BNA: Judge Halts .Africa Domain; Lengthy Litigation Likely
April 25, 2016
Federal Judge Halts .Africa Domain; Litigation Waiver Ruled Likely Invalid
April 13 — A pan-African Internet domain remains on hold after a federal court April 12 enjoined the Internet Corporation for Assigned Names and Numbers from finalizing the .Africa domain while an unsuccessful competitor’s lawsuit proceeds.
Judge R. Gary Klausner of the U.S. District Court for the Central District of California granted DotConnectAfrica Trust’s request to enjoin ICANN from delegating the .africa top-level domain (similar to .com or .org) to the ZA Central Registry. DotConnect and ZACR were the only two applicants for operating the domain.
“The evidence suggests that ICANN intended to deny DCA’s application based on pretext,” Judge Klausner said.
The decision undermines two important pieces of the legal framework underlying ICANN’s expansion of the domain name space in recent years—a broad litigation waiver for all applicants, and ICANN’s longstanding view that independent review process (IRP) arbitrations challenging ICANN decisions are merely advisory.
The decision also comes at the end of a long process to enhance ICANN’s accountability as it prepares to free itself from U.S. government oversight. Paul Rosenzweig, principal at Red Branch Consulting and a former deputy assistant secretary for policy with the Department of Homeland Security, told Bloomberg BNA April 13 that the decision underscores the importance of those enhancements.
“You’ve got a neutral federal judge on top of three arbitration panelists saying ICANN’s not playing by the rules,” Rosenzweig said. “It’s a paradigm about the accountability of ICANN and the board. We’re giving ICANN an awful lot of power to make decisions like this.”
The decision also addressed many of the arguments raised in ICANN’s pending motion to dismiss the suit, strongly suggesting the case will proceed to discovery and a much longer delay before the domain can become active. The motion to dismiss hearing is scheduled for April 25. ICANN’s arguments for dismissal relied heavily on the litigation waiver that the court found ineffective in the injunction ruling, DotConnect’s attorney told Bloomberg BNA April 13.
“That finding now means that, at the very least, the substantial majority of DCA’s case will survive the Motion to Dismiss and the case against ICANN will move forward to full litigation and discovery,” said Ethan Brown, partner at Brown Neri Smith & Khan LLP in Los Angeles.
Neil Dundas, executive director of ZACR, told Bloomberg BNA April 13 that the injunction ruling is “devastating for the African Internet community.”
“The voice of the African community has not been heard during this prolonged war of attrition between a U.S. organisation and (what is essentially) a U.S. resident,” Dundas said in an e-mail. “No true African entity has been party to these legal proceedings, but the outcomes have had a profound negative effect on the African digital landscape.”
DotConnect and ZACR each applied to ICANN to operate the .africa domain. Under ICANN’s rules, applicants for names matching multinational regions must have the support of at least 60 percent of affected governments. The African Union, consisting of all African countries except Morocco, initially backed DotConnect but revoked that support in favor of ZACR, which operates South Africa’s .za domain. DotConnect has asserted that the African Union’s revocation of support was ineffective under ICANN’s rules.
Both applicants passed ICANN’s initial evaluation, but government representatives flagged DotConnect’s bid and ultimately advised that it not proceed (18 ECLR 717, 4/17/13). ICANN’s board accepted that advice, but an IRP panel determined it did so without an appropriate investigation and recommended that DotConnect’s application go forward (20 ECLR 956, 7/15/15). ICANN restarted DotConnect’s application at the geographic names review stage and failed the bid, saying it lacked the necessary support (21 ECLR 250, 2/24/16).
DotConnect sued ICANN for breach of contract, fraud and declaratory relief that ICANN should refrain from processing ZACR’s application and that it shouldn’t have required a new geographic names evaluation. DotConnect obtained a temporary restraining order against ICANN and sought an injunction (21 ECLR 325, 3/9/16).
ICANN responded that DotConnect had agreed to a broad litigation waiver and that all disputes would be resolved through the IRP process (21 ECLR 404, 3/23/16).
Litigation Waiver Unenforceable
The court found that an injunction was appropriate because DotConnect raised serious questions on the merits. It also found that .africa is a unique asset and DotConnect could suffer irreparable harm without an injunction.
The court said that ICANN’s broad litigation waiver, which includes intentional and fraudulent behavior, is likely unenforceable under California law. DotConnect alleged that ICANN intentionally put its application through a “sham” process with a predetermined outcome.
The crux of DotConnect’s argument is that the initial evaluation report on its application said it met the criteria for a geographic name with properly documented support. That evidence raised serious questions that ICANN’s post-IRP geographic evaluation was pretextual, the court found. ICANN had argued that DotConnect didn’t complete geographic review before its application was initially denied.
The court previously found that ICANN was likely to delegate .africa to ZACR immediately had it not granted DotConnect a temporary restraining order. It said that was still true if it didn’t grant a preliminary injunction.
ICANN argued DotConnect’s damages request suggested no irreparable harm would come from an injunction denial. The court disagreed, saying an alternative request for damages didn’t preclude seeking an injunction.
The court also said the public interest is best served by a “fair and transparent application process” for domains. ICANN argued delay is harming Africa’s ability to participate in the Internet economy. But the court said it gave little weight to an African Union official’s declaration because of the Union’s relationship with ZACR.
ICANN didn’t respond to a request for comment.
Jones Day LLP represented ICANN.
For More Information
BY JOSEPH WRIGHT
The article was first published on BNA at http://www.bna.com/judge-halts-africa-n57982070034/
(To contact the reporter on this story: Joseph Wright in Washington at email@example.com 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) )