Re: [CCWG-ACCT] A contractual solution for the "membership"/accountability problem
Anne, The Sidley memo makes it clear that we do not have clarity on what constitutes a fiduciary duty and what does not. Clearly budget and plan are in the ring. If we had been asking for the power to unilaterally change Bylaws, that, in my mind, would be out of scope. But since we are asking for joint agreement, I think we are ok. Director removal (1 by 1 or en masse seems to be ok, since it is a designator right and the most recent Sidley memo says that we are designators even if the word is not used. So I think we are ok with all but bidget/plan. But to be honest, if we ever have to ditch the board to effect accountability, I think that we will be in a VERY poor position to defend ICANN's position in Internet governance and in overseeing the areas that we are responsible for. There are many forces around that would be delighted to see us break down in internal battles. As I said in an earlier message, a superbly accountable ICANN that no longer has any responsibility is not particularly attractive to me. Alan At 13/10/2015 06:41 PM, Aikman-Scalese, Anne wrote:
P.S. to Alan: my understanding is that the member model is the only way to relieve the Board of fiduciary responsibility as to retained community powers.
Now it appears that under the CA statute, the proposal for binding arbitration as to issues proposed for community enforceability would violate that fiduciary duty. In other words, in the current corporate structure, the Board cannot properly delegate any of the decisions listed in the community powers in Items 1-6 in the Plan B chart from this morning's call to an arbitration panel (except maybe removal of directors for cause?.) Perhaps this was abundantly clear to everyone else but me? Steve and Jonathan?
This makes me wonder whether the Board's MEM proposal was reviewed for compliance with CA law by Jones Day. I don't recall the Board stating the MEM proposal and the binding arbitration mechanism would not apply to budget and strategic plan but maybe they already said that. So again, how does that fit with the Final Report of the CWG-Stewardship?
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
-----Original Message----- From: Alan Greenberg [mailto:alan.greenberg@mcgill.ca] Sent: Tuesday, October 13, 2015 3:18 PM To: Aikman-Scalese, Anne; David Post; Accountability Cross Community Subject: RE: [CCWG-ACCT] A contractual solution for the "membership"/accountability problem
Yes I read it. It does say that the line is unclear, but that certain responsibilities cannot be delegated including budget and strategic. Plan. Our lawyers have been clear for a long time that budget and plan veto are problematic in a non-member situation. And that matches the Board's position that to give this up impacts their fiduciary duty (and I agree).
The ALAC has said it would reluctantly accept the member model, but it is not our preference, and that implies we are willing to forego the budget/plan veto.
Alan
At 13/10/2015 05:45 PM, Aikman-Scalese, Anne wrote:
Alan, did you read the Sidley memo Mathieu circulated that says the in the current corporate structure, the ICANN Board cannot delegate decision-making in relation to the corporation to any third party, including via binding arbitration? This is on page 2 of the Appendix. Wouldn't that also impact a contract theory where decision-making in relation to budget/plan veto is delegated via contract to the party on the other side of the contract? 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 -----Original Message----- From: accountability-cross-community-bounces@icann.org [mailto:accountability-cross-community-bounces@icann.org] On Behalf Of Alan Greenberg Sent: Tuesday, October 13, 2015 1:36 PM To: David Post; Accountability Cross Community Subject: Re: [CCWG-ACCT] A contractual solution for the "membership"/accountability problem
With the usual "I am not a lawyer disclosure", my understanding is that the Bylaws are effectively a contract. In all of the contructs (whether it is the CMSM, CMSD or (my most recent proposal) CMSanything, there is an UA composed of the AC/SO (or a subset), or in the earlier models multiple UA, one per AC/SO. In the Board proposal, since I do not believe that the AC/SO Chairs are willing to assume responsibility for taking actions personally (nor should they be expected to), there would also have to be an UA formed to act on behalf of the AC/SOs. As I understand it, the UA would have to exist at the time the of the violation or act that it was complaining about, so that really implies it would have to exist at the start (since one cannot predict when trouble will arise.
So in my mind, the CMSx, the Board proposal, and your new one all really have a common construct of a UA acting on behalf of the AC/SOs. The differences are in how the "contract" or the Bylaws allow the UA to act.
