DotConnectAfrica Trust v. Internet Corp. for Assigned Names & Nos. ( 2021 )

Filed 9/20/21
CERTIFIED FOR PUBLICATION
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION EIGHT
DOTCONNECTAFRICA TRUST, B302739
Plaintiff and Appellant, (Los Angeles County
Super. Ct. No. BC607494)
v.
INTERNET CORPORATION FOR
ASSIGNED NAMES AND
NUMBERS,
Defendant and Respondent;
ZA CENTRAL REGISTRY, NPC,
Intervener and Respondent.
APPEAL from a judgment of the Superior Court of
Los Angeles County, Robert B. Broadbelt, III, Judge. Affirmed.
Dechert, Arif H. Ali, Anna Q. Do and Michael H. McGinley
for Plaintiff and Appellant.
Jones Day, Jeffrey A. LeVee, Erin L. Burke, Erica L.
Reilley and Erna Mamikonyan for Defendant and Respondent.
Kesselman Brantly Stockinger, David W. Kesselman, Amy
T. Brantly and Kara D. McDonald for Intervener and
Respondent.
____________________
We affirm the trial court’s application of judicial estoppel in
this case about internet names.
The Internet Corporation for Assigned Names and
Numbers, widely known as ICANN, is in charge of internet
website names. In this role, ICANN selects entities to handle
selling internet names using particular suffixes. ICANN decided
to expand the online universe by creating hundreds of new
internet suffixes to supplement existing endings like .org (as in
lacourt.org) and .gov (as in courts.ca.gov). One of ICANN’s
proposed new suffixes was .africa. The chosen registrant would
be able to sell internet names using this suffix. A fanciful name
example would be example.africa.
Two organizations applied for the .africa name rights. One
was DotConnectAfrica Trust, which we shorten to DotConnect.
The other was ZA Central Registry, NPC, which we call ZA.
Representatives of more than 150 nations and
international organizations advised ICANN against awarding the
.africa rights to DotConnect. ICANN took this advice, rejected
DotConnect, and selected ZA.
DotConnect appealed to ICANN’s internal dispute
resolution program, which resulted in a two-year arbitration.
DotConnect told the arbitrators they should grant it seven
procedural advantages during the arbitration—advantages like
interim relief and an independent standard of review.
DotConnect’s argument to the arbitrators was, when it applied to
ICANN for .africa, DotConnect had waived its right to sue
2
ICANN in court, and this waiver meant it was only fair that
DotConnect enjoy these procedural advantages during the
arbitration. The arbitrators accepted DotConnect’s arguments
and gave DotConnect the advantages it sought.
The arbitrators did not award the .africa name to
DotConnect. Rather the arbitrators ruled ICANN should put
DotConnect back in the contest by resuming consideration of
DotConnect’s application at the stage where ICANN had left off.
ICANN complied with the arbitrators’ order and resumed
considering DotConnect’s application. ZA, however, continued to
have the backing of the African Union Commission and
apparently of all 55 nations the African Union recognizes. The
past support for DotConnect was no longer current. ICANN
ultimately rejected DotConnect and awarded ZA the rights to
.africa.
DotConnect declined to seek arbitral review of this new
ICANN decision. Rather it sued ICANN in Los Angeles Superior
Court. The trial court held a bench trial and ruled against
DotConnect on grounds of judicial estoppel.
DotConnect appealed. The respondents are ICANN and
ZA.
We affirm. DotConnect has estopped itself from suing in
court by convincing ICANN’s arbitrators DotConnect could not
sue in court.
I
The facts span continents and decades.
A
We begin with the parties: DotConnect, ZA, and ICANN.
3
1
DotConnect is a nonprofit organization founded under the
laws of Mauritius with a principal place of business in Kenya. Its
founder and CEO is Sophia Bekele.
Bekele maintains the website Sophia Bekele, which states,
“Bekele travels globally for her work and shuttles regularly
between her residences in Walnut Creek, California and Africa,
where she has a firm based in business and family.” (Sophia
Bekele, Biography [as of
Sept. 15, 2021], archived at .)
Bekele was born in Ethiopia and moved to the U.S. when she was
16. At the time of trial, Bekele had had a home in Northern
California for about 20 years. At oral argument, the parties
described Bekele as a person of achievement.
2
ZA is, according to DotConnect, a proxy applicant for the
African Union Commission. ZA is a party to this case; the
African Union Commission is not, but it is central to the
controversy.
