After ICANN President Stuart Lynn and ICANN Chair Vint Cerf issue a misleading press release regarding a lawsuit filed by one of the few ICANN board members actually elected by Netizens: http://www.icann.org/announcements/announcement-19mar02.htm the EFF responds as follows ... At 3/20/02 02:44 AM, Dave Farber wrote: >I remind folks that I am a long time Trustee of EFF djf > >------ Forwarded Message >From: Cindy Cohn <[EMAIL PROTECTED]> >Date: Tue, 19 Mar 2002 20:30:24 -0800 >To: [EMAIL PROTECTED] >Subject: Fwd: Re: ICANN: Auerbach's Allegations Off Target > > >Hi Dave, > >Feel free to post this to IP with attribution. As you know, EFF is serving >as co-counsel to Mr. Auerbach. > >I think a little legal context could be helpful to IPers considering Karl >Auerbach's lawsuit against ICANN and ICANN's published response. I >apologize in advance for the repeated use of the term "fiduciary duty;" I >don't think I've ever used it so many times in a single message. > >First, as a Director of ICANN, Karl has a fiduciary duty to the corporation >under California law. The duty is also repeated in the ICANN Bylaws >(Article V, section 8). Karl has repeatedly acknowledged his fiduciary duty >in his correspondence with ICANN, so the characterization of this dispute >as arising from Karl's failure to "acknowledge" his fiduciary duty is >misleading. > >Second, Karl's fiduciary duty includes ensuring that the corporate records >are in order. It is in furtherance of this duty that Karl first sought the >records in November, 2000. This duty also includes keeping confidential >corporate information confidential, so the claim that a separate >contractual agreement is required to ensure this is unfounded. Karl has >always been willing to abide by his fiduciary duties concerning corporate >privacy and has repeatedly affirmed this to ICANN management. > >Third, in addition to his duty, California law gives Karl an "absolute >right at any reasonable time to inspect and copy all books records and >documents of every kind . . ." California Corporations Code sec. >6334. This right is also repeated in the ICANN Bylaws (Article V, section >21). > >So with this in mind, here are a few responses to ICANN's specific claims: > > > >According to Lynn, Auerbach has only been asked to affirm that he will > >abide by reasonable procedures for access > > >What ICANN's management wanted Karl to do contractually was different than >simply affirming his fiduciary duties. It was to agree that the decision >to grant him any access or use of corporate records rests in the first >instance with ICANN management. Then, if he disagreed with management, it >set up an appeal process first to a small subset of the Board and then to >the entire Board. > > >endorsed by ICANN's Audit Committee (composed of three independent > >Directors) and shared with the entire Board. "He could have had access > >months ago but prefers to file lawsuits instead," noted Lynn. > >This wording is interesting. Note that Mr. Lynn does not say that the >procedures were "adopted" by the Board. This is because they >weren't. They were merely "shared" with it. > >The lawsuit is about whether it is proper for management to impose such >procedures on Board members, as well as whether the procedures management >put into place were "reasonable" in light of Mr. Auerbach's legal rights >and duties as a member of the Board and ICANN's own Bylaws. > > > >Among ICANN's 19-member Board of Directors, only Mr. Auerbach has objected > >to those procedures, refusing to acknowledge that all ICANN Directors owe > >a fiduciary duty to ICANN. He claims that he alone, and not the whole > >Board, will determine whether to disclose personnel and other information > >normally kept confidential or privileged. > >As noted above, the Board has not passed any resolution concerning Board >member access to corporate records. > >Note that although it is not at issue here, I do not think that California >law would allow a Board-adopted policy that placed each Board member's >individually ability to review and use records at the discretion of the >entire Board. I think this would violate the Corporations Code, which >creates *individual* rights and duties for each Board member. Put another >way, I do not believe the Board as a whole could not eliminate the >fiduciary duty placed on individual Board members by law. > >More importantly, this is a dispute about access, not over public >disclosure. Karl's disclosure of information "normally kept confidential >or privileged" is already subject to his independent fiduciary duty under >law and he has never indicated that he intends to "disclose" any of the >information he reviews. > > > > "This lawsuit is misplaced and can only result in a total waste of > > valuable time and resources," Lynn summarized. "ICANN will defend itself > > vigorously to protect the rights of the corporation, and the legitimate > > best interests of all of ICANN's directors and of the stakeholder > community." > >This lawsuit resulted from the sixteen months that ICANN refused to accede >to Mr. Auerbach's repeated requests to review basic corporate records. If >there has been any waste, it is caused by ICANN management. > >EFF believes that the Internet community should be served by an Internet >naming authority that is open, transparent, and accountable. ICANN >management's behavior overall has been closed, opaque, and arbitrary. We >decided to assist Karl because it now appears that ICANN has failed to >abide by even the most basic standards of California law -- the placement >of ultimate control of a corporation with the Board, not the management. > >While this would be a problem in any corporation, it is especially >distressing when it concerns one of the only publicly elected members of a >nonprofit corporation that has been entrusted with control over such a >vital part of the Internet. > >Cindy > >------ End of Forwarded Message > >For archives see: >http://www.interesting-people.org/archives/interesting-people/ +++ Jay Fenello, Internet Coaching http://www.Fenello.com ... 678-585-9765 http://www.YourWebPartner.com ... Web Support http://www.AligningWithPurpose.com ... for a Better World --------------------------------------------------------- "The first step is to penetrate the clouds of deceit and distortion and learn the truth about the world, then to organize and act to change it. That's never been impossible and never been easy." -- Noam Chomsky
