman-Scalese, Anne [mailto:AAikman@lrrlaw.com] Sent: Monday, December 14, 2015 3:03 PM To: Gregory, Holly; 'Steve DelBianco' Cc: gregshatanipc@gmail.com<mailto:gregshatanipc@gmail.com>; 'Phil Corwin'; cwilson@21cf.com<mailto:cwilson@21cf.com>; Rosemary Fei (rfei@adlercolvin.com<mailto:rfei@adlercolvin.com>); Thomas Rickert; ipc_accountabilityct@icann.org<mailto:ipc_accountabilityct@icann.org>; 'Gomes, Chuck' (cgomes@verisign.com<mailto:cgomes@verisign.com>) Subject: RE: CCWG - ACCT - Recommendation 4 - Community Powers Holly – I would tend to agree if in fact the SO or AC could 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 [cid:image001.gif@01D1368E.3BC335C0] 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 AAikman@lrrlaw.com<mailto:AAikman@lrrlaw.com> | www.LRRLaw.com<https://urldefense.proofpoint.com/v2/url?u=http-3A__www.lrrlaw.com_&d=CwMGaQ...> From: Gregory, Holly [mailto:holly.gregory@sidley.com] Sent: Monday, December 14, 2015 12:43 PM To: Aikman-Scalese, Anne; 'Steve DelBianco' Cc: gregshatanipc@gmail.com<mailto:gregshatanipc@gmail.com>; 'Phil Corwin'; cwilson@21cf.com<mailto:cwilson@21cf.com>; Rosemary Fei (rfei@adlercolvin.com<mailto: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 indemnification 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 holly.gregory@sidley.com<mailto:holly.gregory@sidley.com> f the intended recipients, and is covered by the Electronic Communications Privacy Act, 18 U.S.C. §2510-2521. ________________________________ This message and any attachments are intended only for the use of the individual or entity to which they are addressed. If the reader of this message or an attachment is not the intended recipient or the employee or agent responsible for delivering the message or attachment to the intended recipient you are hereby notified that any dissemination, distribution or copying of this message or any attachment is strictly prohibited. If you have received this communication in error, please notify us immediately by replying to the sender. The information transmitted in this message and any attachments may be privileged, is intended only for the personal and confidential use of the intended recipients, and is covered by the Electronic Communications Privacy Act, 18 U.S.C. §2510-2521. **************************************************************************************************** This e-mail is sent by a law firm and may contain information that is privileged or confidential. If you are not the intended recipient, please delete the e-mail and any attachments and notify us immediately. ****************************************************************************************************
Thanks Holly and Rosemary. We are still trying to locate a Director Service letter – even just to determine whether they ever agree that CA law governs when they sign on. Anne [cid:image001.gif@01D13698.95E5F6A0] 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 AAikman@lrrlaw.com<mailto:AAikman@lrrlaw.com> | www.LRRLaw.com<http://www.lrrlaw.com/> From: Gregory, Holly [mailto:holly.gregory@sidley.com] Sent: Monday, December 14, 2015 5:42 PM To: Rosemary E. Fei; Aikman-Scalese, Anne; 'Steve DelBianco' Cc: gregshatanipc@gmail.com; 'Phil Corwin'; cwilson@21cf.com; Thomas Rickert; ipc_accountabilityct@icann.org; 'Gomes, Chuck' (cgomes@verisign.com); Sidley ICANN CCWG; ICANN-Adler; accountability-cross-community@icann.org Subject: RE: CCWG - ACCT - Recommendation 4 - Community Powers Agreed Sent with Good (www.good.com<http://www.good.com>) ________________________________ From: Rosemary E. Fei Sent: Monday, December 14, 2015 06:41:09 PM To: Aikman-Scalese, Anne; Gregory, Holly; 'Steve DelBianco' Cc: gregshatanipc@gmail.com<mailto:gregshatanipc@gmail.com>; 'Phil Corwin'; cwilson@21cf.com<mailto:cwilson@21cf.com>; Thomas Rickert; ipc_accountabilityct@icann.org<mailto:ipc_accountabilityct@icann.org>; 'Gomes, Chuck' (cgomes@verisign.com<mailto:cgomes@verisign.com>); Sidley ICANN CCWG; ICANN-Adler; accountability-cross-community@icann.org<mailto:accountability-cross-community@icann.org> Subject: RE: CCWG - ACCT - Recommendation 4 - Community Powers Questions 1 and 2 might be re-directed at whether a director can be enforceably bound to an agreement not to bring such suits or seek such relief, such as in a pre-service letter, rather than (or in addition to) researching whether such suits and relief are possible. To Anne’s point, claims without any legal basis can still be made in court, so perhaps the focus should be on how quickly and easily they will be dismissed. An enforceable agreement would go a long way in that direction, which would be reassuring for SO/AC actors, but also a strong disincentive for directors being removed to bring a claim at all. The last question could be directed to ICANN’s insurance carrier, or other carriers who may offer such coverage, rather than legal counsel. We can do the research if directed, but I don’t think our legal expertise is needed to be able to do that work. 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<mailto:rfei@adlercolvin.com> www.adlercolvin.com<http://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: Aikman-Scalese, Anne [mailto:AAikman@lrrlaw.com] Sent: Monday, December 14, 2015 12:29 PM To: Holly Gregory; 'Steve DelBianco' Cc: gregshatanipc@gmail.com<mailto:gregshatanipc@gmail.com>; 'Phil Corwin'; cwilson@21cf.com<mailto:cwilson@21cf.com>; Rosemary E. Fei; Thomas Rickert; ipc_accountabilityct@icann.org<mailto:ipc_accountabilityct@icann.org>; 'Gomes, Chuck' (cgomes@verisign.com<mailto:cgomes@verisign.com>); Rosemary E. Fei; Sidley ICANN CCWG; ICANN-Adler; accountability-cross-community@icann.org<mailto:accountability-cross-community@icann.org> Subject: RE: CCWG - ACCT - Recommendation 4 - Community Powers 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 [cid:image001.gif@01D13698.95E5F6A0] 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 AAikman@lrrlaw.com<mailto:AAikman@lrrlaw.com> | www.LRRLaw.com<https://urldefense.proofpoint.com/v2/url?u=http-3A__www.lrrlaw.com_&d=CwMGaQ...