ZA is a South African nonprofit company with its principal
place of business in Midrand, South Africa. Its CEO is
Mokgabudi Lucky Masilela. It was originally formed in 1988
under the name UniForum SA to promote open standards in
software and hardware. ZA is the largest domain name registry
in Africa. At the same time it applied for .africa, ZA applied for,
and obtained, .capetown, .joburg, and .durban. ZA has launched
these names to the internet public. ZA claims to have a well-
known reputation of independence, neutrality, technical
competence, and operational excellence.
4
The African Union Commission is, according to
DotConnect, appointed officials who represent African heads of
state. The Commission is the secretariat for the African Union,
an intergovernmental organization comprised of the nations of
the African continent. (See African Union, About the African
Union [as of Sept. 15, 2021],
archived at .)
As of 2013, these member states included Algeria, Angola,
Benin, Botswana, Burkina Faso, Burundi, Cabo Verde,
Cameroon, Central African Republic, Chad, Comoros, Congo,
Cote d’Ivoire, Democratic Republic of the Congo, Djibouti, Egypt,
Equatorial Guinea, Eritrea, Ethiopia, Gabon, Gambia, Ghana,
Guinea, Guinea-Bissau, Kenya, Lesotho, Liberia, Libya,
Madagascar, Malawi, Mali, Mauritania, Mauritius, Mozambique,
Namibia, Niger, Nigeria, Rwanda, Sahrawi Republic, São Tomé
and Príncipe, Senegal, Seychelles, Sierra Leone, Somalia, South
Africa, South Sudan, Sudan, Swaziland, Togo, Tunisia, Uganda,
United Republic of Tanzania, Zambia, and Zimbabwe.
3
ICANN helps govern the internet. Its website bears the
slogan “One World, One Internet.” (ICANN
[as of Sept. 15, 2021], archived at
.) We sketch ICANN’s origin and
nature.
First we need some internet basics. A “domain name” is an
internet name like lacourt.org or courts.ca.gov. The “.org” or
“.gov” is the “top-level domain” name. ICANN is the entity that
today establishes what top level domain names can exist and
what other entities control the creation of new domain names.
5
The domain name system evolved as the internet grew from
a recondite research curiosity to today’s worldwide information
system. ARPANET, the forerunner of the internet, carried its
first computer message in 1969. The message was “lo.” The
message was supposed to be “login,” but the system crashed after
o. (Wikipedia, ARPANET
[as of Sept. 15, 2021],
archived at (ARPANET).) “As
UCLA computer scientist Leonard Kleinrock later put it, the
internet had just uttered its first word, lo, ‘as in “lo and
behold.” ’ ” (Jim Newton, Man of Tomorrow: The Relentless Life
of Jerry Brown (2020) p. 124.)
Elizabeth J. Feinler began a name directory in the 1970s
when the ARPANET network was tiny. (Wikipedia, Elizabeth J.
Feinler [as
of Sept. 15, 2021], archived at .)
In mid-1975, for instance, ARPANET connected only 57
computers. (ARPANET, supra.) As the internet grew, it became
increasingly unwieldy to index this directory by hand, so creators
invented new ways for assigning internet names. (See
Wikipedia, Internet Assigned Numbers Authority
[as of Sept. 15, 2021], archived at .)
In the late 1990s, an agency within the U.S. Department of
Commerce proposed privatizing the work. In response, in 1998,
ICANN contracted with the Department of Commerce.
(Wikipedia, ICANN [as of
Sept. 15, 2021], archived at .)
ICANN is a nonprofit corporation organized under California law.
6
It is headquartered in Los Angeles and has offices around the
world. In 2016, ICANN and the Department of Commerce agreed
to end governmental oversight of ICANN. (Ibid.; ICANN,
Contact [as of Sept. 15, 2021],
archived at .)
Today, ICANN professes to be a nongovernmental
organization serving the global purpose of bringing international
stakeholders together to create internet policies. (See ICANN,
Get Started [as of Sept. 15,
2021], archived at .) Its articles
of incorporation direct ICANN to work for the benefit of the
internet community as a whole.
ICANN’s mission is “to coordinate, at the overall level, the
global Internet’s system of unique identifiers, and in particular to
ensure the stable and secure operation of the Internet’s unique
identifier systems.” Top-level domain names are among the
unique identifiers ICANN coordinates.
