Re: Incorporating DNSO?

Joop Teernstra (terastra@terabytz.co.nz)
Thu, 24 Dec 1998 13:45:38 +1200


At 01:04 23/12/98 -0800, Kent Crispin wrote:
<snip>
>We discussed this somewhat in Monterrey (the appropriate size of a
>legal defense monetary reserve). One possibility is to have a very
>large reserve -- that increases the likelihood you will be sued. The
>other extreme is to have no legal reserve, and just let the
>corporation fold if it is sued.
>
>The fact is that there isn't anything real-time about the DNSO -- it
>could flicker out of existence for a month or two, a new group could
>be formed, using essentially the same corporate documents, ICANN
>could approve the application, and be back at work within 90 days.
>[Supposing that the particular legal storm didn't also destroy
>ICANN.]
>
>That is, there is no need for the DNSO corporation to protect itself;
>just its members.
>
Hello Kent,

Was this the consensus reached in Monterrey? To minimize the target by not
having a fighting fund? And then fold and re-constitute? It does have the
somewhat sleazy appearance of a company going bankrupt and re-forming with
the same shareholders a week later.

>The situation with ICANN is different, however, because it needs to
>protect itself, if its management of its piece of the Internet is to
>meet reasonable standards of stability.
>
Yes, one would think so.

>[...]
>
>> Amadeu, you have touched upon something fundamental. Governance and
>> avoiding liability for decisions does not go together very well.
>
>In the US most governmental agencies cannot be sued, and I think
>similar situations exist in most civilized countries. There are
>*very* good reasons that regulatory agencies cannot be sued -- they
>very frequently *must* make unpopular decisions. If the government
>could be sued, every thin dime of tax money would be spent in
>defending against suits.

Are you comparing the DNSO with an executive branch of a government? A
regulatory agency?
The latest ICANN pronouncement from on high seems to see it as a policy
advisory body.

Depending on the decisionmaking that follows, I do not quite see how
members of a merely advisory body can incur civil liabilities by making
unpopular "decisions."
Perhaps ICANN's latest change of hart has made this whole point moot.

If they U-turn again we can revisit this point. :-(
>
>> Politicians' heads have to be rollable.
>>
>> The ICANN bylaws are centered around avoiding liability and the new
>> "instructions" for the SO applications make it even clearer.
>> There must be such a thing as political accountability or you will invite
>> revolt.
>
>Confusing political accountability with civil liability would be a
>profoundly terrible mistake for us to make.

Agreed. My post brought up both. They should not be confused. However,
legitimacy of governance rests on wide acceptance.

It is an unfortunate
>reality that there are genuinely conflicting points of view involved.
>That means that there will *always* be some unhappy people. If the
>DNSO/ICANN have no shield against lawsuits they will be completely
>and utterly paralyzed -- and then they will be sued for not doing
>anything. Without liability shields that means that each individual
>member of the DNSO is personally liable.
>

Since you are talking about DNSO/ICANN as a policymaking body you may as
well address both the political accountability issue and the civil
liability issue.
You address only the latter. If the DNSO is to have a political role, this
is improper.

>> If ICANN wants to lay the responsibility for policymaking with the DNSO,
>> then the DNSO's prime defense against all action should be the will of the
>> majority of the Internet stakeholder community.
>
>The will of a majority of Internet stakeholders is absolutely
>worthless as a legal defense. And you will need real dollars to pay
>your defense lawyers. Suppose *everybody* but NSI wants a certain
>policy. NSI claims that policy would damage its business, and sues
>ICANN and DNSO. If ICANN/DNSO ignore the suit, NSI will get a
>summary judgement. If they fight the suit, it costs significant
>money. The suit will be decided on the basis of the relevant laws,
>not the will of the majority.
>

O.K. I see what you mean. Let me rephrase what I mean. NSI or any other
party may claim that ICANN/DNSO policy damages it's business, but that in
itself would not give rise to a civil liability. A suit can be fought with
confidence, if ICANN/DNSO would have a legitimate mandate to formulate such
policy.
If the outcome of the suit would be that predictable, it is not likely that
it would be brought in the first place.

>> The courts in all reputable jurisdictions will recognise this, if the
>> bylaws of the DNSO reflect a fair democracy.
>
>The bylaws of ICANN only are at issue if the California Attorney
>General brings suit against the corporation for not meeting the
>standards of a California non-profit. You as an individual can't sue
>ICANN because ICANN doesn't follow its bylaws; you can only sue ICANN
>if ICANN causes you some damage.
>
>You don't sue General Motors because their bylaws say that they
>should produce good cars -- you sue them because you were damaged by
>their actions. The bylaws of General Motors are almost totally
>immaterial in such a suit.
>
An example of damage would be a deletion of a Domain from the database
based on policy.
Because ICANN/DNSO are not in the business of producing cars, but of DNS
governance, the bylaws *are* of critical importance, also in a civil suit.

>> On the other hand, the present incorporators can be held liable for
>> creating bylaws that could be called a "racket".
>
>In general, no, they can't. The ICANN bylaws could state that the
>ICANN directors personally owned the moon, or that 3 == 5. That
>doesn't make them own the moon, or 3 == 5. The existence of flaws in
>the bylaws doesn't give *anyone* standing to sue the corporation,
>except (in the case of a California Public Benefit Corporation) the
>Attorney General of the State of California.
>
Sorry Kent, I don't agree here. Because of the effective monopoly control
that ICANN will have, liability for both the bylaws and policy goes far
beyond AG oversight. IMHO.

It all depends how the "governance" works out in practice.

--Joop--
http://www.democracy.org.nz/