Transcript

Transcript CCWG ACCT LEGAL SubTeam 23 April.doc

Transcript CCWG ACCT LEGAL SubTeam 23 April.pdf

Recording

The Adobe Connect recording is available here:  https://icann.adobeconnect.com/p52927as8xr/

The audio recording is available here:  http://audio.icann.org/gnso/gnso-legal-subteam-23apr15-en.mp3

Notes

These high-level notes are designed to help you navigate through content of the call and do not substitute in any way the transcript.

Leon: Will work through the questions with the legal advisors.

Voting threshold and super majorities.  Can open the door to a tyranny of the masses.  Where a small group can block and issues.

Supermajority typically 66%.  Get to 75% and can open the way to some blocking. Might reach that level for constitutional (type) decisions, but do run a risk.  Need to do math to see what the
risks might be.  And might be in the Articles rather than the bylaws.  Need to figure that out.

Care with abstentions.  If too many abstain then the decision can be made by a very small group

If there is concern about a group like the GAC then they might continue as now without voting rights.

If GAC. for example, made as a member of the organization there is some risk that someone may come to dominate the GAC and therefore capture the process.

Q. Caretaker board in the event of removal of the whole board.  Can a caretaker board be implemented and how implemented.

Need a simultaneous mechanism to put a board in place,  There are ways to hold a board on place, but they are likely to quit.  Can put people in as placeholders, knowing you will run a
selection process later.  This caretaker board has all the powers of the board, they are caretaker in name only.   Removal of a whole board is unusual, and need to think about how under
CA law and other jurisdictions, needs research and not an immediate response. Good new is CA law allows flexibility in how to address this. 

Can it be installed so it allow an uninterrupted operation of ICANN? Some certainty would be helpful when proposing this community power.

Q. Can the SO/AC form unincorporated associations, while maintaining their current status in ICANN?

A. Yes.

And already much of what's needed is in the bylaws.  All advice suggests is needed is a simple article of incorporation that write in the sections from the ICANN bylaws, and they claim status
associated.  And the SO/AC can continue as they had before.  And as a member they could then exercise certain legal rights.

They wouldn't have assets and no actives per se.  The activities would still occur in the ICANN corporation, and these parallel structures would hold the contract rights, etc.

Q. Are there any liabilities associated with unincorporated association over and above what we have now.

Individual members would not be liable (legal advice currently considers), they would be members of the association.   The designators and member organizations are taking specific actions, the
members are not.  Legal advice is that the liability issue is not a concern.

Q. Currently the Board controls many of the features of the various SOAc and of their subcomponents.  Would that still be the case as unincorporated associations can rely on ICANN board governance 

It depends on ICANN board governance.  And thinking through how the new parallel structure might look like.  Current arrangements may not change

Q. Can the SO/AC be dissolved?

It will be protected by the new powers, and it can still dissolve itself.  Can have provisions on the bylaws about the membership that the board couldn't change, but the members could. 
There are some easy to fix concerns.  

International concerns and unincorporated associations.  SO/AC, to want them not to be unincorporated does leave them open to liability as you enhance community powers.  And the use of
unincorporated associations does give additional protections. The bylaws drafted in a way, to provide that ICANN would be indemnifying the organizations, or the individuals acting for
the organizations.  Working to ensure there would be no greater liability than community has today

Q. If SO/AC remove their directors, then NomCom would remove theirs, and this goes to the issue of the NomCom's independence.

Pre-appointment letter would probably work for NomCom.

Community vote: the vote is through the designators or members. 

Comment: The NonCom doesn¹t need to become an unincorporated association to create and unincorporated association.  This would be an alter-ego for the NomCom. 

Deliverables.  Questions as presented during the call.  1, 3, and 4 addressed.  Q 2, counsel need more time to look into, but short answer is the caretaker board can be implemented.  And the rest of the questions will be addressed.  Short answers for each.