The parties agree ICANN now is a self-governing
organization operating on a multi-stakeholder policy-making
model. Business interests, government interests, public policy
interests, and academics have ICANN representatives.
ICANN has three main parts:
● the ICANN board,
● the ICANN staff, and
● the ICANN community.
We thumbnail these three parts.
The ICANN board governs and performs oversight. It
currently has 20 members with backgrounds in more than a
dozen countries. (ICANN, ICANN Board of Directors
[as of
7
Sept. 15, 2021], archived at .) In
2003, the board established a Board Governance Committee,
which is a seven-person subset of the 20-person board. (See
ICANN, Board Governance Committee
[as of Sept. 15, 2021], archived at
.)
The ICANN staff now numbers 140 employees. (ICANN
Wiki, ICANN [as of Sept. 15,
2021], archived at .) A Chief
Executive Officer heads the group.
The ICANN community includes diverse organizations
described in ICANN’s bylaws. Among these are advisory
committees like the At-Large Advisory Committee, the Security
and Stability Advisory Committee, and—of particular pertinence
to this case—the Governmental Advisory Committee.
The Governmental Advisory Committee played an
important role in this saga. It has over 150 members. The
committee is composed of representatives and organizations from
around the world. Members include nations, like Afghanistan,
Albania, Antigua and Barbuda, Argentina, and so on. Other
members are intergovernmental organizations like the African
Telecommunications Union, the African Union Commission, the
Asia Pacific Telecommunity, the Caribbean Telecommunications
Union, and so forth. (See ICANN, About the GAC: GAC
Membership [as of Sept.
15, 2021], archived at .)
The Governmental Advisory Committee’s mandate is to
consider and advise about ICANN’s activities as they relate to
concerns of government, particularly where ICANN’s policies
8
may interact with law and international agreements or may
affect public policy issues.
The Governmental Advisory Committee is independent of
ICANN in the sense that ICANN does not appoint its members;
rather, governments and intergovernmental entities apply to the
committee for membership. Neither ICANN staff nor ICANN
board members are on the Governmental Advisory Committee.
This committee maintains a website. (See ICANN, About the
GAC [as of Sept. 15, 2021], archived
at .)
DotConnect takes a partisan and negative view of the
Governmental Advisory Committee, which advised against
DotConnect in this case. DotConnect argues the Committee’s
membership “is unregulated and open to ‘national governments
and distinct economies as recognized in international fora,’ which
makes it an exceedingly political body.” DotConnect charged the
Committee has no distinct rules, limited public records, fluid
definitions of membership and quorums, and unfair procedures.
There has been no general judicial or arbitral validation of
DotConnect’s indictments, but the arbitrators in this case were
critical of the opaque nature of the Committee’s decisionmaking.
They ruled this opacity was inconsistent with ICANN’s internal
commitment to transparency. We will describe this arbitral
finding in more detail. But first we relate the origin of the rivalry
for .africa between DotConnect and ZA.
B
We recount DotConnect’s and ZA’s competition for the
.africa name. For clarity, we split the contest into five phases:
(1) the dispute in Africa; (2) events at ICANN; (3) the arbitration;
(4) ICANN’s response to the arbitration; and (5) the case in court.
9
1
The dispute began in Africa.
According to Bekele, in 2006 she conceived the idea for the
.africa name. She thought there should be such a continental
name to correspond with existing suffixes like .asia for Asia. The
.africa project became her “personal dream.” Bekele created
DotConnect in 2008 to pursue rights to the .africa suffix.
DotConnect approached the African Union Commission for
support. According to Bekele, before she arrived, none of the
Commission’s officials was aware of the possibility of .africa.
Nobody there knew about ICANN before Bekele told them about
it.
The African Union Commission’s initial position was to side
with Bekele. On August 27, 2009, the chair of the African Union
Commission wrote to support DotConnect’s plan to seek the
.africa name from ICANN.
This support, however, was short lived: Bekele’s initiative
triggered competition. According to her, “As soon as it became
more widely known within the African Internet community that
the [African Union Commission] was interested in supporting
[DotConnect’s] initiative to apply for a .AFRICA [top level domain
name], however, other parties recognized the potential for
.AFRICA and began to vie for the [African Union Commission’s]
support.”
Bekele was “troubled by the lengths” some of her
competitors went to in their efforts to discredit DotConnect.