> 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<mailto:gregshatanipc@gmail.com>; 'Phil Corwin'; cwilson@21cf.com<mailto:cwilson@21cf.com>; Rosemary Fei (rfei@adlercolvin.com<mailto:rfei@adlercolvin.com>); Thomas Rickert; ipc_accountabilityct@icann.org<mailto:ipc_accountabilityct@icann.org>; 'Gomes, Chuck' (cgomes@verisign.com<mailto:cgomes@verisign.com>); Rosemary Fei (rfei@adlercolvin.com<mailto:rfei@adlercolvin.com>); Sidley ICANN CCWG; ICANN@adlercolvin.com<mailto: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 holly.gregory@sidley.com<mailto:holly.gregory@sidley.com> From: Aikman-Scalese, Anne [mailto:AAikman@lrrlaw.com] Sent: Monday, December 14, 2015 3:03 PM To: Gregory, Holly; 'Steve DelBianco' Cc: gregshatanipc@gmail.com<mailto:gregshatanipc@gmail.com>; 'Phil Corwin'; cwilson@21cf.com<mailto:cwilson@21cf.com>; Rosemary Fei (rfei@adlercolvin.com<mailto:rfei@adlercolvin.com>); Thomas Rickert; ipc_accountabilityct@icann.org<mailto:ipc_accountabilityct@icann.org>; 'Gomes, Chuck' (cgomes@verisign.com<mailto:cgomes@verisign.com>) Subject: RE: CCWG - ACCT - Recommendation 4 - Community Powers Holly – I would tend to agree if in fact the SO or AC could 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 [cid:image001.gif@01D13698.95E5F6A0] 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 AAikman@lrrlaw.com<mailto:AAikman@lrrlaw.com> | www.LRRLaw.com<https://urldefense.proofpoint.com/v2/url?u=http-3A__www.lrrlaw.com_&d=CwMGaQ...> From: Gregory, Holly [mailto:holly.gregory@sidley.com] Sent: Monday, December 14, 2015 12:43 PM To: Aikman-Scalese, Anne; 'Steve DelBianco' Cc: gregshatanipc@gmail.com<mailto:gregshatanipc@gmail.com>; 'Phil Corwin'; cwilson@21cf.com<mailto:cwilson@21cf.com>; Rosemary Fei (rfei@adlercolvin.com<mailto: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 indemnification 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 holly.gregory@sidley.com<mailto:holly.gregory@sidley.com> f the intended recipients, and is covered by the Electronic Communications Privacy Act, 18 U.S.C. §2510-2521. ________________________________ This message and any attachments are intended only for the use of the individual or entity to which they are addressed. If the reader of this message or an attachment is not the intended recipient or the employee or agent responsible for delivering the message or attachment to the intended recipient you are hereby notified that any dissemination, distribution or copying of this message or any attachment is strictly prohibited. If you have received this communication in error, please notify us immediately by replying to the sender. The information transmitted in this message and any attachments may be privileged, is intended only for the personal and confidential use of the intended recipients, and is covered by the Electronic Communications Privacy Act, 18 U.S.C. §2510-2521. **************************************************************************************************** This e-mail is sent by a law firm and may contain information that is privileged or confidential. If you are not the intended recipient, please delete the e-mail and any attachments and notify us immediately. **************************************************************************************************** ________________________________ This message and any attachments are intended only for the use of the individual or entity to which they are addressed. If the reader of this message or an attachment is not the intended recipient or the employee or agent responsible for delivering the message or attachment to the intended recipient you are hereby notified that any dissemination, distribution or copying of this message or any attachment is strictly prohibited. If you have received this communication in error, please notify us immediately by replying to the sender. The information transmitted in this message and any attachments may be privileged, is intended only for the personal and confidential use of the intended recipients, and is covered by the Electronic Communications Privacy Act, 18 U.S.C. §2510-2521.
I made an inquiry of one of the Board members -- ICANN does not currently use Director Service letters. Greg On Mon, Dec 14, 2015 at 7:55 PM, Aikman-Scalese, Anne <AAikman@lrrlaw.com> wrote:
Thanks Holly and Rosemary. We are still trying to locate a Director Service letter – even just to determine whether they ever agree that CA law governs when they sign on.
Anne
*Anne E. Aikman-Scalese, Of Counsel*
*Lewis Roca Rothgerber LLP*
*One South Church Avenue Suite 700 | Tucson, Arizona 85701-1611*
*(T) 520.629.4428 <520.629.4428> | (F) 520.879.4725 <520.879.4725>*
*AAikman@lrrlaw.com <AAikman@lrrlaw.com>** | www.LRRLaw.com <http://www.lrrlaw.com/>*
*From:* Gregory, Holly [mailto:holly.gregory@sidley.com] *Sent:* Monday, December 14, 2015 5:42 PM *To:* Rosemary E. Fei; Aikman-Scalese, Anne; 'Steve DelBianco'
*Cc:* gregshatanipc@gmail.com; 'Phil Corwin'; cwilson@21cf.com; Thomas Rickert; ipc_accountabilityct@icann.org; 'Gomes, Chuck' ( cgomes@verisign.com); Sidley ICANN CCWG; ICANN-Adler; accountability-cross-community@icann.org *Subject:* RE: CCWG - ACCT - Recommendation 4 - Community Powers
Agreed
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------------------------------
*From:* Rosemary E. Fei *Sent:* Monday, December 14, 2015 06:41:09 PM *To:* Aikman-Scalese, Anne; Gregory, Holly; 'Steve DelBianco' *Cc:* gregshatanipc@gmail.com; 'Phil Corwin'; cwilson@21cf.com; Thomas Rickert; ipc_accountabilityct@icann.org; 'Gomes, Chuck' ( cgomes@verisign.com); Sidley ICANN CCWG; ICANN-Adler; accountability-cross-community@icann.org *Subject:* RE: CCWG - ACCT - Recommendation 4 - Community Powers
Questions 1 and 2 might be re-directed at whether a director can be enforceably bound to an agreement not to bring such suits or seek such relief, such as in a pre-service letter, rather than (or in addition to) researching whether such suits and relief are possible. To Anne’s point, claims without any legal basis can still be made in court, so perhaps the focus should be on how quickly and easily they will be dismissed. An enforceable agreement would go a long way in that direction, which would be reassuring for SO/AC actors, but also a strong disincentive for directors being removed to bring a claim at all.
The last question could be directed to ICANN’s insurance carrier, or other carriers who may offer such coverage, rather than legal counsel. We can do the research if directed, but I don’t think our legal expertise is needed to be able to do that work.