The recent legal briefing on our current model (ie in the Bylaws today) says that although the AC/SOs and NomCom that appoint board members are not called designators, for all intents, they are. The new constructs (any of them) would allow the AC/SOs or a subset to exercise the powers other than appointment of directors. We have been told (by CCWG lawyers) that these powers are enforceable (other than budget/plan veto).
From a practical point of view, I think that all of the proposals are in fact very close to each other, but the different terminology and in some cases, a lack of precision masks that similarity.
Alan
At 13/10/2015 04:08 PM, David Post wrote:
To all:
David Johnson and I have been developing an idea that might be able to break the impasse between the Board and the stakeholders regarding the membership model as a vehicle for community control over the Board's actions. Here's David's description of the overall idea:
ICANN Accountability  Back to Contract
There is broad agreement that the community powers recommended by the CCWG should be "enforceable"?. The proposal assumes that the Unincorporated Association that would enforce them would have to be created by, and made the sole "member"? of ICANN, by means of an amendment to ICANN's bylaws. Only the Board can amend the bylaws, and they do not want to create a member. This would appear to create an unresolvable stalemate. Until one recalls the scene from Indiana Jones when, treated by a knife twirling thug, the hero remembers that he has a gun and uses it.
As CCWG's counsel have noted, an unincorporated association can be formed by any group with the requisite intent, with minimal formality. So the community UA, consisting of and acting only at the direction of the SOs and ACs that make up the ICANN community, could be formed directly by the actions of that community. The UA, now a legal person, could enter into contracts (using whatever decision-making process is provided in the UA's own bylaws). It could, for example, make an offer to enter into a contract with ICANN itself. Such a contract might provide that ICANN would promise to adopt and abide by a specified set of bylaws (notably, those providing for community powers and an enhanced IRP). The contract could provide for specific performance and dispute resolution (not unlike the MEM, but with the group doing the "enforcing"? having been formed in advance of any bylaw violation). The contract could make individual SOs and ACs, or even subcomponents of these, into third party beneficiaries entitled to enforce the contractual promises as against the ICANN corporation. In light of these commitments, the community UA could itself then promise to give its collective approval to the IANA transition.
ICANN's Board would still need to agree to any such contract, to make it binding. But the Board would no longer have an objection based on supposed dangers of creating a "member"?. It has said it agrees that the proposed community powers should be enforceable, and that IRP decisions enforcing revised bylaws and mission statement should be binding. The CCWG can reach its own consensus on what contractual terms (what draft bylaws to include by reference and what community decision-making process to use regarding decisions to offer and enforce the contract). It would be difficult for the Board to refuse to sign such a contract  once supported and offered by an Unincorporated Association consisting of the community and acting with requisite consensus).
The community only supported "membership"? because this was thought to be the only way to make the proposed community powers enforceable against a reluctant ICANN board. If there is another way to accomplish enforceability, while avoiding the Board's objections to "structural change"? of ICANN itself, that should be acceptable. That "other way" is to enter into a contract under which ICANN promises to adopt and comply with specified bylaws and to establish a binding IRP. Because there won't be a binding IRP to enforce a duty to create a binding IRP, the registry constituency has already suggested that there be a contract that requires ICANN to follow through on that promise. This suggestion just applies the same principle to the entire community and all of the proposed community powers. It's time for ccwg to start drafting contract terms.
***********************************************
Here's a rough outline of the logistics of how this would work:
Acting by consensus resolution, SOs and ACs would form an unincorporated association. This would include writing bylaws regarding decision-making process for the UA (action solely at direction of consensus of SOs/ACs?) As its first act, the UA would offer ICANN a contract with the following terms.
1. ICANN would agree to adopt and abide by a specified set of bylaws (which would be attached as an exhibit to the contract) that set forth community powers and establishment of binding IRP.
2. The contract would have a term coterminous with ICANN's existence and could not be cancelled. (no expiration date and no grounds for termination by ICANN)
3. The contract would call for specific performance.
4. Disputes would be resolved by the IRP, and would be binding on ICANN (even if ICANN chose not to appear before the panel).
5. In addition to the UA itself, Any two SOs or ACs, acting by internal consensus, could bring a case to enforce the provisions, and ICANN would pay the costs of such a case.