Bekele’s competitors evidently outmaneuvered her. On
April 16, 2010, the African Union Commission withdrew its
support for DotConnect and, in Bekele’s view, became her rival.
10
The African Union Commission revoked its endorsement of
DotConnect in favor of what it called an open selection process to
identify an applicant the Commission would back. Bekele
interpreted this to mean the Commission would identify and
select its own proxy, which would not be DotConnect.
Bekele said the African Union Commission’s 2010 reversal
was “shocking” to her. She protested the reversal, writing that
the endorsement was “unfairly withdrawn.” Bekele insisted the
original endorsement by the African Union Commission “remains
valid.” Bekele wrote she was the victim of a “conspiracy” and a
“secret cabal.”
From 2010 through to this appeal, Bekele has continued to
deny the validity of the African Union Commission’s 2010
reversal. In her opening appellate brief, for instance, DotConnect
continues to treat the African Union Commission’s 2009 letter as
though it remains in effect, despite the 2010 reversal.
The African Union Commission’s 2010 selection process
requested proposals. DotConnect boycotted the process, claiming
the African Union Commission had predetermined its outcome—
a claim that no independent body has substantiated. In another
unsubstantiated accusation, Bekele said this ostensibly open
competition was merely a “sham.”
ZA, however, did respond to the African Union
Commission’s request for proposals. ZA maintains the open bid
process was legitimate, there was no fraud or conspiracy between
ZA and the African Union Commission, and ZA competed fairly
at all times. No independent body has validated these claims
either.
As the lone applicant, ZA prevailed.
11
ZA now had the African Union Commission’s backing to
apply to ICANN; DotConnect had lost this backing.
ZA and DotConnect both went to work preparing their
applications to ICANN.
2
We shift from Africa to ICANN.
ICANN decided to expand the number of available internet
names and so created its “New gTLD Program.” (The acronym
“gTLD” stands for “generic top-level domain” name.) ICANN
spent years planning for this wide-ranging name expansion.
Bekele and many other ICANN participants provided feedback
during this planning stage.
ICANN created a committee to manage the process of
creating and assigning these new names. According to ICANN’s
website, in 2012 its board established the New gTLD Program
Committee and delegated decisionmaking authority for activities
related to the New gTLD Program to this committee. (ICANN,
New gTLD Program Committee
[as of Sept. 15, 2021], archived at
.)
In June 2012, ICANN published a 300-page guidebook for
applicants to ICANN’s new program. Ultimately this program
would result in 1,200 new top-level domain names, like .shop and
.osaka. .Africa was to be one of these new names.
ICANN set criteria for geographic names like .africa. The
successful applicant had to have the backing of 60 percent of the
governments in the geographic region. ICANN sought to give
pertinent governments a say in the process and to require
12
applicants to garner more than majority support for any specific
application.
ICANN invited interested parties to apply to become the
“registry operator” for the new generic top-level domain names
ICANN was proposing. ICANN required applicants to agree to a
release and to covenant not to sue ICANN. This litigation waiver
would become important later on.
Once designated a registry operator, a party then would
have the right to sell subscriptions to consumers for domain
names within the generic top-level domain name. This is the
right DotConnect and ZA sought to win from ICANN. According
to DotConnect, the right to control a top-level domain is “highly
valuable commercially.”
DotConnect applied to ICANN in March 2012, and ZA
applied in June 2012.
As we have seen, ZA had the African Union Commission’s
current support. DotConnect had the Commission’s defunct 2009
support, which the Commission had revoked in 2010.
DotConnect continued to ignore the 2010 revocation and to
insist the African Union Commission still supported DotConnect.
DotConnect took a similar stance about the United Nations
Economic Commission for Africa, despite the fact this entity said
it was “not qualified to issue a letter of support for a prospective
applicant” to ICANN.
Bekele protested to ICANN that two of its board
members—Mike Silber and Chris Disspain—had disqualifying
conflicts of interest. ICANN’s Ombudsman Chris LaHatte
rejected this protest.
In April 2013, ICANN’s Governmental Advisory Committee
met in Beijing, China to consider a range of matters. In its so-
13
called Beijing Communiqué of April 11, 2013, the Governmental
Advisory Committee wrote to ICANN with advice affecting
dozens of applications. (Available at
[as
of Sept. 15, 2021], archived at ;
and [as of Sept. 15, 2021], archived at
.)