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:* Aikman-Scalese, Anne [mailto:AAikman@lrrlaw.com <AAikman@lrrlaw.com>] *Sent:* Monday, December 14, 2015 12:29 PM *To:* Holly Gregory; 'Steve DelBianco' *Cc:* gregshatanipc@gmail.com; 'Phil Corwin'; cwilson@21cf.com; Rosemary E. Fei; Thomas Rickert; ipc_accountabilityct@icann.org; 'Gomes, Chuck' ( cgomes@verisign.com); Rosemary E. Fei; Sidley ICANN CCWG; ICANN-Adler; accountability-cross-community@icann.org *Subject:* RE: CCWG - ACCT - Recommendation 4 - Community Powers
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
*Anne E. Aikman-Scalese, Of Counsel*
*Lewis Roca Rothgerber LLP*
*One South Church Avenue Suite 700 | Tucson, Arizona 85701-1611*
*(T) 520.629.4428 <520.629.4428> | (F) 520.879.4725 <520.879.4725>*
*AAikman@lrrlaw.com <AAikman@lrrlaw.com>** | www.LRRLaw.com <https://urldefense.proofpoint.com/v2/url?u=http-3A__www.lrrlaw.com_&d=CwMGaQ&c=Od00qP2XTg0tXf_H69-T2w&r=1-1w8mU_eFprE2Nn9QnYf01XIV88MOwkXwHYEbF2Y_8&m=trlTGCn494B2WVzErbucQz6en49m-qs150hXbEVNqPs&s=ZgQQyaP1W9CyE30YnuM1f1ve1enoUE3pRQCjlalpACs&e=>*
*From:* Gregory, Holly [mailto:holly.gregory@sidley.com <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 holly.gregory@sidley.com
*From:* Aikman-Scalese, Anne [mailto:AAikman@lrrlaw.com <AAikman@lrrlaw.com>] *Sent:* Monday, December 14, 2015 3:03 PM *To:* Gregory, Holly; '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) *Subject:* RE: CCWG - ACCT - Recommendation 4 - Community Powers
Holly – I would tend to agree if in fact the SO or AC could 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
*Anne E. Aikman-Scalese, Of Counsel*
*Lewis Roca Rothgerber LLP*
*One South Church Avenue Suite 700 | Tucson, Arizona 85701-1611*
*(T) 520.629.4428 <520.629.4428> | (F) 520.879.4725 <520.879.4725>*
*AAikman@lrrlaw.com <AAikman@lrrlaw.com>** | www.LRRLaw.com <https://urldefense.proofpoint.com/v2/url?u=http-3A__www.lrrlaw.com_&d=CwMGaQ&c=Od00qP2XTg0tXf_H69-T2w&r=1-1w8mU_eFprE2Nn9QnYf01XIV88MOwkXwHYEbF2Y_8&m=-r-X1vqLqfFo7wDtSJ7AQkHOsUyJczd-GcHxg4tVr_4&s=vqBDgdI1aOR4vc8v3l4jKLsfuSCdEocU8QaPE3RstAA&e=>*
*From:* Gregory, Holly [mailto:holly.gregory@sidley.com <holly.gregory@sidley.com>] *Sent:* Monday, December 14, 2015 12:43 PM *To:* Aikman-Scalese, Anne; 'Steve DelBianco' *Cc:* gregshatanipc@gmail.com; 'Phil Corwin'; cwilson@21cf.com; Rosemary Fei (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 indemnification 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 holly.gregory@sidley.com
f the intended recipients, and is covered by the Electronic Communications Privacy Act, 18 U.S.C. §2510-2521.
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There are two questions here, and they should be viewed separately. One question is how likely it is that a non-frivolous suit could be brought by a Board member being recalled. I think the chances of that are actually quite small, and that this threat is being massively overblown, but that is the wrong point to spend time on. The other question is how easy it would be to eliminate this threat, regardless of how unlikely or far-fetched it really is. I think the answer to that is that it would be quite easy to do, through use of a "pre-service letter" or other binding agreement preventing Board members from filing suit arising from their recall. This is where we should concentrate our efforts. If we want to take time to debate whether or not the scenarios involving litigation by a recalled Board member are realistic or credible, I'll wade into that debate. But we have very little time and much more significant issues to spend our time on. In the end it doesn't matter, if the threat can be eliminated easily. Greg On Mon, Dec 14, 2015 at 10:39 PM, Greg Shatan <gregshatanipc@gmail.com> wrote:
I made an inquiry of one of the Board members -- ICANN does not currently use Director Service letters.
Greg
On Mon, Dec 14, 2015 at 7:55 PM, Aikman-Scalese, Anne <AAikman@lrrlaw.com> wrote:
Thanks Holly and Rosemary. We are still trying to locate a Director Service letter – even just to determine whether they ever agree that CA law governs when they sign on.
Anne
*Anne E. Aikman-Scalese, Of Counsel*
*Lewis Roca Rothgerber LLP*
*One South Church Avenue Suite 700 | Tucson, Arizona 85701-1611*
*(T) 520.629.4428 <520.629.4428> | (F) 520.879.4725 <520.879.4725>*
*AAikman@lrrlaw.com <AAikman@lrrlaw.com>** | www.LRRLaw.com <http://www.lrrlaw.com/>*
*From:* Gregory, Holly [mailto:holly.gregory@sidley.com] *Sent:* Monday, December 14, 2015 5:42 PM *To:* Rosemary E. Fei; Aikman-Scalese, Anne; 'Steve DelBianco'
*Cc:* gregshatanipc@gmail.com; 'Phil Corwin'; cwilson@21cf.com; Thomas Rickert; ipc_accountabilityct@icann.org; 'Gomes, Chuck' ( cgomes@verisign.com); Sidley ICANN CCWG; ICANN-Adler; accountability-cross-community@icann.org *Subject:* RE: CCWG - ACCT - Recommendation 4 - Community Powers
Agreed
Sent with Good (www.good.com)
------------------------------
*From:* Rosemary E. Fei *Sent:* Monday, December 14, 2015 06:41:09 PM *To:* Aikman-Scalese, Anne; Gregory, Holly; 'Steve DelBianco' *Cc:* gregshatanipc@gmail.com; 'Phil Corwin'; cwilson@21cf.com; Thomas Rickert; ipc_accountabilityct@icann.org; 'Gomes, Chuck' ( cgomes@verisign.com); Sidley ICANN CCWG; ICANN-Adler; accountability-cross-community@icann.org *Subject:* RE: CCWG - ACCT - Recommendation 4 - Community Powers
Questions 1 and 2 might be re-directed at whether a director can be enforceably bound to an agreement not to bring such suits or seek such relief, such as in a pre-service letter, rather than (or in addition to) researching whether such suits and relief are possible. To Anne’s point, claims without any legal basis can still be made in court, so perhaps the focus should be on how quickly and easily they will be dismissed. An enforceable agreement would go a long way in that direction, which would be reassuring for SO/AC actors, but also a strong disincentive for directors being removed to bring a claim at all.
The last question could be directed to ICANN’s insurance carrier, or other carriers who may offer such coverage, rather than legal counsel. We can do the research if directed, but I don’t think our legal expertise is needed to be able to do that work.
