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    Lawsuits and Judicial Decisions Why Did ICANN Do It?
    posted by michael on Monday July 29 2002, @04:33PM

    ICANN has done a lot of things I thought were mistaken, some I thought were really stupid, and a few that I thought were downright nasty, but only one that appeared to defy all logic: spending thousands, probably tens of thousands, of dollars fighting to keep a member of the Board of Directors from seeing basic corporate documents. Today, a California court issued its tentative ruling (.pdf) ordering that Karl Auerbach be given the documents he sought, and forthwith. This outcome is not a great surprise, although it remains surprising that this case should have to be tried at all.

    As I've noted before, on the surface, ICANN's decision to fight this case made absolutely no sense. California statute law was pretty clear: the director's right to view documents is "absolute". True, there weren't a lot of cases, because corporations are not usually this stupid, and in a couple where the director was out to steal corporate info in order to benefit a rival, the court found an exception. That didn't seem to have much to do with this case. Why fight? What could be worth it?



    According to Vint Cerf when I asked him about the case at INET 2002, (a) it was a matter "of principle" (although from the way he was shouting at me, the principle seemed more that one shouldn't talk back to Cerf than anything else) and (b) ICANN's lawyers advised fighting. I've always thought that was terrible advice. Advice bad enough to make you fire your lawyer if you have any sense. But leave that aside.

    Even if ICANN's lawyers were right about the law, the lawsuit seemed strategically stupid. What could ICANN have to hide that was worth thousands of dollars? And that would justify the bad public relations if ICANN lost? Or was this a reflexive move driven simply by hatred of Karl Auerbach, the director who refused to play nice? Is ICANN that petty? It seems hard to believe. But the alternatives are even more peculiar.

    The bottom line is this: Either ICANN has nothing to hide, in which case it just spent a fortune on spite and bad publicity on a case that no unbiased observer could have thought was an easy win for ICANN. Or ICANN's legal advisers are out to milk it for every dime, and the Board lacks the spine or the time (these guys do *not* lack the brains) to overrule the lawyers on strategic grounds when they give patently silly advice. Or ICANN (or its lawyers) has a dark secret or two in the vault. It's very hard to know which of these alternatives is the most probable, but I can't see any others. The funny thing is, if there is a skeleton in the closet, we may never know, since the same California law that requires Auerbach see the documents may impose an ethical obligation on him to keep his lips lips sealed if disclosure would harm the corporation.

    Those of ICANN's directors who are neither US citizens nor lawyers have a partial excuse for going along with this insanity, as they were urged to do so by their US lawyers. Perhaps they can't morally be expected to lead a move to overrule their counselors (although in fact the law holds all directors to the same legal standard of care). On the other hand, the US Board members, and a certain Canadian lawyer, have no excuse at all for going along with this -- unless of course they know they have something to hide.

    Even if Karl Auerbach is never able to tell us what he finds in ICANN's records, or even if there is nothing there to find, this case tells us something important about how ICANN discharges its responsibilites to be "transparent" and to be a good steward of its resources. And it's not pretty. Nancy Victory, this ball is in your court.

     
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    This discussion has been archived. No new comments can be posted.
    Why Did ICANN Do It? | Log in/Create an Account | Top | 24 comments | Search Discussion
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    Re: Why Did ICANN Do It?
    by Consumernet on Monday July 29 2002, @06:16PM (#8200)
    User #2897 Info
    ICANN posted their new realease and then quick posted their "reform update" above it.

    The "reform" project is being run by the person who set up ICANN to begin with as a government employee. Now she has left the governement and is being paid to "reform" the same system she set up. Nice job Becky Burr! You DC lawyers are so resourceful. So how much are they paying you (back) for this?

    Maybe Nancy Victory can run the next "reform" system in a couple of years?

    Hey Jeff Neumann ... are you still promoting illegal crimnal lotteries or are you too busy reforming ICANN?
    [ Reply to This | Parent ]
    Re: Why Did ICANN Do It?
    by Hendrik on Tuesday July 30 2002, @07:37AM (#8218)
    User #2856 Info
    Somehow,

    This smells as a Pyrrhus victory to me.
    [ Reply to This | Parent ]
    Re: Why Did ICANN Do It?
    by fnord (groy2kNO@SPAMyahoo.com) on Monday July 29 2002, @07:14PM (#8203)
    User #2810 Info
    Perhaps California has a whistleblower law. If not, this may be a good example for why it should. But I also have a question for Michael or other legal minds. Once Karl leaves office, is he not then free (or at least freer) to disclose what he knows? He no longer has any fiduciary responsibility. I mean it's not like he can still be some kind of member because there ain't no such thing. Hmmm, mebbe they better extend his term.

    Declan McCullagh's Politech list has some coverage, including a
    link to the ruling in HTML format.

    I hope the Cavebear sleeps well tonight, he's earned it, and I don't envy him the work ahead. -g

    [ Reply to This | Parent ]
    Re: More Questions Than Answers
    by fnord (groy2kNO@SPAMyahoo.com) on Tuesday July 30 2002, @07:48AM (#8219)
    User #2810 Info
    Perhaps someone can help me out here. I distinctly recall one BoD member (possibly the departed Philip Davidson) being quoted in the press a few months ago regarding this that he had signed the agreement and seen the records. Ah yes, here we go. Philip Davidson, who was one of the Audit Committee members, actually its Chair, that denied Karl access (I've submitted an article to ICANNWatch regarding that that hasn't appeared), was quoted in an ICANN announcement last March 19:
    I cannot understand for the life of me why Karl would object to affirming his willingness to keep these records confidential, I followed the procedures myself and had full access to all of the records with no hindrance whatsoever.
    So are we to take it from that that he never actually used that access? I find it extremely hard to believe that no BoD member, particularily those serving on the Finance Committee, ever accessed the records. Presumably they do get to see some records if the staff and outside interests allow it. Note also that the announcement spins it that the Audit Committee is made up of three independent Directors. Independent of what? They seem to be incapable of independent thought. If if is true that the BoD has never actually accessed the records then the BoD is even more of a rubber stamp for the staff and outside interests than it normally appears to be. How can anything these people say or decide (former Chair Esther Dyson for example) be taken seriously if they never managed to get into that level of detail? Scary.

    There's discussion over at slashdot, and Karl tells Reuters that he will look for records that showed conflicts of interest, improper expenditures, or evidence of other misconduct. Why did no other BoD member ever do this? Because they thought they knew what they would find, or because they didn't want to know? -g

    [ Reply to This | Parent ]
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