One item of the Governmental Advisory Committee’s
consensus advice was that ICANN should not proceed with
DotConnect’s application.
The Committee’s advice was summary and unelaborated:
“The [Governmental Advisory Committee] advises ICANN that it
is the consensus of the [Governmental Advisory Committee] that
a particular application should not proceed.” Context showed “a
particular application” was DotConnect’s application.
The Committee provided no rationale or explanation for its
advice. The chairperson of the Governmental Advisory
Committee later would describe the situation as “creative
ambiguity”: “We leave things unclear so we don’t have conflict.”
DotConnect objected to the Governmental Advisory
Committee’s Beijing decisionmaking, charging it was the result of
irregularities and conflicts of interest.
On June 4, 2013, ICANN’s New gTLD Program Committee
posted a notice accepting the Governmental Advisory
Committee’s advice to stop processing DotConnect’s application.
In June 2013, ICANN’s board voted to adopt the advice of the
Governmental Advisory Committee. As a result, the ICANN staff
told DotConnect ICANN had stopped processing its application.
14
On July 2, 2013, the African Union and the African Union
Commission wrote to ICANN in support of ZA’s predecessor
entity. This letter stated the African Union Commission
“represents the interests and support of 54 African governments.”
Morocco wrote separately to support ZA’s corporate predecessor.
The African Union Commission specifically objected to
DotConnect’s application. Sixteen individual African nations
filed similar protests against DotConnect with ICANN.
This apparently meant all 55 nations in Africa supported
ZA’s application to ICANN for the .africa name. None supported
DotConnect.
DotConnect requested reconsideration by the ICANN Board
Governance Committee, which denied this request on August 1,
2013.
Bekele thought ICANN’s rejection of DotConnect’s
application was unfair. She named people she said had been
involved in the .africa decision process who, according to Bekele,
had acted with conflicts of interest, had acted inappropriately or
unethically, or had discharged their duties unsatisfactorily.
These people included:
● Anne-Rachel Inné (“inappropriately and
unethically”),
● Pierre Dandjinou (part of a “contrived” agenda),
● Moctar Yedaly (“attempted to recant” endorsement),
● Nii Quaynor (“deeply conflicted”),
● Alice Munyua (“very inappropriate for her to be
involved”),
● Chris Disspain (“might be deeply conflicted”),
● Mike Silber (“inappropriate and unethical”),
● Chris LaHatte (“inappropriate”), and
15
● Alain Pellet (“very inappropriate,” “terribly
inappropriate,” “completely inappropriate”).
Bekele and DotConnect sought arbitral review of ICANN’s
decision.
3
The next phase was a two-year international arbitration,
which ICANN terms its Independent Review Process. ICANN’s
website and bylaws do not label this process an “arbitration,” but
the arbitrators ruled it an arbitration in all but name. We use
the name: arbitration.
a
DotConnect initiated the arbitration in October 2013. The
International Centre for Dispute Resolution, which is the
international division of the American Arbitration Association,
conducted the process.
The Independent Review Panel had three arbitrators.
Each party selected one. The International Centre for Dispute
Resolution selected the third.
DotConnect chose Dr. Catherine Kessedjian, the Deputy
Director of the College of Paris, Professor of Law, and the former
Deputy Secretary General of the Hague Conference on Private
International Law.
ICANN picked Richard C. Neal, a retired California Court
of Appeal justice. When Neal passed away, ICANN replaced him
with William Cahill, a retired California Superior Court judge.
The International Centre for Dispute Resolution selected
Babak Barin, an experienced Canadian commercial litigator and
arbitrator, to chair the panel.
This arbitration included discovery, briefing, the exchange
of witness declarations, and a series of interim orders. It
16
involved a two-day transcribed hearing at which three live
witnesses testified under oath. The arbitration culminated in a
63-page final ruling on July 9, 2015.
In this arbitration, DotConnect won seven procedural
victories and two substantive victories, which we describe.
b
DotConnect’s procedural victories were on the following
contested points.
i. The arbitrators stayed ICANN’s assignment of .africa
during the arbitration.
ii. DotConnect was awarded extensive document
discovery.
iii. DotConnect was granted live witness testimony.
iv. DotConnect was entitled to supplemental briefing.
v. The arbitrators declared their ruling was binding on
ICANN.
vi. The standard of review of ICANN’s decisionmaking
was de novo.
vii. As the prevailing party, DotConnect won a cost
award against ICANN. This award was $198,046.04,
which ICANN paid to DotConnect.