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:* Aikman-Scalese, Anne [mailto:AAikman@lrrlaw.com <AAikman@lrrlaw.com>] *Sent:* Monday, December 14, 2015 12:29 PM *To:* Holly Gregory; 'Steve DelBianco' *Cc:* gregshatanipc@gmail.com; 'Phil Corwin'; cwilson@21cf.com; Rosemary E. Fei; Thomas Rickert; ipc_accountabilityct@icann.org; 'Gomes, Chuck' ( cgomes@verisign.com); Rosemary E. Fei; Sidley ICANN CCWG; ICANN-Adler; accountability-cross-community@icann.org *Subject:* RE: CCWG - ACCT - Recommendation 4 - Community Powers
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
*Anne E. Aikman-Scalese, Of Counsel*
*Lewis Roca Rothgerber LLP*
*One South Church Avenue Suite 700 | Tucson, Arizona 85701-1611*
*(T) 520.629.4428 <520.629.4428> | (F) 520.879.4725 <520.879.4725>*
*AAikman@lrrlaw.com <AAikman@lrrlaw.com>** | www.LRRLaw.com <https://urldefense.proofpoint.com/v2/url?u=http-3A__www.lrrlaw.com_&d=CwMGaQ&c=Od00qP2XTg0tXf_H69-T2w&r=1-1w8mU_eFprE2Nn9QnYf01XIV88MOwkXwHYEbF2Y_8&m=trlTGCn494B2WVzErbucQz6en49m-qs150hXbEVNqPs&s=ZgQQyaP1W9CyE30YnuM1f1ve1enoUE3pRQCjlalpACs&e=>*
*From:* Gregory, Holly [mailto:holly.gregory@sidley.com <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 holly.gregory@sidley.com
*From:* Aikman-Scalese, Anne [mailto:AAikman@lrrlaw.com <AAikman@lrrlaw.com>] *Sent:* Monday, December 14, 2015 3:03 PM *To:* Gregory, Holly; '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) *Subject:* RE: CCWG - ACCT - Recommendation 4 - Community Powers
Holly – I would tend to agree if in fact the SO or AC could 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
*Anne E. Aikman-Scalese, Of Counsel*
*Lewis Roca Rothgerber LLP*
*One South Church Avenue Suite 700 | Tucson, Arizona 85701-1611*
*(T) 520.629.4428 <520.629.4428> | (F) 520.879.4725 <520.879.4725>*
*AAikman@lrrlaw.com <AAikman@lrrlaw.com>** | www.LRRLaw.com <https://urldefense.proofpoint.com/v2/url?u=http-3A__www.lrrlaw.com_&d=CwMGaQ&c=Od00qP2XTg0tXf_H69-T2w&r=1-1w8mU_eFprE2Nn9QnYf01XIV88MOwkXwHYEbF2Y_8&m=-r-X1vqLqfFo7wDtSJ7AQkHOsUyJczd-GcHxg4tVr_4&s=vqBDgdI1aOR4vc8v3l4jKLsfuSCdEocU8QaPE3RstAA&e=>*
*From:* Gregory, Holly [mailto:holly.gregory@sidley.com <holly.gregory@sidley.com>] *Sent:* Monday, December 14, 2015 12:43 PM *To:* Aikman-Scalese, Anne; 'Steve DelBianco' *Cc:* gregshatanipc@gmail.com; 'Phil Corwin'; cwilson@21cf.com; Rosemary Fei (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 indemnification 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 holly.gregory@sidley.com
f the intended recipients, and is covered by the Electronic Communications Privacy Act, 18 U.S.C. §2510-2521.
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At this juncture, I thought the attached summary may prove instructive as well as amusing (from Wikipedia --- https://en.wikipedia.org/wiki/The_Writing_on_the_Wall_%28Yes_Minister%29) . . .
Jim Hacker is engaged in a verbal battle with his Permanent Secretary, Sir Humphrey Appleby (with contributions from Bernard, his Principal Private Secretary) regarding the third draft of a policy review relating to overmanning in the civil service. Hacker seeks a phased reduction of around 200,000 staff and, despite Sir Humphrey's assertions to the contrary, he is unhappy that this is the translation of the "totally unintelligible" report that he has received. Hacker is concerned that Sir Humphrey does not share his views on the matter and presses him for a straight "yes or no" answer. Sir Humphrey gives his usual ambiguous reply, which vexes the Minister.
Sometime later, Sir Humphrey invites Bernard for an informal chat. He has not yet seen the Minister's redraft of the policy review and wonders why. At first, Bernard is tightlipped, reminding Sir Humphrey that he is the Minister's Principal Private Secretary. His superior does not like this approach and points out that ministers come and go, whereas Bernard would be hoping for a long career in the civil service. Bernard takes the hint and asks Sir Humphrey if he had a duty to inform him if — to take a purely hypothetical example — a minister and his political advisors had decided to redraft a report between them and then submit it to committee at the last moment, before it could be amended by anyone else. Sir Humphrey tells him that he should not, particularly if such information was given in confidence. However, he is now sufficiently pleased to offer Bernard a drink.
Sir Humphrey confronts Hacker over the report and firmly requests that he be allowed to see the Minister's draft. At first Hacker brushes him off but eventually comes clean and informs him that he is happy with his own version and the report needs no further amendment. He tells Sir Humphrey that he has done nothing but stand in his way ever since he came into office and he is now determined to push this through. His Permanent Secretary remains implacably opposed and when Hacker demands a simple explanation, Sir Humphrey is uncharacteristically blunt, telling him, "If you're going to do this damn silly thing, don't do it in this damn silly way."
While the Minister is in a Cabinet meeting, Sir Humphrey and his colleague Sir Frederick Stewart wait outside. Also there is Daniel Hughes, the Prime Minister's senior policy advisor. He lets slip to the two civil servants that the PM has decided to take on the overmanning problem himself and is favourable to the abolition of the Department of Administrative Affairs.
Now Hacker and Sir Humphrey are of one mind and agree that they are appalled. They know they have to work together to save their careers, and try to formulate a plan. They enlist the help of Frank Weisel, Hacker's political advisor, and ask him to mobilise the backbench MPs, but he is pessimistic. Bernard then brings up the controversial policy of the Europass: the introduction of a Europe-wide identity card, which is set to be the last piece of legislation supervised by the DAA. Sir Humphrey explains that no other department wanted to handle it and expands on the reasons for Britain going into the Common Market. (Apparently because the civil service was opposed to it — on the grounds that a disunited Europe has always worked in the past, and if they were on the inside, they stood a better chance of disrupting it.) Hacker is paranoid that he has only been chosen for the job so the PM can be certain that he needs to be removed. He, Weisel and Sir Humphrey decide to visit Ma! rtin, the
Foreign Secretary.