6. The contract would name as third party beneficiaries any Individual SO/AC, sub constituencies and any parties materially harmed by breach of the agreement - providing that these third parties could also bring a case to enforce the agreement, at their own expense, with costs allocated by the IRP).
7. ICANN would promise that, in the event the terms of the contract could not be enforced in the absence of a "membership" structure, it would recognize the UA as a member under California law.
8. ICANN would warrant that it has the authority to enter into the agreement and agree that it will not assert in the future that compliance with the contract would be prevented by any claimed conflict between the contract and the ability of the Board to exercise its fiduciary duties.
9. The UA would agree, in light of these ICANN promises, to support the transition (treating ICANN as the steward of the IANA function and as the source of policy for dns absent any ability of US Government to take that role away).
Obviously, there are still some unresolved details regarding what the bylaws would say (e.g., re community oversight of budget). These would have to be resolved.
David ******************************* David G Post - Senior Fellow, Open Technology Institute/New America Foundation blog (Volokh Conspiracy) http://www.washingtonpost.com/people/david-post book (Jefferson's Moose) http://tinyurl.com/c327w2n music http://tinyurl.com/davidpostmusic publications etc. http://www.davidpost.com *******************************
******************************* David G Post - Senior Fellow, Open Technology Institute/New America Foundation blog (Volokh Conspiracy) http://www.washingtonpost.com/people/david-post book (Jefferson's Moose) http://tinyurl.com/c327w2n music http://tinyurl.com/davidpostmusic publications etc. http://www.davidpost.com ******************************* _______________________________________________ Accountability-Cross-Community mailing list Accountability-Cross-Community@icann.org https://mm.icann.org/mailman/listinfo/accountability-cross-community
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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.
Thanks Alan. As I read the Sidley memo, budget and operating/strategic plan involve the exercise of fiduciary duty by the Board and cannot be delegated, in a dispute with the Community and in an exercise of Community Enforcement, to a determination by an arbitration panel. In other words, the Board cannot let a third party determine its fiduciary duty with respect to these "core" matters. Again, that makes me wonder if the MEM proposal was reviewed by Jones Day for compliance with California law. I think we HAVE to know the answer to this before we spend tons of time devoted to analyzing it in comparison to other models in the Plan B chart Steve proposed. 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 -----Original Message----- From: Alan Greenberg [mailto:alan.greenberg@mcgill.ca] Sent: Tuesday, October 13, 2015 4:17 PM To: Aikman-Scalese, Anne; David Post; Accountability Cross Community Subject: RE: [CCWG-ACCT] A contractual solution for the "membership"/accountability problem Anne, The Sidley memo makes it clear that we do not have clarity on what constitutes a fiduciary duty and what does not. Clearly budget and plan are in the ring. If we had been asking for the power to unilaterally change Bylaws, that, in my mind, would be out of scope. But since we are asking for joint agreement, I think we are ok. Director removal (1 by 1 or en masse seems to be ok, since it is a designator right and the most recent Sidley memo says that we are designators even if the word is not used. So I think we are ok with all but bidget/plan. But to be honest, if we ever have to ditch the board to effect accountability, I think that we will be in a VERY poor position to defend ICANN's position in Internet governance and in overseeing the areas that we are responsible for. There are many forces around that would be delighted to see us break down in internal battles. As I said in an earlier message, a superbly accountable ICANN that no longer has any responsibility is not particularly attractive to me. Alan At 13/10/2015 06:41 PM, Aikman-Scalese, Anne wrote:
P.S. to Alan: my understanding is that the member model is the only way to relieve the Board of fiduciary responsibility as to retained community powers.
Now it appears that under the CA statute, the proposal for binding arbitration as to issues proposed for community enforceability would violate that fiduciary duty. In other words, in the current corporate structure, the Board cannot properly delegate any of the decisions listed in the community powers in Items 1-6 in the Plan B chart from this morning's call to an arbitration panel (except maybe removal of directors for cause?.) Perhaps this was abundantly clear to everyone else but me? Steve and Jonathan?
This makes me wonder whether the Board's MEM proposal was reviewed for compliance with CA law by Jones Day. I don't recall the Board stating the MEM proposal and the binding arbitration mechanism would not apply to budget and strategic plan but maybe they already said that. So again, how does that fit with the Final Report of the CWG-Stewardship?