END

Action Items

Documents Presented

Chat Transcript

Brenda Brewer: (4/23/2015 17:06) Welcome to the LEGAL SubTeam Meeting #13 on 23 April! Please note that chat sessions are being archived and follow the ICANN Expected Standards of Behavior: http://www.icann.org/en/news/in-focus/accountability/expected-standards 

  Cheryl Langdon-Orr: (17:09) OK  hopefully the AC room will be more stable for me now than it was at the end of the other call...

  Greg Shatan: (17:10) Forget the AC room.  How about our stability?

  Cheryl Langdon-Orr: (17:10) lost long ago my dear L  o  n  g  ago :-)

  David McAuley (RySG): (17:11) hello

  Edward McNicholas, Sidley Austin LLP: (17:12) Hello

  Adam Peake: (17:12) hello everyone

  Ingrid Mittermaier: (17:12) Hello, back on

  Adam Peake: (17:13) his is beginningto sounds like a Monty Python sketch :-)

  Stephanie Petit: (17:13) Hello

  Samantha Eisner: (17:13) I'm not sure what "sleep breaks" you speak of Cheryl!

  arasteh: (17:14) Leon

  Adam Peake: (17:14) I woke up half an hour before I went to sleep :-)_

  arasteh: (17:14) Are you really want to work for two hours?

  Adam Peake: (17:15) 08:00 UTC next starts

  Greg Shatan: (17:15) 4 am New York Time.

  Cheryl Langdon-Orr: (17:17) looking at my calander nex CCWG for me is my 6pm then 11pm  then 0200 tomorrow

  Samantha Eisner: (17:18) There were some questions that I posed on the 15th, I believe, that I'm not sure where to find answers, though the question list identifies them as being answered

  Alice Jansen: (17:18) Here you go, León!

  Leon Sanchez (Co-Chair, ALAC): (17:19) Thanks Alice!

  Greg Shatan: (17:20) Sam,  I think those questions are in the pipeline, but I think they got pushed back at least once....

  Avri Doria: (17:20) do we have legaal issues on nomcom?

  David McAuley (RySG): (17:22) Holly, you're getting the ICANN community cough

  Leon Sanchez (Co-Chair, ALAC): (17:22) @Sam Greg is right. Your questions are still in the pipeline

  Avri Doria: (17:23) sometimes perspective is the difference between tyranny of the minority and minority rights.

  Greg Shatan: (17:25) It may depend on whether you expect to be in the minority....

  Avri Doria: (17:25) always

  Greg Shatan: (17:26) The value of consensus, when it works, is that you work toward not having a minority....

  Avri Doria: (17:26) right avoiding the vote is critical.

  Adam Peake: (17:26) fwiw: ICANN supermajority is 66%, e.g. GNSO pdp.  Removals tend to be 75%, and they are in the bylaws today

  Avri Doria: (17:28) the GNSO voting structure is nut and not an example to follow.

  Samantha Eisner: (17:30) This seems to be an issue of balancing the legal feasibility with issues of which parts of the community should participate in particular decisions

  Alan Greenberg: (17:30) The  reason I raised the issue is that when it was raised before, the immediate reaction was that abstentions count as Nos. Period. There was no consideration of the issue.

  Alan Greenberg: (17:31) I agree that there are ways to address the issue, but only if we choose to consider them.

  Samantha Eisner: (17:31) Agreed, Alan

  David McAuley (RySG): (17:32) Good point Leon

  Adam Peake: (17:33) In our documents talking about board recall we attempt to address the abstention issue as follows:

  Adam Peake: (17:33) The CCWG recommends xx % (e.g. 75% 85%) of all the support available within the community mechanism would have to be cast in favor to implement it. This threshold ensures that non-participation does not lower the threshold required to remove the Board. The CCWG suggests that this should be a directed vote.

  Avri Doria: (17:33) how is this a legal question?  it is a grou[ dynamics question.

  Leon Sanchez (Co-Chair, ALAC): (17:34) exactly

  Leon Sanchez (Co-Chair, ALAC): (17:34) not a legal question

  Michael Clark (Sidley): (17:36) precisely, Leon and Avri

  David McAuley (RySG): (17:37) GAC has a large voice today with liaison

  Greg Shatan: (17:37) @Alan, yes, sorry if I ascribed intent.  not my intention to do so.