During the arbitration, DotConnect repeatedly told the
arbitrators it had signed an extensive and binding waiver that
barred all recourse to courts, and therefore the panel should
grant DotConnect these seven procedural benefits.
The panel accepted DotConnect’s arguments. (The second
italics are ours.)
“The [Independent Review Panel] is the only independent
third party process that allows review of board actions to ensure
their consistency with the Articles of Incorporation or Bylaws. . . .
17
[T]he avenues of accountability for applicants that have disputes
with ICANN do not include resort to the courts. Applications for
gTLD delegations are governed by ICANN’s Guidebook, which
provides that applicants waive all right to resort to the
courts . . . .”
c
DotConnect won two arbitral victories on the merits.
i
First, the arbitrators disapproved of ICANN’s
decisionmaking. The panel ruled ICANN, rather than having
merely deferred to the Governmental Advisory Committee’s
advice, should have investigated the matter further.
The arbitrators explained the basis for this ruling. The
Governmental Advisory Committee “did not act with
transparency or in a manner designed to insure fairness.” The
arbitrators said the Governmental Advisory Committee
apparently “made its decision without providing any rationale
and primarily based on politics and not on potential violations of
national laws and sensitivities.” Then ICANN’s New gTLD
Program Committee merely accepted the Governmental Advisory
Committee’s unexplained advice. DotConnect moved for
reconsideration of the New gTLD Program Committee’s decision,
but the Board Governance Committee recommended to the New
gTLD Program Committee that it deny DotConnect’s request for
reconsideration. On August 13, 2013, the New gTLD Program
Committee accepted the Board Governance Committee’s
recommendation without further consideration.
A flaw, according to the arbitrators, was that ICANN’s
founding documents required the Board Governance Committee
to conduct a “meaningful review” of the New gTLD Program
18
Committee’s decision to accept the advice of the Governmental
Advisory Committee.
This point, “combined with the fact that [DotConnect] was
never given any notice or an opportunity in Beijing or elsewhere
to make its position known or defend its own interests before the
[Governmental Advisory Committee] reached consensus on the
[Governmental Advisory Committee’s] Objection Advice, and that
the Board of ICANN did not take any steps to address this issue,
leads this [Arbitration] Panel to conclude that both the actions
and inactions of the Board with respect to the application of
[DotConnect] relating to the .AFRICA gTLD were not procedures
designed to insure the fairness required by [ICANN] Article III,
Sec. 1 above, and are therefore inconsistent with the Articles of
Incorporation and Bylaws of ICANN.”
The bottom line for the arbitrators was that “both the
actions and inactions of the Board with respect to the application
of [DotConnect] relating to the .AFRICA gTLD were inconsistent
with the Articles of Incorporation and Bylaws of ICANN.”
In a nutshell, the arbitrators decided the Beijing
Communiqué was too summary to be consistent with ICANN’s
commitment to openness, so ICANN should not have simply
accepted the recommendation but instead should have
investigated its basis.
ii
Second, the arbitrators decided they had power to give
ICANN direction on what to do next, which they exercised by
telling ICANN to continue to refrain from delegating the .africa
name and to permit DotConnect’s application to proceed through
the remainder of the application process.
19
d
Although it prevailed in the arbitration, DotConnect did
not emerge from the arbitration as the complete victor in all
respects.
The arbitrators did not award rights to the .africa name to
DotConnect. DotConnect did not request such a ruling.
The arbitrators also qualified their ruling. They wrote they
were not delving into or deciding about DotConnect’s other
criticisms of ICANN. For instance, the arbitrators made no
findings, one way or the other, about Anne-Rachel Inné, Pierre
Dandjinou, Moctar Yedaly, Nii Quaynor, Alice Munyua, Chris
Disspain, Mike Silber, Chris LaHatte, or Alain Pellet. Nor did
the arbitrators validate or comment upon DotConnect’s
assertions that both the African Union Conference and ICANN
had shown unfair favoritism or had preselected ZA.
DotConnect’s win also was qualified in other ways.
There was the matter of timing. DotConnect asked the
arbitrators to order ICANN to give DotConnect 18 months to
obtain support of 60 percent of the relevant governments—or
simply to declare DotConnect already had satisfied that 60
percent requirement. The arbitrators did not grant this relief.