They learn that the Prime Minister is in the running for the Napoleon Prize, which is awarded for making the greatest contribution to European unity. However, he doesn't want any mention of the Europass before the ceremony for fear of rocking the boat. When they are joined by Daniel Hughes, Hacker obliquely threatens to table a question in the House of Commons, asking the PM to make an unequivocal commitment to the policy — which would infuriate either the British or the rest of Europe, depending on his answer — unless the plan to dismantle the DAA is abolished.
The original can be viewed at https://www.youtube.com/watch?v=QgpmNuewwo4
Greg – again my view is quite different. What concerns me is the chilling effect on any SO/AC as they draft the “written justification” for removal of a director. No officer wants to deal with the cost of a defense so there cannot be a frank discussion and the model is not effective unless the Community feels safe in exercising the removal rights. I do not think this chilling effect is overblown when one considers the legal advice that will be necessary to any SO/AC when undertaking the steps in the community engagement process. They will have to be very careful. This is precisely why outside counsel advised the CCWG that cause should not be required for removal. The issue is not whether the risk is small. The issue is whether the SO/AC officers and Community members will be willing to accept the financial risk as individuals. Perhaps you would be but to me it’s “The Big Chill”. Anne [cid:image001.gif@01D13716.07FF8710] 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 AAikman@lrrlaw.com<mailto:AAikman@lrrlaw.com> | www.LRRLaw.com<http://www.lrrlaw.com/> From: Greg Shatan [mailto:gregshatanipc@gmail.com] Sent: Monday, December 14, 2015 10:49 PM To: Aikman-Scalese, Anne Cc: Gregory, Holly; Rosemary E. Fei; Steve DelBianco; Phil Corwin; cwilson@21cf.com; Thomas Rickert; ipc_accountabilityct@icann.org; 'Gomes, Chuck' (cgomes@verisign.com); Sidley ICANN CCWG; ICANN-Adler; accountability-cross-community@icann.org Subject: Re: CCWG - ACCT - Recommendation 4 - Community Powers There are two questions here, and they should be viewed separately. One question is how likely it is that a non-frivolous suit could be brought by a Board member being recalled. I think the chances of that are actually quite small, and that this threat is being massively overblown, but that is the wrong point to spend time on. The other question is how easy it would be to eliminate this threat, regardless of how unlikely or far-fetched it really is. I think the answer to that is that it would be quite easy to do, through use of a "pre-service letter" or other binding agreement preventing Board members from filing suit arising from their recall. This is where we should concentrate our efforts. If we want to take time to debate whether or not the scenarios involving litigation by a recalled Board member are realistic or credible, I'll wade into that debate. But we have very little time and much more significant issues to spend our time on. In the end it doesn't matter, if the threat can be eliminated easily. Greg On Mon, Dec 14, 2015 at 10:39 PM, Greg Shatan <gregshatanipc@gmail.com<mailto:gregshatanipc@gmail.com>> wrote: I made an inquiry of one of the Board members -- ICANN does not currently use Director Service letters. Greg On Mon, Dec 14, 2015 at 7:55 PM, Aikman-Scalese, Anne <AAikman@lrrlaw.com<mailto:AAikman@lrrlaw.com>> wrote: Thanks Holly and Rosemary. We are still trying to locate a Director Service letter – even just to determine whether they ever agree that CA law governs when they sign on. Anne [cid:image001.gif@01D13716.07FF8710] Anne E. Aikman-Scalese, Of Counsel Lewis Roca Rothgerber LLP One South Church Avenue Suite 700 | Tucson, Arizona 85701-1611 (T) 520.629.4428<tel:520.629.4428> | (F) 520.879.4725<tel:520.879.4725> AAikman@lrrlaw.com<mailto:AAikman@lrrlaw.com> | www.LRRLaw.com<http://www.lrrlaw.com/> From: Gregory, Holly [mailto:holly.gregory@sidley.com<mailto:holly.gregory@sidley.com>] Sent: Monday, December 14, 2015 5:42 PM To: Rosemary E. Fei; Aikman-Scalese, Anne; 'Steve DelBianco' Cc: gregshatanipc@gmail.com<mailto:gregshatanipc@gmail.com>; 'Phil Corwin'; cwilson@21cf.com<mailto:cwilson@21cf.com>; Thomas Rickert; ipc_accountabilityct@icann.org<mailto:ipc_accountabilityct@icann.org>; 'Gomes, Chuck' (cgomes@verisign.com<mailto:cgomes@verisign.com>); Sidley ICANN CCWG; ICANN-Adler; accountability-cross-community@icann.org<mailto:accountability-cross-community@icann.org> Subject: RE: CCWG - ACCT - Recommendation 4 - Community Powers Agreed Sent with Good (www.good.com<http://www.good.com>) ________________________________ From: Rosemary E. Fei Sent: Monday, December 14, 2015 06:41:09 PM To: Aikman-Scalese, Anne; Gregory, Holly; 'Steve DelBianco' Cc: gregshatanipc@gmail.com<mailto:gregshatanipc@gmail.com>; 'Phil Corwin'; cwilson@21cf.com<mailto:cwilson@21cf.com>; Thomas Rickert; ipc_accountabilityct@icann.org<mailto:ipc_accountabilityct@icann.org>; 'Gomes, Chuck' (cgomes@verisign.com<mailto:cgomes@verisign.com>); Sidley ICANN CCWG; ICANN-Adler; accountability-cross-community@icann.org<mailto:accountability-cross-community@icann.org> Subject: RE: CCWG - ACCT - Recommendation 4 - Community Powers Questions 1 and 2 might be re-directed at whether a director can be enforceably bound to an agreement not to bring such suits or seek such relief, such as in a pre-service letter, rather than (or in addition to) researching whether such suits and relief are possible. To Anne’s point, claims without any legal basis can still be made in court, so perhaps the focus should be on how quickly and easily they will be dismissed. An enforceable agreement would go a long way in that direction, which would be reassuring for SO/AC actors, but also a strong disincentive for directors being removed to bring a claim at all. The last question could be directed to ICANN’s insurance carrier, or other carriers who may offer such coverage, rather than legal counsel. We can do the research if directed, but I don’t think our legal expertise is needed to be able to do that work. Rosemary Rosemary E. Fei Adler & Colvin 235 