  Samantha Eisner: (17:38) RSSAC now appointed by the Board

  Samantha Eisner: (17:38) Both SSAC and RSSAC are appointed based upon SSAC and RSSAC recommendations for membership

  Farzaneh Badii: (17:39) But this is the legal team meeting. It is not a defense session for GAC. I think we should move on

  Michael Clark (Sidley): (17:39) Note from Holly writing on Mike's computer:  We think it would be good to move on. 

  Cheryl Langdon-Orr: (17:39) Abstentions  CAN effectivly end up being a NO vote equivelent

  Greg Shatan: (17:39) In some instances, an abstention is counted as a no vote. Which makes voting a problem.

  Greg Shatan: (17:39) Rather, NOT voting becomes a problem

  Alan Greenberg: (17:39) If the GAC chooses not not vote (just as the GAC does not now participate in the NomCom). AND if we treat not voting as a NO vote (as some people have suggested), then we may have a problem.

  Samantha Eisner: (17:39) How any abstentions are considered are important in identifying community support.  But not a legal issue, agreed.

  Thomas Rickert, Co-Chair: (17:40) Sorry, I do have an audio issue

  Alan Greenberg: (17:40) Agreed. Enought time on it here.

  Avri Doria: (17:44) can the powers of a caretaker board be limited?

  Cheryl Langdon-Orr  -  ALAC APRegional Member: (17:44) Maybe in a Bylaw?

  Robin Gross [GNSO - NCSG]: (17:46) needing community co-approval on some decisions?

  Michael Clark (Sidley): (17:47) Agree with speaker.  Absolutely right

  Stephanie Petit: (17:49) @avri and @robin, I suspect that the same principles we've been discussing apply to the caretaker board as the "typical" board.

  Stephanie Petit: (17:50) So probably hard to limit powers (unless certain powers given to members).

  David McAuley (RySG): (17:50) Thomas - is waiver per vote or permanent?

  David McAuley (RySG): (17:51) Thanks Thomas

  Thomas Rickert, Co-Chair: (17:52) You are most welcome, David!

  Samantha Eisner: (17:53) On powers of caretaker Board, would a limitation such as that imposed on the ICANN executive Committee of the Board be reasonable: The Committee shall not have the authority to adopt, amend or repeal any provision of the Bylaws or take any other action which has been reserved for action by the full Board pursuant to the Bylaws, a resolution of the Board or which the Committee is otherwise prohibited by law to take.

  Samantha Eisner: (17:53) https://www.icann.org/resources/pages/charter-89-2012-02-25-en

  Robin Gross [GNSO - NCSG]: (17:56) where is the line drawn between an individual act or an act by the unincorporated association?

  Avri Doria: (17:56) currently the Board controls many of the features of the various SOAc and of their subcomponents.  Would that still be the case as uninocrproated associations

  Stephanie Petit: (17:57) @Sam, would like to confer with others on your question; I do suspect, however, that the law will regard the caretaker board as *the* Board, so limits as on the Exec comm may not quite work.

  Samantha Eisner: (17:57) @Avri, such as the board approval over charters for Stakeholder Groups, or approval of new constituencies?

  Avri Doria: (17:58) Sam, yes.

  Samantha Eisner: (17:58) @Avri - agree these things need to be considered

  Greg Shatan: (17:59) The liabilities come from the actions not from the form.  You're probably worse off taking an action without the protection of the legal entity.

  Stephanie Petit: (17:59) +1 Greg

  David McAuley (RySG): (17:59) Agree Greg, making Alan's comment "over and above" present state of affairs meaningful

  Greg Shatan: (18:01) Frankly, most of us avoid thinking too hard about what our present liability exposure is....

  Robin Gross [GNSO - NCSG]: (18:01) what about in those international jurisdictions that do not provide protection to UnInc.. Ass.?

  Josh Hofheimer (Sidley): (18:01) +1 Greg.  You bvecome a general partnership

  Robin Gross [GNSO - NCSG]: (18:03) might there be heightened liability in those international jurisdictions?