The arbitrators did not make delay or time limits part of their
ruling, which left ICANN free to act with dispatch after the
ruling.
Good faith also was an issue. In this appeal DotConnect
accuses ICANN of deception, of rigging the process, and of using
“every trick in the book” to strip DotConnect of “basic procedural
protections.” The arbitrators found, however, ICANN had acted
in good faith. They had “no doubt” on this point.
20
4
Events now shifted back to ICANN.
On July 16, 2015, ICANN’s board voted to obey the
arbitrators’ order. The board decided to refrain from delegating
the .africa name, to permit DotConnect to proceed through the
rest of the selection process, and to reimburse DotConnect for the
arbitration costs.
The African Union Commission again wrote to ICANN to
reiterate its support for ZA as the only applicant “officially
endorsed and supported by the [African Union Commission] and
hence African member states.” The letter continued that the
African Union Commission did not support DotConnect. Despite
the Commission’s initial support, the Commission later withdrew
that support, with the “full knowledge” of DotConnect.
ICANN resumed evaluating DotConnect’s application
where it had left off: at the Geographic Names Panel evaluation.
As was common with applications, the Geographic Names Panel
posed questions to DotConnect.
DotConnect responded it would not revise its letters of
support or offer new letters because it insisted its existing letters
sufficed.
The Geographic Names Panel concluded DotConnect’s
letters of support were insufficient and therefore DotConnect had
failed the Panel’s evaluation.
ICANN then invited DotConnect to participate in its
extended evaluation process, and DotConnect did pursue this
process. DotConnect again refused, however, to revise or
supplement its letters of support. The Geographic Names Panel
concluded DotConnect’s application did not pass the Panel’s
review.
21
At this point, ICANN procedures permit disappointed
applicants to file a request for reconsideration. If an applicant
seeks further review beyond that point, ICANN allows the
applicant further recourse to its Independent Review Process.
Applicants for .hotels, .charity, and .radio, for example, have
followed this procedure.
DotConnect declined to request either reconsideration or
independent review within the auspices of ICANN. Rather,
DotConnect went to court.
5
On January 20, 2016, DotConnect sued ICANN in the Los
Angeles Superior Court. ZA intervened. DotConnect’s first
amended complaint included 11 counts against ICANN and ZA.
The trial court held a three-day bench trial on ICANN’s
defense of judicial estoppel. The court rendered judgment and its
final 12-page statement of decision on October 3, 2019.
DotConnect filed two appeals it moved to consolidate. The
Court of Appeal granted this motion on July 14, 2020.
II
We affirm the judgment in all respects.
A
Judicial estoppel bars a party from gaining an advantage
by taking one position and then seeking a second advantage by
taking an incompatible position. The goals are to maintain the
integrity of the judicial system and to protect parties from
opponents’ unfair strategies. The doctrine is discretionary and
has five prerequisites: (1) The same party has taken two
positions in (2) judicial or quasi-judicial administrative
proceedings; (3) the party was successful in asserting the first
position (that is, the tribunal adopted the position or accepted it
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as true); (4) the two positions are totally inconsistent; and (5) the
party did not take the first position as a result of ignorance,
fraud, or mistake. (People v. Castillo (2010) 49 Cal.4th 145, 155.)
We apply California law but observe federal law contains a
similar doctrine. (See People v. Melendez (2016) 2 Cal.5th 1, 23
[“in some circumstances, a party might be estopped from
changing positions in litigation to gain an advantage. (See
generally New Hampshire v. Maine (2001) 532 U.S. 742, 749–750
[149 L.Ed.2d 968, 121 S.Ct. 1808].)”].)
We review the trial court’s factfinding for substantial
evidence. We independently review whether judicial estoppel is
proper on given facts. If the elements for judicial estoppel are
present, whether to apply the doctrine is within the trial court’s
discretion, which we review for an abuse of discretion. (Miller v.
Bank of America, N.A. (2013) 213 Cal.App.4th 1, 10.)
B
The trial court correctly applied judicial estoppel.
DotConnect’s actions satisfy the doctrine’s elements.
First, DotConnect took two contrary positions. It told the
arbitrators on the Independent Review Panel it could not sue in
court. DotConnect then sued in court.