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
-----Original Message----- From: Alan Greenberg [mailto:alan.greenberg@mcgill.ca] Sent: Tuesday, October 13, 2015 3:18 PM To: Aikman-Scalese, Anne; David Post; Accountability Cross Community Subject: RE: [CCWG-ACCT] A contractual solution for the "membership"/accountability problem
Yes I read it. It does say that the line is unclear, but that certain responsibilities cannot be delegated including budget and strategic. Plan. Our lawyers have been clear for a long time that budget and plan veto are problematic in a non-member situation. And that matches the Board's position that to give this up impacts their fiduciary duty (and I agree).
The ALAC has said it would reluctantly accept the member model, but it is not our preference, and that implies we are willing to forego the budget/plan veto.
Alan
At 13/10/2015 05:45 PM, Aikman-Scalese, Anne wrote:
Alan, did you read the Sidley memo Mathieu circulated that says the in the current corporate structure, the ICANN Board cannot delegate decision-making in relation to the corporation to any third party, including via binding arbitration? This is on page 2 of the Appendix. Wouldn't that also impact a contract theory where decision-making in relation to budget/plan veto is delegated via contract to the party on the other side of the contract? 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 -----Original Message----- From: accountability-cross-community-bounces@icann.org [mailto:accountability-cross-community-bounces@icann.org] On Behalf Of Alan Greenberg Sent: Tuesday, October 13, 2015 1:36 PM To: David Post; Accountability Cross Community Subject: Re: [CCWG-ACCT] A contractual solution for the "membership"/accountability problem
With the usual "I am not a lawyer disclosure", my understanding is that the Bylaws are effectively a contract. In all of the contructs (whether it is the CMSM, CMSD or (my most recent proposal) CMSanything, there is an UA composed of the AC/SO (or a subset), or in the earlier models multiple UA, one per AC/SO. In the Board proposal, since I do not believe that the AC/SO Chairs are willing to assume responsibility for taking actions personally (nor should they be expected to), there would also have to be an UA formed to act on behalf of the AC/SOs. As I understand it, the UA would have to exist at the time the of the violation or act that it was complaining about, so that really implies it would have to exist at the start (since one cannot predict when trouble will arise.
So in my mind, the CMSx, the Board proposal, and your new one all really have a common construct of a UA acting on behalf of the AC/SOs. The differences are in how the "contract" or the Bylaws allow the UA to act.
The recent legal briefing on our current model (ie in the Bylaws today) says that although the AC/SOs and NomCom that appoint board members are not called designators, for all intents, they are. The new constructs (any of them) would allow the AC/SOs or a subset to exercise the powers other than appointment of directors. We have been told (by CCWG lawyers) that these powers are enforceable (other than budget/plan veto).
From a practical point of view, I think that all of the proposals are in fact very close to each other, but the different terminology and in some cases, a lack of precision masks that similarity.
Alan
At 13/10/2015 04:08 PM, David Post wrote:
To all:
David Johnson and I have been developing an idea that might be able to break the impasse between the Board and the stakeholders regarding the membership model as a vehicle for community control over the Board's actions. Here's David's description of the overall idea:
ICANN Accountability  Back to Contract
There is broad agreement that the community powers recommended by the CCWG should be "enforceable"?. The proposal assumes that the Unincorporated Association that would enforce them would have to be created by, and made the sole "member"? of ICANN, by means of an amendment to ICANN's bylaws. Only the Board can amend the bylaws, and they do not want to create a member. This would appear to create an unresolvable stalemate. Until one recalls the scene from Indiana Jones when, treated by a knife twirling thug, the hero remembers that he has a gun and uses it.
As CCWG's counsel have noted, an unincorporated association can be formed by any group with the requisite intent, with minimal formality. So the community UA, consisting of and acting only at the direction of the SOs and ACs that make up the ICANN community, could be formed directly by the actions of that community. The UA, now a legal person, could enter into contracts (using whatever decision-making process is provided in the UA's own bylaws). It could, for example, make an offer to enter into a contract with ICANN itself. Such a contract might provide that ICANN would promise to adopt and abide by a specified set of bylaws (notably, those providing for community powers and an enhanced IRP). The contract could provide for specific performance and dispute resolution (not unlike the MEM, but with the group doing the "enforcing"? having been formed in advance of any bylaw violation). The contract could make individual SOs and ACs, or even subcomponents of these, into third party beneficiaries entitled to enforce the contractual promises as against the ICANN corporation. In light of these commitments, the community UA could itself then promise to give its collective approval to the IANA transition.