Montgomery Street, Suite 1220 San Francisco, CA 94104 415/421-7555<tel:415%2F421-7555> (phone) 415/421-0712<tel:415%2F421-0712> (fax) rfei@adlercolvin.com<mailto:rfei@adlercolvin.com> www.adlercolvin.com<http://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: Aikman-Scalese, Anne [mailto:AAikman@lrrlaw.com] Sent: Monday, December 14, 2015 12:29 PM To: Holly Gregory; 'Steve DelBianco' Cc: gregshatanipc@gmail.com<mailto:gregshatanipc@gmail.com>; 'Phil Corwin'; cwilson@21cf.com<mailto:cwilson@21cf.com>; Rosemary E. Fei; Thomas Rickert; ipc_accountabilityct@icann.org<mailto:ipc_accountabilityct@icann.org>; 'Gomes, Chuck' (cgomes@verisign.com<mailto:cgomes@verisign.com>); Rosemary E. Fei; Sidley ICANN CCWG; ICANN-Adler; accountability-cross-community@icann.org<mailto:accountability-cross-community@icann.org> Subject: RE: CCWG - ACCT - Recommendation 4 - Community Powers 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 [cid:image001.gif@01D13716.07FF8710] Anne E. Aikman-Scalese, Of Counsel Lewis Roca Rothgerber LLP One South Church Avenue Suite 700 | Tucson, Arizona 85701-1611 (T) 520.629.4428<tel:520.629.4428> | (F) 520.879.4725<tel:520.879.4725> AAikman@lrrlaw.com<mailto:AAikman@lrrlaw.com> | www.LRRLaw.com<https://urldefense.proofpoint.com/v2/url?u=http-3A__www.lrrlaw.com_&d=CwMGaQ...> 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<mailto:gregshatanipc@gmail.com>; 'Phil Corwin'; cwilson@21cf.com<mailto:cwilson@21cf.com>; Rosemary Fei (rfei@adlercolvin.com<mailto:rfei@adlercolvin.com>); Thomas Rickert; ipc_accountabilityct@icann.org<mailto:ipc_accountabilityct@icann.org>; 'Gomes, Chuck' (cgomes@verisign.com<mailto:cgomes@verisign.com>); Rosemary Fei (rfei@adlercolvin.com<mailto:rfei@adlercolvin.com>); Sidley ICANN CCWG; ICANN@adlercolvin.com<mailto: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<tel:%2B1%20212%20839%205853> holly.gregory@sidley.com<mailto:holly.gregory@sidley.com> From: Aikman-Scalese, Anne [mailto:AAikman@lrrlaw.com] Sent: Monday, December 14, 2015 3:03 PM To: Gregory, Holly; 'Steve DelBianco' Cc: gregshatanipc@gmail.com<mailto:gregshatanipc@gmail.com>; 'Phil Corwin'; cwilson@21cf.com<mailto:cwilson@21cf.com>; Rosemary Fei (rfei@adlercolvin.com<mailto:rfei@adlercolvin.com>); Thomas Rickert; ipc_accountabilityct@icann.org<mailto:ipc_accountabilityct@icann.org>; 'Gomes, Chuck' (cgomes@verisign.com<mailto:cgomes@verisign.com>) Subject: RE: CCWG - ACCT - Recommendation 4 - Community Powers Holly – I would tend to agree if in fact the SO or AC could 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 [cid:image001.gif@01D13716.07FF8710] Anne E. Aikman-Scalese, Of Counsel Lewis Roca Rothgerber LLP One South Church Avenue Suite 700 | Tucson, Arizona 85701-1611 (T) 520.629.4428<tel:520.629.4428> | (F) 520.879.4725<tel:520.879.4725> AAikman@lrrlaw.com<mailto:AAikman@lrrlaw.com> | www.LRRLaw.com<https://urldefense.proofpoint.com/v2/url?u=http-3A__www.lrrlaw.com_&d=CwMGaQ...> From: Gregory, Holly [mailto:holly.gregory@sidley.com] Sent: Monday, December 14, 2015 12:43 PM To: Aikman-Scalese, Anne; 'Steve DelBianco' Cc: gregshatanipc@gmail.com<mailto:gregshatanipc@gmail.com>; 'Phil Corwin'; cwilson@21cf.com<mailto:cwilson@21cf.com>; Rosemary Fei (rfei@adlercolvin.com<mailto: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 indemnification 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<tel:%2B1%20212%20839%205853> holly.gregory@sidley.com<mailto:holly.gregory@sidley.com> f the intended recipients, and is covered by the Electronic Communications Privacy Act, 18 U.S.C. §2510-2521. ________________________________ This message and any attachments are intended only for the use of the individual or entity to which they are addressed. 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I agree with Anne. The deck is already heavily stacked against the removal of a board member. There is a long, complex engagement and escalation process. There can be only one challenge per term (a limitation I am ok with). The threshold of action is approval of 4 of 5 ACs/SOs, with each one of them (the 15-person ALAC excepted) being large diverse entities with sometimes formidable internal politics. It is hard to conceive of anyone going into that process, much less coming out of it, without a fairly clear rationale for the removal. The “written justification” just adds a needless risk and additional barrier. --MM Greg – again my view is quite different. What concerns me is the chilling effect on any SO/AC as they draft the “written justification” for removal of a director. No officer wants to deal with the cost of a defense so there cannot be a frank discussion and the model is not effective unless the Community feels safe in exercising the removal rights. I do not think this chilling effect is overblown when one considers the legal advice that will be necessary to any SO/AC when undertaking the steps in the community engagement process. They will have to be very careful. This is precisely why outside counsel advised the CCWG that cause should not be required for removal. The issue is not whether the risk is small. The issue is whether the SO/AC officers and Community members will be willing to accept the financial risk as individuals. Perhaps you would be but to me it’s “The Big Chill”. Anne [cid:image001.gif@01D13743.CF12FE40] 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 AAikman@lrrlaw.com<mailto:AAikman@lrrlaw.com> | www.LRRLaw.com<http://www.lrrlaw.com/> From: Greg Shatan [mailto:gregshatanipc@gmail.com] Sent: Monday, December 14, 2015 10:49 PM To: Aikman-Scalese, Anne Cc: Gregory, Holly; Rosemary E. Fei; Steve DelBianco; Phil Corwin; cwilson@21cf.com<mailto:cwilson@21cf.com>; Thomas Rickert; ipc_accountabilityct@icann.org<mailto:ipc_accountabilityct@icann.org>; 'Gomes, Chuck' (cgomes@verisign.com<mailto:cgomes@verisign.com>); Sidley ICANN CCWG; ICANN-Adler; accountability-cross-community@icann.org<mailto:accountability-cross-community@icann.org> Subject: Re: CCWG - ACCT - Recommendation 4 - Community Powers There are two questions here, and they should be viewed separately. One question is how likely it is that a non-frivolous suit could be brought by a Board member being recalled. I