ICANN had an “unbridled discretion” to do as it pleases with DCA’s .Africa application But no gTLD applicant would expect that this “discretion” could include biased, arbitrary, and unfair treatment, after submitting an $185,000 application fee to ICANN” – DCA Trust
DCA Trust has filed an opposition to ICANN’s Claim to dismiss its first amended complaint on three grounds.
First and most importantly, the Prospective Release ICANN rely upon is unconscionable and procured by fraud, argues DCA Trust through its lawyers:
“Now for the third time makes the identical cut-and-paste argument relying on the prospective release and covenant not to sue (the “Prospective Release”) it forces applicants for generic top level domain (“gTLDs”) to sign as a condition of their application.”
DCA Trust emphasize that the Court already implicitly rejected the argument that this Prospective Release was enforceable as a matter of law in ruling that Plaintiff DotConnectAfrica Trust (“DCA”) had raised “serious questions” going to the merits in granting DCA’s application for a temporary restraining order (“TRO”). This is because “the Prospective Release is also unconscionable and procured by fraud – allegations that, at a bare minimum, permit DCA discovery to support them.”
Second, “DCA properly alleged fraud with specificity” argued DCA Trust, and that ICANN made various false representations through its Guidebook, Bylaws, and Articles of Incorporation saying:
“ICANN afforded applicants with due process through the Internal Review Process (“IRP”); ICANN reviewed applications according to the Guidebook, Bylaws, and Articles of Incorporation; ICANN would participate in the IRP in good faith; and all gTLD applicants receive the same treatment according to the Guidebook, Bylaws, and Articles of Incorporation. DCA also alleged ICANN’s fraudulent actions in processing ZACR’s improper application”.
Third, ICANN argues that DCA’s breach of contract claim must fail, basing it primarily on its “discretion” clause in its Guidebook – however DCA Trust argue,
“regardless of its actions or the representations in the Guidebook about how it processes gTLD applications – ICANN had the unbridled discretion to do as it pleased with DCA’s .Africa gTLD application. But no gTLD applicant would expect that this “discretion” could include biased, arbitrary, and unfair treatment, after submitting an $185,000 application fee to ICANN”.
After all, said DCA Trust
ICANN touts its “transparency, fairness, and unbiased” framework to parties applying for various TLDs, “Even if ICANN has the discretion to deny an application, ICANN must still comply with provisions of the Guidebook, which include references to its Bylaws and its Articles of Incorporation. (Guidebook Section 5.4.2) Throughout its FAC, DCA has alleged various breaches of those provisions“.
ICANN also argues that the discretion to “determine not to proceed with any and all applications for new gTLDs” means that it cannot have breached the Guidebook.
However, DCA alleges
“that ICANN failed to comply with other provisions in the Guidebook regarding: 1) gTLD program rules of transparency and fair competition, 2) the geographic names evaluation process; and 3) GAC procedures . ICANN cannot accept an $185,000 application fee and then refuse to abide by the provisions of the Guidebook and the rules that ICANN incorporated therein”
DCA Trust also argues that
“The interpretation of ICANN’s “discretion” clause is ambiguous.” Therefore, it cannot mean that ICANN can decide to reject a qualified applicant for any reason whatsoever. It must be read in context and in conjunction with the numerous other provisions in the Guidebook which limit and define that discretion. Cal. Civ. Code §1641. Of course ICANN may use its discretion in rejecting gTLD applications – but it must still apply the rules that it agreed to in the Guidebook in exercising that discretion.”
ICANN concludes that it
“complied with its obligations to consider Plaintiff’s Application in accordance with the procedures set forth in the Guidebook.”
However, DCA Trust disagrees and says:
“ICANN did not comply with its obligations; the entirety of DCA’s complaint is based on ICANN’s failure to follow the Guidebook, Articles of Incorporation, or Bylaws. The IRP Panel already determined this fact.
In this case, any ambiguities in the Guidebook should be interpreted in DCA’s favor because ICANN drafted the Guidebook. According to Cal. Civ. Code §1654, “If a contract is capable of two different reasonable interpretations, the contract is ambiguous.”
But in any event, DCA Lawyers say:
“because “the court must accept as true all material allegations in the complaint, as well as any reasonable inferences to be drawn from them” ICANN’s conclusion regarding its compliance with the Guidebook is irrelevant on the motion to dismiss.”
and accordingly, DCA Trust concludes
“ICANN’s self-described “discretion” it put in its Guidebook does not somehow trump all of the other Guidebook requirements and does not grant it absolute immunity or protection from breaches of the agreement between the Parties”
You can read DCA Trust’s Opposition to ICANN’s Motion to Dismiss fully here: