South African registry ZACR did not engage in a fraudulent conspiracy with ICANN to get its .africa gTLD application approved, a court ruled yesterday.
The California judge in the case of DotConnectAfrica vs ICANN and ZACR threw out all of DCA’s claims against ZACR, approving ZACR’s motion to dismiss.
The judge said DCA had failed to make claims for fraud, contract intereference and unfair competition.
He also threw out DCA’s demand for ZACR’s .africa Registry Agreement to be scrapped.
The case is not over, however.
DCA’s claims against ICANN still stand and ICANN, perhaps regrettably, withdrew its own motion to dismiss the case weeks ago. The case still looks like heading to trial.
DCA reckons ICANN, ZACR, independent evaluator InterConnect Communications, and the Governmental Advisory Committee improperly ganged up on it, in breach of its new gTLD application contract.
The judge has already ruled that the litigation waiver DCA signed when it applied for
.dotafrica .africa may be unenforceable.
He also based a decision to give DCA’s claims the benefit of the doubt on a huge misunderstanding of the facts, which he has yet to address publicly.
You can read the judge’s latest order here (pdf).
Under an injunction DCA won, .africa cannot be delegated until the case is resolved.
ZA Central Registry has told the judge in DotConnectAfrica’s lawsuit against ICANN that the preliminary injunction he granted DCA recently was based on a misunderstanding.
The injunction, granted a month ago, prevents ICANN delegating the .africa gTLD to ZACR until the lawsuit reaches a conclusion.
But, in papers filed Friday, ZACR points out that the judge screwed up in his reasoning. Judge Gary Klausner’s ruling was “predicated upon a key factual error”, ZACR says.
The error is the same one I wrote about last month — the judge thinks DCA originally passed the Geographic Names Review of its Initial Evaluation for .africa, and that ICANN later failed it anyway.
In fact, DCA never passed the GNR, and the document the judge cites in his ruling is actually ZACR’s Initial Evaluation report.
The GNR is the bit of the evaluation where both .africa applicants had to prove they had support from 60% of African governments and no more than one African governmental objection.
ZACR said in one of its Friday filings (pdf):
The record is undisputed that DCA’s application had not passed the geographic names evaluation process. And it could not because DCA did not have the requisite support of 60% or more of the African Union governments. Further, DCA’s application had been the subject of 17 “Early Warning” submissions by African Union governments. Correcting for this factual error, the record is clear that DCA has no likelihood of success in this litigation.
ZACR also says Klausner erred by saying .africa could only be delegated once, saying that TLDs can be redelegated to different operators after their initial delegation.
It’s filed a motion asking the judge to “reconsider and vacate” his preliminary injunction ruling.
ZACR is now named as a defendant in the lawsuit, which originally only named ICANN and unidentified parties.
ICANN has dropped its motion to dismiss the case and last week filed its answer (pdf) to DCA’s complaint, in which it denies any wrongdoing.
ICANN appears to be happy to let the judge’s mistake slide, or at least to allow ZACR to burden the risk of potentially pissing him off by highlighting his error.
The court ruling that granted DotConnectAfrica a preliminary injunction preventing ICANN delegating .africa seems to be based to a large extent on a huge error by the judge.
In explaining why he was allowing DCA v ICANN to proceed, despite DCA’s signing away its right to sue when it filed its new gTLD application, California district judge Gary Klausner seems to have confused DCA with rival .africa applicant ZACR.
In his Tuesday ruling, Klausner said that evidence supports the claim that ICANN was determined to flunk DCA’s application no matter what.
The key evidence, according to the judge, is that the Initial Evaluation of DCA’s application found that it did have enough support from African governments to pass its Geographic Names Review, but that ICANN subsequently reversed that view in Extended Evaluation.
DCA claims that “the process ICANN put Plaintiff through was a sham with a predetermined ending – ICANN’s denial of Plaintiff’s application so that ICANN could steer the gTLD to ZACR.”