think the chances of that are actually quite small, and that this threat is being massively overblown, but that is the wrong point to spend time on. The other question is how easy it would be to eliminate this threat, regardless of how unlikely or far-fetched it really is. I think the answer to that is that it would be quite easy to do, through use of a "pre-service letter" or other binding agreement preventing Board members from filing suit arising from their recall. This is where we should concentrate our efforts. If we want to take time to debate whether or not the scenarios involving litigation by a recalled Board member are realistic or credible, I'll wade into that debate. But we have very little time and much more significant issues to spend our time on. In the end it doesn't matter, if the threat can be eliminated easily. Greg On Mon, Dec 14, 2015 at 10:39 PM, Greg Shatan <gregshatanipc@gmail.com<mailto:gregshatanipc@gmail.com>> wrote: I made an inquiry of one of the Board members -- ICANN does not currently use Director Service letters. Greg On Mon, Dec 14, 2015 at 7:55 PM, Aikman-Scalese, Anne <AAikman@lrrlaw.com<mailto:AAikman@lrrlaw.com>> wrote: Thanks Holly and Rosemary. We are still trying to locate a Director Service letter – even just to determine whether they ever agree that CA law governs when they sign on. Anne [cid:image001.gif@01D13743.CF12FE40] Anne E. Aikman-Scalese, Of Counsel Lewis Roca Rothgerber LLP One South Church Avenue Suite 700 | Tucson, Arizona 85701-1611 (T) 520.629.4428<tel:520.629.4428> | (F) 520.879.4725<tel:520.879.4725> AAikman@lrrlaw.com<mailto:AAikman@lrrlaw.com> | www.LRRLaw.com<http://www.lrrlaw.com/> From: Gregory, Holly [mailto:holly.gregory@sidley.com<mailto:holly.gregory@sidley.com>] Sent: Monday, December 14, 2015 5:42 PM To: Rosemary E. Fei; Aikman-Scalese, Anne; 'Steve DelBianco' Cc: gregshatanipc@gmail.com<mailto:gregshatanipc@gmail.com>; 'Phil Corwin'; cwilson@21cf.com<mailto:cwilson@21cf.com>; Thomas Rickert; ipc_accountabilityct@icann.org<mailto:ipc_accountabilityct@icann.org>; 'Gomes, Chuck' (cgomes@verisign.com<mailto:cgomes@verisign.com>); Sidley ICANN CCWG; ICANN-Adler; accountability-cross-community@icann.org<mailto:accountability-cross-community@icann.org> Subject: RE: CCWG - ACCT - Recommendation 4 - Community Powers Agreed Sent with Good (www.good.com<http://www.good.com>) ________________________________ From: Rosemary E. Fei Sent: Monday, December 14, 2015 06:41:09 PM To: Aikman-Scalese, Anne; Gregory, Holly; 'Steve DelBianco' Cc: gregshatanipc@gmail.com<mailto:gregshatanipc@gmail.com>; 'Phil Corwin'; cwilson@21cf.com<mailto:cwilson@21cf.com>; Thomas Rickert; ipc_accountabilityct@icann.org<mailto:ipc_accountabilityct@icann.org>; 'Gomes, Chuck' (cgomes@verisign.com<mailto:cgomes@verisign.com>); Sidley ICANN CCWG; ICANN-Adler; accountability-cross-community@icann.org<mailto:accountability-cross-community@icann.org> Subject: RE: CCWG - ACCT - Recommendation 4 - Community Powers Questions 1 and 2 might be re-directed at whether a director can be enforceably bound to an agreement not to bring such suits or seek such relief, such as in a pre-service letter, rather than (or in addition to) researching whether such suits and relief are possible. To Anne’s point, claims without any legal basis can still be made in court, so perhaps the focus should be on how quickly and easily they will be dismissed. An enforceable agreement would go a long way in that direction, which would be reassuring for SO/AC actors, but also a strong disincentive for directors being removed to bring a claim at all. The last question could be directed to ICANN’s insurance carrier, or other carriers who may offer such coverage, rather than legal counsel. We can do the research if directed, but I don’t think our legal expertise is needed to be able to do that work. Rosemary Rosemary E. Fei Adler & Colvin 235 Montgomery Street, Suite 1220 San Francisco, CA 94104 415/421-7555<tel:415%2F421-7555> (phone) 415/421-0712<tel:415%2F421-0712> (fax) rfei@adlercolvin.com<mailto:rfei@adlercolvin.com> www.adlercolvin.com<http://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: Aikman-Scalese, Anne [mailto:AAikman@lrrlaw.com] Sent: Monday, December 14, 2015 12:29 PM To: Holly Gregory; 'Steve DelBianco' Cc: gregshatanipc@gmail.com<mailto:gregshatanipc@gmail.com>; 'Phil Corwin'; cwilson@21cf.com<mailto:cwilson@21cf.com>; Rosemary E. Fei; Thomas Rickert; ipc_accountabilityct@icann.org<mailto:ipc_accountabilityct@icann.org>; 'Gomes, Chuck' (cgomes@verisign.com<mailto:cgomes@verisign.com>); Rosemary E. Fei; Sidley ICANN CCWG; ICANN-Adler; accountability-cross-community@icann.org<mailto:accountability-cross-community@icann.org> Subject: RE: CCWG - ACCT - Recommendation 4 - Community Powers 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 [cid:image001.gif@01D13743.CF12FE40] Anne E. Aikman-Scalese, Of Counsel Lewis Roca Rothgerber LLP One South Church Avenue Suite 700 | Tucson, Arizona 85701-1611 (T) 520.629.4428<tel:520.629.4428> | (F) 520.879.4725<tel:520.879.4725> AAikman@lrrlaw.com<mailto:AAikman@lrrlaw.com> | www.LRRLaw.com<https://urldefense.proofpoint.com/v2/url?u=http-3A__www.lrrlaw.com_&d=CwMGaQ...> 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<mailto:gregshatanipc@gmail.com>; 'Phil Corwin'; cwilson@21cf.com<mailto:cwilson@21cf.com>; Rosemary Fei (rfei@adlercolvin.com<mailto:rfei@adlercolvin.com>); Thomas Rickert; ipc_accountabilityct@icann.org<mailto:ipc_accountabilityct@icann.org>; 'Gomes, Chuck' (cgomes@verisign.com<mailto:cgomes@verisign.com>); Rosemary Fei (rfei@adlercolvin.com<mailto:rfei@adlercolvin.com>); Sidley ICANN CCWG; ICANN@adlercolvin.com<mailto: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<tel:%2B1%20212%20839%205853> holly.gregory@sidley.com<mailto:holly.gregory@sidley.com> From: Aikman-Scalese, Anne [mailto:AAikman@lrrlaw.com] Sent: Monday, December 14, 2015 3:03 PM To: Gregory, Holly; 'Steve DelBianco' Cc: gregshatanipc@gmail.com<mailto:gregshatanipc@gmail.com>; 'Phil Corwin'; cwilson@21cf.com<mailto:cwilson@21cf.com>; Rosemary Fei (rfei@adlercolvin.com<mailto:rfei@adlercolvin.com>); Thomas Rickert; ipc_accountabilityct@icann.org<mailto:ipc_accountabilityct@icann.org>; 'Gomes, Chuck' (cgomes@verisign.com<mailto:cgomes@verisign.com>) Subject: RE: CCWG - ACCT - Recommendation 4 - Community Powers Holly – I would tend to agree if in fact the SO or AC could 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 [cid:image001.gif@01D13743.CF12FE40] Anne E. Aikman-Scalese, Of Counsel Lewis Roca Rothgerber LLP One South Church Avenue Suite 700 | Tucson, Arizona 85701-1611 (T) 520.629.4428<tel:520.629.4428> | (F) 520.879.4725<tel:520.879.4725> AAikman@lrrlaw.com<mailto:AAikman@lrrlaw.com> | www.LRRLaw.com<https://urldefense.proofpoint.com/v2/url?u=http-3A__www.lrrlaw.com_&d=CwMGaQ...