DCA Trust challenges ICANN’s litigation waiver on dotAfrica case

By Joseph Wright

An applicant for the .africa top-level Internet domain, DCA Trust, has fired back at domain overseer the Internet Corporation for Assigned Names and Numbers (ICANN), saying in a March 21 court filing that its blanket litigation waiver is unconscionable DotConnectAfrica Trust v. ICANN, C.D. Cal., No. 2:16-cv-00862, reply brief filed 3/21/16.

This is the last expected filing before the U.S. District Court for the Central District of California decides whether to continue to prevent ICANN from allowing a highly anticipated new domain to open for business, a move that could help expand e-commerce in Africa.

A general waiver including fraud and intentional legal violations is void in California regardless of whether the broader public interest is affected, DotConnectAfrica Trust (DCA) argued in a reply brief. The brief supports DCA’s application for temporary injunction preventing ICANN from delegating .africa to DCA’s competitor ZA Central Registry (ZACR).

Under Cal. Civ. Code § 1668, ‘‘All contracts which have for their object, directly or indirectly, to exempt any one from responsibility for his own fraud, or wilful injury to the person or property of another, or violation of law, whether willful or negligent, are against the policy of the law.’’

ICANN argued in a previous filing that the provision applies only to agreements implicating the public interest, denied its application implicated that interest and said any voidness should only apply to fraud claims (21 ECLR, 3/23/16).

Competing .Africa Applications. DCA and ZACR both filed applications in 2012 to operate .africa as part of ICANN’s new generic top-level domain (gTLD) program to expand Internet space beyond existing domains such as .com. Applications for multinational regions require the support of at least 60 percent of affected governments.

The African Union on behalf of most African governments initially supported DCA but later withdrew that support in 2010 and instead backed ZACR. DCA has argued that the withdrawal was ineffective under ICANN’s rules.

ICANN initially awarded .africa to ZACR, but DCA filed an independent review panel proceeding challenging that determination (19 ECLR 147, 1/29/14). The panel agreed with DCA that its application should be allowed to proceed (20 ECLR 956, 7/15/15), but the parties disagree about the scope of that ruling.

ICANN placed DCA’s application back into geographic names review, which it failed due to lack of support from affected governments (21 ECLR 250, 2/24/16). But DCA argued that the panel’s ruling was much broader, ordering ICANN to forward its application through the entire process and grant DCA the .africa name.

‘‘DCA Trust firmly believes that ICANN continues to breach its Bylaws, Articles of Incorporation, and now violates the arbitration panel’s ruling,’’ a DCA representative told Bloomberg BNA in February.

DCA filed suit to enforce its understanding of the decision and received a temporary restraining order preventing ICANN from delegating .africa to ZACR (21 ECLR 325, 3/9/16). The court will hear DCA’s injunction motion April 4.

ICANN Release Argument ‘Disingenuous.’

DCA argued that applicants had no bargaining power regarding the broad litigation waiver in ICANN’s new gTLD application. Even ICANN’s committee of government advisors criticized the release, but ICANN imposed it anyway, DCA argued. ICANN was ‘‘therefore disingenuous’’ in arguing that the release language was negotiated, DCA said.

ICANN independent review process wasn’t a fair alternative to litigation, DCA said, because ICANN has refused to accept that panel determinations are binding. As a result, DCA argued, the release language was procured by fraud.

DCA also argued that ICANN can’t show any harm resulting to it if the injunction is granted. Any alleged harm wouldn’t accrue to ICANN or ZACR, but to a previously undisclosed foundation that could raise money from .africa’s exploitation, DCA said. DCA also said seeking monetary damages didn’t prevent the court from imposing an injunction because DCA only sought damages as an alternative remedy.

Brown Neri and Smith LLP represented DCA. Jones Day LLP represented ICANN.

(You can contact the writer of the article, Joseph Wright, in Washington at jwright@bna.com. The article was first published by The Bureau of National Affairs, but has been reproduced from DotConnectAfrica Blog.  Reproduced with permission from Electronic Commerce & Law Report, 21 ECLR 441 (March 30, 2016). Copyright 2016 by The Bureau of National Affairs, Inc (800-372-1033).