ICANN's Board would still need to agree to any such contract, to make it binding. But the Board would no longer have an objection based on supposed dangers of creating a "member"?. It has said it agrees that the proposed community powers should be enforceable, and that IRP decisions enforcing revised bylaws and mission statement should be binding. The CCWG can reach its own consensus on what contractual terms (what draft bylaws to include by reference and what community decision-making process to use regarding decisions to offer and enforce the contract). It would be difficult for the Board to refuse to sign such a contract  once supported and offered by an Unincorporated Association consisting of the community and acting with requisite consensus).
The community only supported "membership"? because this was thought to be the only way to make the proposed community powers enforceable against a reluctant ICANN board. If there is another way to accomplish enforceability, while avoiding the Board's objections to "structural change"? of ICANN itself, that should be acceptable. That "other way" is to enter into a contract under which ICANN promises to adopt and comply with specified bylaws and to establish a binding IRP. Because there won't be a binding IRP to enforce a duty to create a binding IRP, the registry constituency has already suggested that there be a contract that requires ICANN to follow through on that promise. This suggestion just applies the same principle to the entire community and all of the proposed community powers. It's time for ccwg to start drafting contract terms.
***********************************************
Here's a rough outline of the logistics of how this would work:
Acting by consensus resolution, SOs and ACs would form an unincorporated association. This would include writing bylaws regarding decision-making process for the UA (action solely at direction of consensus of SOs/ACs?) As its first act, the UA would offer ICANN a contract with the following terms.
1. ICANN would agree to adopt and abide by a specified set of bylaws (which would be attached as an exhibit to the contract) that set forth community powers and establishment of binding IRP.
2. The contract would have a term coterminous with ICANN's existence and could not be cancelled. (no expiration date and no grounds for termination by ICANN)
3. The contract would call for specific performance.
4. Disputes would be resolved by the IRP, and would be binding on ICANN (even if ICANN chose not to appear before the panel).
5. In addition to the UA itself, Any two SOs or ACs, acting by internal consensus, could bring a case to enforce the provisions, and ICANN would pay the costs of such a case.
6. The contract would name as third party beneficiaries any Individual SO/AC, sub constituencies and any parties materially harmed by breach of the agreement - providing that these third parties could also bring a case to enforce the agreement, at their own expense, with costs allocated by the IRP).
7. ICANN would promise that, in the event the terms of the contract could not be enforced in the absence of a "membership" structure, it would recognize the UA as a member under California law.
8. ICANN would warrant that it has the authority to enter into the agreement and agree that it will not assert in the future that compliance with the contract would be prevented by any claimed conflict between the contract and the ability of the Board to exercise its fiduciary duties.
9. The UA would agree, in light of these ICANN promises, to support the transition (treating ICANN as the steward of the IANA function and as the source of policy for dns absent any ability of US Government to take that role away).
Obviously, there are still some unresolved details regarding what the bylaws would say (e.g., re community oversight of budget). These would have to be resolved.
David ******************************* David G Post - Senior Fellow, Open Technology Institute/New America Foundation blog (Volokh Conspiracy) http://www.washingtonpost.com/people/david-post book (Jefferson's Moose) http://tinyurl.com/c327w2n music http://tinyurl.com/davidpostmusic publications etc. http://www.davidpost.com *******************************
******************************* David G Post - Senior Fellow, Open Technology Institute/New America Foundation blog (Volokh Conspiracy) http://www.washingtonpost.com/people/david-post book (Jefferson's Moose) http://tinyurl.com/c327w2n music http://tinyurl.com/davidpostmusic publications etc. http://www.davidpost.com ******************************* _______________________________________________ Accountability-Cross-Community mailing list Accountability-Cross-Community@icann.org https://mm.icann.org/mailman/listinfo/accountability-cross-communit y
_______________________________________________ Accountability-Cross-Community mailing list Accountability-Cross-Community@icann.org https://mm.icann.org/mailman/listinfo/accountability-cross-community
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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.
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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 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.
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