> From: Gregory, Holly [mailto:holly.gregory@sidley.com] Sent: Monday, December 14, 2015 12:43 PM To: Aikman-Scalese, Anne; 'Steve DelBianco' Cc: gregshatanipc@gmail.com<mailto:gregshatanipc@gmail.com>; 'Phil Corwin'; cwilson@21cf.com<mailto:cwilson@21cf.com>; Rosemary Fei (rfei@adlercolvin.com<mailto: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 indemnification 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<tel:%2B1%20212%20839%205853> holly.gregory@sidley.com<mailto:holly.gregory@sidley.com> f the intended recipients, and is covered by the Electronic Communications Privacy Act, 18 U.S.C. §2510-2521. ________________________________ This message and any attachments are intended only for the use of the individual or entity to which they are addressed. 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Dear Anne, I am drawing your attention to the webinar FAQ where our lawyers have provided additional details to your questions (page 3 and 4, questions 8 to 12). https://community.icann.org/download/attachments/56984258/Webinar%20-%20Fina... <https://community.icann.org/download/attachments/56984258/Webinar%20-%20Fina...> &modificationDate=1450173637000&api=v2 In light of this additional material and the responses provided in this thread I would like to confirm that we have sufficient legal input. My impression is that the question then becomes, for the CCWG itself, whether the pre-service letters are perceived by the group as a useful extra measure to implement the power, and I noted that ALAC (in Alan’s post earlier to our last call) was suggesting the same. Best Mathieu De : accountability-cross-community-bounces@icann.org [mailto:accountability-cross-community-bounces@icann.org] De la part de Rosemary E. Fei Envoyé : mardi 15 décembre 2015 01:41 À : Aikman-Scalese, Anne; Holly Gregory; 'Steve DelBianco' Cc : accountability-cross-community@icann.org; 'Gomes, Chuck' (cgomes@verisign.com); Sidley ICANN CCWG; ipc_accountabilityct@icann.org; ICANN-Adler Objet : Re: [CCWG-ACCT] CCWG - ACCT - Recommendation 4 - Community Powers Questions 1 and 2 might be re-directed at whether a director can be enforceably bound to an agreement not to bring such suits or seek such relief, such as in a pre-service letter, rather than (or in addition to) researching whether such suits and relief are possible. To Anne’s point, claims without any legal basis can still be made in court, so perhaps the focus should be on how quickly and easily they will be dismissed. An enforceable agreement would go a long way in that direction, which would be reassuring for SO/AC actors, but also a strong disincentive for directors being removed to bring a claim at all. The last question could be directed to ICANN’s insurance carrier, or other carriers who may offer such coverage, rather than legal counsel. We can do the research if directed, but I don’t think our legal expertise is needed to be able to do that work. 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: Aikman-Scalese, Anne [mailto:AAikman@lrrlaw.com] Sent: Monday, December 14, 2015 12:29 PM To: Holly Gregory; 'Steve DelBianco' Cc: gregshatanipc@gmail.com; 'Phil Corwin'; cwilson@21cf.com; Rosemary E. Fei; Thomas Rickert; ipc_accountabilityct@icann.org; 'Gomes, Chuck' (cgomes@verisign.com); Rosemary E. Fei; Sidley ICANN CCWG; ICANN-Adler; accountability-cross-community@icann.org Subject: RE: CCWG - ACCT - Recommendation 4 - Community Powers 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 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 AAikman@lrrlaw.com | www.LRRLaw.com <http://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 holly.gregory@sidley.com From: Aikman-Scalese, Anne [mailto:AAikman@lrrlaw.com] Sent: Monday, December 14, 2015 3:03 PM To: Gregory, Holly; '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) Subject: RE: CCWG - ACCT - Recommendation 4 - Community Powers Holly – I would tend to agree if in fact the SO or AC could 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 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 AAikman@lrrlaw.com | www.LRRLaw.com <https://urldefense.proofpoint.com/v2/url?u=http-3A__www.lrrlaw.com_&d=CwMGaQ...> From: Gregory, Holly [mailto:holly.gregory@sidley.com] Sent: Monday, December 14, 2015 12:43 PM To: Aikman-Scalese, Anne; 'Steve DelBianco' Cc: gregshatanipc@gmail.com; 'Phil Corwin'; cwilson@21cf.com; Rosemary Fei (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 indemnification 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 holly.gregory@sidley.com f the intended recipients, and is covered by the Electronic Communications Privacy Act, 18 U.S.C. §2510-2521. _____ This message and any attachments are intended only for the use of the individual or entity to which they are addressed. If the reader of this message or an attachment is not the intended recipient or the employee or agent responsible for delivering the message or attachment to the intended recipient you are hereby notified that any dissemination, distribution or copying of this message or any attachment is strictly prohibited. If you have received this communication in error, please notify us immediately by replying to the sender. The information transmitted in this message and any attachments may be privileged, is intended only for the personal and confidential use of the intended recipients, and is covered by the Electronic Communications Privacy Act, 18 U.S.C. §2510-2521.
participants (7)
-
Aikman-Scalese, Anne -
Greg Shatan -
Gregory, Holly -
Mathieu Weill -
Mueller, Milton L -
Nigel Roberts -
Rosemary E. Fei