[wg-review] Re: [wrg-review] Constituencies, 1 governance and legality

[Kent Crispin <kent@songbird.com>]

On Wed, Jan 31, 2001 at 12:43:11AM -0500, Sotiropoulos wrote:
> Ok Kent,  I've read it a few times over and also gone to the CNPBCL Code.
> 
> >1/30/01 6:40:04 PM, Kent Crispin <kent@songbird.com> wrote:
> >
> >>Article II, Section 1:
> >>
> >>    The Corporation shall not have members as defined in the California
> >>    Nonprofit Public Benefit Corporation Law ("CNPBCL"), notwithstanding
> >>    the use of the term "Member" in these bylaws, in a selection plan
> >>    adopted by Board resolution, or in any other action of the Board. 
> >>    Instead, the Corporation shall allow individuals (described in these
> >>    bylaws as "Members") to participate in the activities of the
> >>    Corporation as described in this Article II and in a selection plan
> >>    adopted by Board resolution, and only to the extent set forth in
> >>    this Article II and in a selection plan adopted by Board resolution. 
> >>
> >>I don't know how it could be more plain.  The corporation doesn't have
> >>members.  (I know that Karl Auerbach has entertaining legal theories. 
> >>You just have to consider that Karl is a full-time engineer who got a
> >>law degree, while the bylaws were written by full-time lawyers that
> >>everybody (except Karl) thinks are top notch.)
> 
> Well, this is how the CNPBCL Code defines "members":
> 
> 5056.  (a) "Member" means any person who, pursuant to a specific
> provision of a corporation's articles or bylaws, has the right to
> vote for the election of a director or directors or on a disposition
> of all or substantially all of the assets of a corporation or on a
> merger or on a dissolution unless the provision granting such right
> to vote is only effective as a result of paragraph (2) of subdivision
> (a) of Section 7132.  "Member" also means any person who is
> designated in the articles or bylaws as a member and, pursuant to a
> specific provision of a corporation's articles or bylaws, has the
> right to vote on changes to the articles or bylaws.
>    (b) The articles or bylaws may confer some or all of the rights of
> a member, set forth in this part and in Parts 2 through 5 of this
> division, upon any person or persons who do not have any of the
> voting rights referred to in subdivision (a).
>    (c) Where a member of a corporation is not a natural person, such
> member may authorize in writing one or more natural persons to vote
> on its behalf on any or all matters which may require a vote of the
> members.
>    (d) A person is not a member by virtue of any of the following:
>    (1) Any rights such person has as a delegate.
>    (2) Any rights such person has to designate or select a director
> or directors.
>    (3) Any rights such person has as a director.
> 
> Now, granted that California Code Law does not enjoin any corporation to *have* members, it does allow 
> Corporations to set up their own "membership" mandates.  I think it is quite clearly apparent that *some kind of 
> membership* is involved in the fact that "the Corporation (ICANN) shall allow individuals (described in these bylaws 
> as "Members") to participate in the activities of the Corporation as described in this Article II and in a selection plan 
> adopted by Board resolution, and only to the extent set forth in this Article II and in a selection plan adopted by 
> Board resolution."  Since, however, the @Large is able to vote in Directors of the Board, does it not follow that 
> such members are actually acting according to the CNPBCL definition of "members" (i.e. "5056.  (a) "Member" 
> means any person who, pursuant to a specific provision of a corporation's articles or bylaws, has the right to
> vote for the election of a director or directors...) ???
> 
> I'd appreciate a response.

Section (d)(2), above states "a person is not a member by virtue
of...Any rights such a person has to designate or select a director or
directors." That is, being part of a selection process does not in
itself confer being a "member" in the sense of the code; the bylaws
carefully define the atlarge elections as a "selection process"; the
very first part of the "membership" section makes it quite plain that
they are carefully avoiding the definition of "members" in the law.

Moreover, if you step back from the "ICANN is a government" mindset for
just a moment, the whole idea becomes ludicrous wishful thinking.  Think
of some other non-profit corporation -- think of the American Red Cross,
for example.  Directors would be *criminally negligent* if they opened
up the corporation to the liability risks of including a random
self-selected population as members.  Do you really think that allowing
any arbitrary person in the world standing to bring legal action against
the corporation would be in the best interests of the corporation? Do
you really think that any lawyer who didn't want to be disbarred would
suggest such a stupid thing?

I don't know how to put this any more plainly: from a simple common
sense point of view it would be pathologically stupid to create the kind
of membership that you are thinking about.  The world is full of crazy
people on missions.  An open membership within the meaning of the
California Code would be corporate suicide for a corporation as emeshed
in controversy as ICANN. 

-- 
Kent Crispin                               "Be good, and you will be
kent@songbird.com                           lonesome." -- Mark Twain
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