  Greg Shatan: (18:03) @Robin, if there are such jurisdictions, they would probably treat the SOACs as they currently are.  No worse.

  Leon Sanchez (Co-Chair, ALAC): (18:03) +1 greg

  Leon Sanchez (Co-Chair, ALAC): (18:03) Greg

  Edward Morris: (18:04) +1 Robin. In England unincorporated associations are not legal persons and liability accrues to individuals. It certainly is a concern of mine.

  Greg Shatan: (18:04) But I think there's a real question whether one country's laws will fail to recognize an entity type from another jurisdiction.  The US doesn't have SRLs, or GmbHs or Societe Anonymes....

  Robin Gross [GNSO - NCSG]: (18:04) that would be my presuption also, Greg, but confirmation that we are not creating any additional liability for anyone would be useful.

  Alan Greenberg: (18:04) But "structural improvements" may well be being dissolved.

  Greg Shatan: (18:04) A SOAC would not be a a UK entity at all.

  Leon Sanchez (Co-Chair, ALAC): (18:05) @Robin you've hit the nail into the discussion from my veiw

  Leon Sanchez (Co-Chair, ALAC): (18:05) view

  Greg Shatan: (18:05) Ed, would you suggest the SOACs become non-profit corporations instead?

  Robin Gross [GNSO - NCSG]: (18:06) Greg, but might a UK court want to hold the GNSO members liabile because its gala got out of hand at the London Tower?

  Edward Morris: (18:06) yes

  Edward Morris: (18:06) to Greg.

  Leon Sanchez (Co-Chair, ALAC): (18:06) @Robin GNSO guys are very well behaved

  Greg Shatan: (18:06) Alan, I assume this would be dealt with in an orderly manner.

  Edward Morris: (18:07) Eventually comity would prevail but before a county court...a defined corporation gi

  Samantha Eisner: (18:07) The groups could be part of the Fundamental Bylaws

  Edward Morris: (18:07) gives a bit clearer status everywhere.

  Greg Shatan: (18:08) @Alan, Why would such significant actions take place without other related actions also taking place?

  Samantha Eisner: (18:08) But if there is a determination that the Bylaws change about the definition of who participates in community powers, whether the group still exists outside of ICANN shouldn't really make a difference

  Avri Doria: (18:08) but it would be optional and up to the UA whether they wanted it or not.

  Avri Doria: (18:08) and the subcomponents, e,g, constituencies, would be subject to the SOAC for their identiy and not to the Board that chartered them.  interesting set of changes.

  Greg Shatan: (18:09) @Robin, under your hypothetical, what happens if the GNSO gala gets out of hand?

  Greg Shatan: (18:09) RIght now?

  Robin Gross [GNSO - NCSG]: (18:09) ICANN Corp. is on the hook

  Greg Shatan: (18:10) And they could turn around and come after the individuals that caused the problem...

  Greg Shatan: (18:10) Let's hopee that a bottoms-up multi-steakholder event never gets out of hand!!!

  Avri Doria: (18:11) in fact the board can tell them anything they dont want to be told.

  Cheryl Langdon-Orr  -  ALAC APRegional Member: (18:11) lol

  Avri Doria: (18:11) ... can't tell them ....

  David McAuley (RySG): (18:11) I agree Leon

  Robin Gross [GNSO - NCSG]: (18:12) that's one level removed of liability.  I tend to agree this is a nonissue, I just want confirmation of that.

  Greg Shatan: (18:13) My name is Donald Duck.

  Greg Shatan: (18:13) Hey, it works in WHOIS.

  Leon Sanchez (Co-Chair, ALAC): (18:14) Hey Donald I'm a big fan! Can I have an autograph?

  Leon Sanchez (Co-Chair, ALAC): (18:14) Sorry, it's late and I'm tired :P

  Samantha Eisner: (18:15) Indemnify for which scope of activities?

  Samantha Eisner: (18:15) For activities within their own policy development processes?

  Edward Morris: (18:15) Indemnification works for me. Thanks.

  Samantha Eisner: (18:15) isn't that a broader community discussion as to the scope of the use of community funds?

