The legal regime around ICANN and Internet governance will be affected by a milestone court decision handed down this week. Claiming that Iran was a terrorist state responsible for the deaths of their family members in the Jaffa Road bus bombings of 1996, a group of plaintiffs sought to take control of the ccTLD for the Islamic Republic of Iran (.IR) as compensation for the damages they were awarded. Lacking any other form of recourse, they sued ICANN to compel it to turn over the ccTLD .IR to them.

ICANN threw up a number of defenses against this action, including the argument that domain names could not be considered property rights and thus could not be seized as compensation.

ICANN won the first round, as a DC District court ruled that a ccTLD was not something that could be attached under DC law. The case was appealed. In Weinstein et al vs Islamic Republic of Iran, the U.S. appeals court for the District of Columbia rejected the plaintiff’s attachment claim – but not because ccTLDs are not property. Indeed, the court said

We assume without deciding that the ccTLDs the plaintiffs seek constitute “property” under the Foreign Sovereigns Immunity Act and, further, that the defendant sovereigns have some attachable ownership interest in them.

Instead, the court refused to allow the plaintiffs to seize the domain because

…the court has the “authority” to “prevent appropriately the impairment of an interest held by a person who is not liable in the action giving rise to a judgment”—i.e., we are expressly authorized to protect the interests of ICANN and other entities. Because of the enormous third-party interests at stake—and because there is no way to execute on the plaintiffs’ judgments without impairing those interests—we cannot permit attachment.

In other words, the court decided that a compelled transfer of the domain was inimical to the interests of the people who have registered domain names under .IR, and we agree this is a serious concern. A legally compelled redelegation that resulted in the expropriation of thousands of domain name registrants in Iran, practically all of which had nothing to do with the Jaffa bus bombings, would be unjust and destabilizing.

Less plausibly, the court also seemed to be keen to maintain ICANN’s role as steward of the stability and interoperability of the DNS. Citing an Amicus Curiae brief from the U.S. governments, which stated that “[T]he result [of a forced delegation] would be devastating for ICANN, for the [current] model of Internet governance, and for the freedom and stability of the Internet as a whole,” the court ruled that:

…even if the plaintiffs are able to show adequate competence and commitment [to operate the .IR top level domain], the act of forced delegation itself impairs ICANN’s interest in “protect[ing] the stability . . . [and] interoperability . . . of the DNS.

We find this argument exaggerated and bordering on the absurd. We fail to see how a redelegation based on legal due process that merely transfers one domain from one party to another undermines ICANN’s role as coordinator of the global DNS or undermines the entire nongovernmental model of Internet governance. As long as the transfer is driven by known rules (e.g., regarding forfeiture of property) and does not impair the interests of registrants who were not the cause of the forfeiture, there is simply no impact on the global compatibility of the DNS. Indeed, second-level domains are transferred under ICANN rules all the time, and there is also a process that could result in challenges to and transfers of generic TLD delegations.

In general, courts have become far more sophisticated about the workings of the DNS and the best way to apply various legal principles to it. They are still, however, often mystified by grand claims about the magical role that ICANN/IANA plays in coordinating the global DNS. It’s unfortunate that the court was swayed by specious arguments.

The bottom line is that the decision does not resolve the conflicting claims about the property status of domains, nor does it add anything to our understanding of the sovereignty claim over ccTLD delegations. What it does do is use a rather weak argument to bolster a public trustee model of ccTLD delegation with ICANN in the role of global steward of the trusteeship relationship. Clearly, there is still room for legal, political, institutional and economic analysis of the complex triangular relationship between national governments, ICANN, and ccTLD delegations. IGP principals Milton Mueller and Farzaneh Badii are working on a comprehensive legal analysis of the property status and sovereignty claims over ccTLDs, which we expect to be published early next year.