Auerbach v. ICANN - The Lawsuit
Date: Monday March 18 2002, @08:06AM
Topic: Lawsuits and Judicial Decisions

After putting up with more than a year of stalling, ICANN's At-Large Representative for Canada and the United States today filed suit against ICANN in California Superior Court seeking to get full access to its financial records. California law creates for directors of non-profit corporations an "absolute right at any reasonable time to inspect and copy all books, records and documents of any kind"; ICANN CEO Stuart Lynn sought, amidst an amazing series of delaying tactics, to impose all sorts of extraneous conditions on this right.

The right of directors to inform themselves is an essential element of corporate governance; the failure of directors to take this duty seriously is often cited as one of the prime causes of the Enron debacle. One really has to wonder what it is ICANN has to hide here. Not to mention once again appreciating the irony of the start of Article III of the ICANN By-laws: "The Corporation and its subordinate entities shall operate to the maximum extent feasible in an open and transparent manner and consistent with procedures designed to ensure fairness."

The EFF has put up a web page which promises to have documents relating to the case, but at this moment not all the links resolve. Meanwhile, you can read the full text of the EFF press release below. Full text of the "Petition for Writ of Mandate to Compel Inspection and Copying of Books, Records and Documents" at (.pdf)--and it's well worth reading for its tale of cunctation and obfuscation by the ICANN staff. EFF does have up its copy of ICANN's supposed Procedures for Directory Inspection of Records and Properties (.pdf).

EFF Press Release:

Director Sues Organization that Oversees Internet

ICANN Broke Law, Refused to Disclose Documents

Los Angeles - The Electronic Frontier Foundation today helped a member of the ICANN Board of Directors file a lawsuit forcing ICANN management to grant him some reasonable access to corporate records.

Karl Auerbach, the North American Elected Director of the Internet Corporation for Assigned Names and Numbers (ICANN) began asking for corporate records in December 2000, shortly after he was elected to the Board. ICANN management dragged its feet for nine months, then issued a new "policy" -- never brought before the Board for discussion or vote -- requiring Auerbach to sign a non-disclosure agreement that placed Auerbach's ability to discuss the records at the discretion of ICANN management.

"California nonprofit law requires a corporation to provide its directors the information required to make informed and intelligent decisions," said Auerbach. "ICANN management has denied me the tools I need to exercise independent judgment and fulfill my duties as a director."

"Directors, not management, have the ultimate responsibility and authority to oversee the operations of a corporation like ICANN," explained Auerbach's attorney James Tyre. "ICANN staff's arbitrary and changing policy regarding access to corporate records is not only disturbing, but unlawful in the state of California."

"The Electronic Frontier Foundation finds ICANN management's apparent abuse of power disturbing," added EFF Legal Director Cindy Cohn. "The Internet community relies on well-informed ICANN directors like Mr. Auerbach to administer the corporation appropriately."

Because ICANN is a non-profit California corporation, the organization must comply with a California statute giving any director of the corporation an "absolute right" to inspect and copy corporate records.

In addition, ICANN's bylaws provide that: "Every Director shall have the right at any reasonable time to inspect and copy all books, records and documents of every kind, and to inspect the physical properties of the Corporation. The Corporation shall establish reasonable procedures to protect against the inappropriate disclosure of confidential information."

For documents related to the Auerbach v ICANN case:

For this release: 20020318_eff_icann_pr.html

ICANN Articles of Incorporation:

ICANN Bylaws:

About EFF:

The Electronic Frontier Foundation is the leading civil liberties organization working to protect rights in the digital world. Founded in 1990, EFF actively encourages and challenges industry and government to support free expression, privacy, and openness in the information society. EFF is a member-supported organization and maintains one of the most-linked-to websites in the world at

Incidentally, this item inaugurates a new IANNWatch 'topic' on "lawsuits and judicial decisions," one I suspect that will get quite a bit of use. The graphic at the top is a small section of Hammurabi's laws.

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Re: Auerbach v. ICANN - The Lawsuit
by PeterBarron ( on Monday March 18 2002, @08:47AM (#5368)
User #3240 Info |
About time.

I have often thought that there must be some serious skeletons in the closet at ICANN, and that it would take a lawsuit's discovery phase to uncover them. Thankfully, in this case, the relief being requested are those documents in the first place.

Now, perhaps, we'll find out how ICANN spent the millions from the rigged TLD application process.

Now, perhaps, we'll find out how much ICANN has spent on expensive trips.

Now, perhaps, we'll find out how much ICANN has given JDRP.

Now, perhaps, we'll find out how ICANN's accounting has been cooked.
[ Reply to This | Parent ]
Re: Auerbach v. ICANN - The Lawsuit
by fnord ( on Monday March 18 2002, @10:25AM (#5372)
User #2810 Info
Coverage from Reuters, Newsbytes, ZDNet. Earlier coverage on ICANNWatch of Karl's attempts to see the records. -g
[ Reply to This | Parent ]
Re: Auerbach v. ICANN - The Lawsuit
by alan on Monday March 18 2002, @01:18PM (#5377)
User #2877 Info
This is a wonderful illustration of why we need independently elected At-Large representatives. Thank you Karl!
[ Reply to This | Parent ]
Re: Auerbach v. ICANN - The Lawsuit
by fnord ( on Monday March 18 2002, @09:29PM (#5385)
User #2810 Info
Michael writes:
ICANN CEO Stuart Lynn sought, amidst an amazing series of delaying tactics, to impose all sorts of extraneous conditions on this right.
While I don't doubt this is true as far as it goes, I think there's more to the story. Karl says he's been asking for the records since December 2000, M. Stuart Lynn didn't join ICANN until mid-March 2001. It may be a mistake to ascribe too much of this to Lynn, just as it may be a mistake to think Lynn's roadmap to reform plan is wholly the work of its putative author.

I think Lynn was hired largely because he has that hail fellow well met suave affability so well inculcated by the British public school system (in which, as with ICANN Newspeak, public means private). He is the gladhanding point man, but what he is selling comes from Joe Sims, Louis Touton, and a few of the unelected Board members (BTW, does anyone know who was on the hiring committee that chose Lynn?). However, this also means he can be used as the fall guy if it looks like the whole house of cards is about to collapse, or knocked over as Dave Farber, Peter Neumann and Lauren Weinstein have just suggested. Putting too much blame on Lynn just means the existing jokers will be shuffled around and redealt to us as a new hand. -g

[ Reply to This | Parent ]
Re: ? v. ICANN - The Lawsuit(s)
by ANNODOMINI2000 (reversethis-{KU.OC.OOHAY} {ta} {D0002DA}) on Saturday June 08 2002, @09:39PM (#7020)
User #3359 Info |
Karl Auerbach is, from what I have read, a right-on kinda guy who stands up for the common people and 'small man' when people abuse their rights and are clearly and evidently biased in favo(u)r of big business (specifically, corporate America.)

We (specifically myself as the representative of ANNO DOMINI 2000) are also now suing ICANN, as well as the National Arbitration Forum, UDRP Case Panel (for blatant failure to either endorse or police their own Rules and Policies) and also America Online (USA), Incorporated (for trademark abuse and anti-competitive practice.)

Good luck Karl!

Together we can change ICANN drastically, but we must stick together to fight for radical changes, or else we must insist that ICANN is replaced with a Democratic, Fair, Non-Profit, Internet-User based organisation...
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