  Greg Shatan: (18:18) And of course, since you're the chair, Leon, I'll let you lead any discussion of logistics/deliverables, etc.  :-)

  Leon Sanchez (Co-Chair, ALAC): (18:18) Thanks Greg! :-)

  David McAuley (RySG): (18:18) Alan has a good point but we also need lawyers rested so let's get his question and then allow lawyers to consider and we will be back at this in less than 9 hours

  Avri Doria: (18:19) i think that why i suggested a recall nomcom

  David McAuley (RySG): (18:19) I like the term "springing resignation" letter

  Leon Sanchez (Co-Chair, ALAC): (18:19) +

  Leon Sanchez (Co-Chair, ALAC): (18:19) +1 Cheryl

  Avri Doria: (18:20) and the letter solution does not repsond to the removal of a single director apporinted by nomcom issue.

  David McAuley (RySG): (18:21) its been a big day for Leon

  Greg Shatan: (18:21) @CLO, Alan -- great minds think alike...

  Adam Peake: (18:21) I am muted

  Leon Sanchez (Co-Chair, ALAC): (18:22) Thanks David, I am not alone in this :-) We, as a team, are all togegher in this so a big day for all of us ;-)

  David McAuley (RySG): (18:23) true

  Cheryl Langdon-Orr  -  ALAC APRegional Member: (18:23) Yes it is a SELECTION Committee by normal terms

  Avri Doria: (18:23) it is a nomcom in name only.

  Robin Gross [GNSO - NCSG]: (18:24) my phone battery died, so I can't talk now but, since the Nominating Come is already a collection of designators/members, couldn't they apportion some of their original rights to NomCom?

  Greg Shatan: (18:24) I think the "Nominating Committee" name was borrowed from another organization, but the way it worked didn't come along....

  Avri Doria: (18:24) yeah ou had explained that it could designated (and un designate) without membership.

  Robin Gross [GNSO - NCSG]: (18:25) and thus also retain their revocation rights?

  Leon Sanchez (Co-Chair, ALAC): (18:25) I'l voice your question in a moment @Robin

  Robin Gross [GNSO - NCSG]: (18:26) thanks - maybe we can draft around it because they all have the rights to begin with through their original membership / designatorship

  Josh Hofheimer (Sidley): (18:27) @Robin, yes the intent would be to enable the NomCom to remove its directors as well

  Robin Gross [GNSO - NCSG]: (18:27) and it could do that via the community mechanism?

  David McAuley (RySG): (18:27) lost Leon

  David McAuley (RySG): (18:27) now back yes

  Alan Greenberg: (18:27) No one is questioning the ability of the nomcom to remove directors. It is the philosophy within the context of ICANN that is the issue.

  Avri Doria: (18:28) i think it fits the phisophy perfectly.

  Robin Gross [GNSO - NCSG]: (18:28) sorry my phone battery died

  Robin Gross [GNSO - NCSG]: (18:28) I'll drop it

  David McAuley (RySG): (18:28) agree w/Holly

  Josh Hofheimer (Sidley): (18:29) Sorry, I thought I understood your question @Robin, but now I am not sure.  Let's discuss tomorrow.

  Robin Gross [GNSO - NCSG]: (18:29) yes, it would probably be easier to talk it through

  Robin Gross [GNSO - NCSG]: (18:29) thanks

  Greg Shatan: (18:30) Groucho Marx: "I don't want to belong to any club that would have me as a member."

  Cheryl Langdon-Orr  -  ALAC APRegional Member: (18:31) All good... thanks everyone,  talk to you all again  REAL soon ;-)

  David McAuley (RySG): (18:31) Thanks all at end of long day

  Adam Peake: (18:32) thank you.

  Becky Burr: (18:32) talk to you all soon!

  Greg Shatan: (18:32) Thank you all.  It's been quite the experience.  And so much more to come.

  Cheryl Langdon-Orr  -  ALAC APRegional Member: (18:32) bye

  Greg Shatan: (18:32) Bye all!

  Robin Gross [GNSO - NCSG]: (18:32) thanks all