In support, DCA offers the following evidence. ICANN’s initial evaluation report in July 2013 stated that DCA’s endorsement letters “met all relevant criteria in Section 22.214.171.124.3 of the Applicant Guidebook.” (Bekele Decl. ¶ 40, Ex. 27, ECF No. 17.) After the IRP Decision, ICANN performed a second evaluation on the same information originally submitted by DCA. In the second evaluation, however, ICANN found that the endorsement letters did not meet the same criteria applied in the first evaluation
He later writes:
Despite ICANN’s contention, the evidence presents serious questions pointing in favor of DCA’s argument. First, a March 2013 email from ICC to ICANN stated that ICANN needs to clarify AUC’s endorsements since AUC properly endorsed both DCA and ZACR. (Bekele Decl. ¶ 30, Ex. 19, ECF No. 17.) Subsequently, ICANN’s July 2013 initial evaluation report found that the endorsement letters have “met all relevant criteria in Section 126.96.36.199.3 of the Applicant Guidebook.” (Bekele Decl. ¶ 40, Ex. 27, ECF No. 17.) Because ICANN found DCA’s application passed the geographic names evaluation in the July 2013 initial evaluation report, the Court finds serious questions in DCA’s favor as to whether DCA’s application should have proceeded to the delegation stage following the IRP Decision.
The document “Bekele Decl. ¶ 40, Ex. 27” referred to is exhibit 27 of DCA CEO Sophia Bekele’s March 1 declaration, filed in support of its preliminary injunction motion.
The problem is that that exhibit is not the Initial Evaluation report for DCA’s .africa bid, it’s the IE report for rival ZACR (aka UniForum).
Read it here (pdf).
DCA’s own application never received a scored IE report. At least, one was never published.
It only got this (pdf), which states simply “Overall Initial Evaluation Summary: Incomplete”. That document is dated July 3, 2013, almost two weeks before the ZACR report.
Bekele’s declaration even states that exhibit 27 is the IE report for the ZACR application.
It’s not clear to this non-lawyer how important this pretty basic error is to Klausner’s thinking, but as a layman it looks pretty crucial.
It certainly seems like something that needs to be addressed, given that the apparent misunderstanding plays into both the decision to allow the lawsuit to proceed and the decision that DCA’s complaint may have merit.
Several other exhibits cited in the ruling — including emails from the InterConnect Communications evaluators who carried out the Geographic Names Review — have been redacted by the court.
It’s possible there are smoking guns contained within these censored documents that were more influential on the ruling.
It’s also notable that ICANN is continuing to redact the court documents it publishes on its web site, beyond those filed under seal and censored by the court.
DotConnectAfrica has won a California court ruling that will allow it to continue suing ICANN over its twice-rejected .africa gTLD application.
District judge Gary Klausner ruled yesterday that the litigation waiver all applicants had to sign when they applied may be unenforceable.
“The Court finds substantial questions as to the Release, weighing toward its unenforceability,” he wrote (pdf).
California law says that such waivers cannot stop people being sued for fraud, and fraud is what DCA is alleging, he explained.
DCA alleges that ICANN intended to deny DCA’s application after the IRP proceeding under any pretext and without a legitimate reason.
The evidence suggests that ICANN intended to deny DCA’s application based on pretext. Defendants have not introduced any controverting facts. As such, the Court finds serious questions regarding the enforceability of the Release due to California Civil Code § 1668.
The judge granted DCA’s request for a preliminary injunction that will prevent it from delegating .africa to successful applicant ZACR.
ZACR has the backing of the African Union Commission and, per ICANN rules, over 60% of the governments in Africa.
DCA applied for .africa with no government support, but with an AUC letter of support than had already been retracted. The company claims that the AUC was not allowed to withdraw its endorsement under ICANN rules.
But it doesn’t seem to matter what the governments of Africa want. Klausner wrote:
On balance, the Court finds it more prejudicial to the African community, and the international community in general, if the delegation of .Africa is made prior to a determination on the fairness of the process by which it was delegated.
Sorry Africa, no gTLD for you yet!
The case continues…
A US court has blocked ICANN from delegating the .africa gTLD for at least another month.
At the request of failed .africa applicant DotConnectAfrica, a California judge handed ICANN a temporary restraining order, enjoining it from “issuing” .africa.
The ruling came two days after the ICANN board of directors voted to allow .africa to be delegated to successful applicant ZACR.
The decision seems to be based on the fact that a delegation is essentially irreversible, so even if DCA were to win the lawsuit it would not be able to get its hands on the gTLD.
“Plaintiff has demonstrated that once the tGLD [sic] is issued, it will be unable to obtain those rights elsewhere,” the judge wrote (pdf).
DCA’s lawsuit, filed despite the that that it waived its right to sue under the new gTLD application agreement, basically makes the same arguments that its successful Independent Review Process made.
The court is due to hold a hearing on April 4 to decide whether ICANN can delegate .africa or will have to wait until the lawsuit is fully resolved.
The company, incidentally, appears to have changed lawyers since its original complaint against ICANN was filed. It’s now with Brown Neri & Smith, having briefly been with Brandon Schantz.