Second, DotConnect took these positions in quasi-judicial
and judicial settings. The first proceeding effectively was a
quasi-judicial arbitration. It was before the international arm of
the American Arbitration Association. The panel was a
traditional arbitral panel with distinguished and experienced
international arbitrators. The procedures were legalistic; there
were lawyers all around, and they took lawyerlike actions: they
engaged in procedural debate, discovery, briefing, and the oral
and written presentation of testimony. There were formalized
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exhibits and the rules of evidence. The panel rendered a lengthy
written decision that recited the parties’ contentions, examined
the evidence, and reasoned its way to legalistic conclusions on the
basis of proofs and arguments. This setting was quasi-judicial.
Third, DotConnect used its initial position—“we cannot sue
in court”—to persuade the panel to award DotConnect seven legal
victories, as noted. The panel declared DotConnect the prevailing
party and required ICANN to pay its costs.
Fourth, DotConnect’s positions are totally inconsistent.
“We cannot sue in court” is the opposite of “we can sue in court.”
Fifth, DotConnect did not take its initial position as the
result of fraud, ignorance, or mistake. Able counsel represented
DotConnect throughout. The record shows DotConnect’s lawyers
were well-informed and were thinking ahead.
Finally, the trial court had an ample basis to decide, in its
discretion, to apply the doctrine to this case. This decade of
disputation was costly and delayed the use of something valuable
to the worldwide public. Evidence suggested “the ongoing delay
in the delegation of .africa is depriving the people of the African
continent of an important opportunity to expand internet domain
name capabilities. The .africa domain name would add brand
value to the continent and would provide a platform that
connects products, businesses, and individuals that have an
interest in Africa.”
Prolonging rivalry over name rights is undesirable. The
trial court did not abuse its discretion.
C
DotConnect’s contrary arguments carry no force.
The record refutes DotConnect’s claim its positions have
been consistent. DotConnect told the panel it could not sue in
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court. Its statements were repeated and unqualified. The panel
accepted these assertions and used them in its legal reasoning,
which declared DotConnect the prevailing party. Then
DotConnect sued in court. That reversal was complete.
DotConnect makes an incorrect argument about context. It
says it made its statements about not suing in court before the
panel ruled and it now is suing about events after the panel
ruled, so the context is different and thus the meanings are
different.
DotConnect is right to say courts interpreting text must
consider context. (E.g., RMR Equipment Rental, Inc. v.
Residential Fund 1347, LLC (2021) 65 Cal.App.5th 383, 395–
396.) Context always informs text. This holds equally in the
doctrine of judicial estoppel. (E.g., Levin v. Ligon (2006) 140
Cal.App.4th 1456, 1470 (Levin).)
This point does not aid DotConnect. The context for its
statements was its reference to the litigation waiver it signed
when it applied for the .africa name. The text of that litigation
waiver was unequivocal, unconditional, and unlimited. It
remained so throughout the arbitration. As we have noted, and
again with our italics, DotConnect convinced the arbitrators to
write that applicants like DotConnect had “waive[d] all right to
resort to the courts.” The relevant context has remained the
same. This defeats DotConnect’s argument.
DotConnect in oral argument noted that, after it filed suit
in court, it attacked the breadth of this waiver and met with
some success before a judge who then retired. The superior court
assigned the case to a new trial judge, who held a bench trial and
ruled for ICANN on the basis of judicial estoppel. The pretrial
rulings in the trial court do not affect the substance of this
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analysis. The key is DotConnect told the arbitrators one
unqualified thing and, having benefited from its argument,
reversed field and did the opposite: DotConnect sued in court.
DotConnect cites irrelevant holdings. (See State Farm
General Ins. Co. v. Watts Regulator Co. (2017) 17 Cal.App.5th
1093, 1102 [“There is no ‘unfair strategy’ in consenting to
arbitration in one case and not in another.”]; Montegani v.
Johnson (2008) 162 Cal.App.4th 1231, 1239 [“when that
‘admission’ was made, it was correct”]; Daar & Newman v. VRL
Internat. (2005) 129 Cal.App.4th 482, 486, 490–491 [case did not
concern a single litigation waiver, but rather two different
lawsuits, one that concerned a contract with a California party
and one that did not]; Kitty-Anne Music Co. v. Swan (2003) 112
Cal.App.4th 30, 35–36 [party successfully opposing a summary
judgment motion is not estopped from moving for summary
judgment based upon the same evidence]; Bell v. Wells Fargo
Bank (1998) 62 Cal.App.4th 1382, 1387–1388 [statements that
sickness rendered man disabled and unable to perform his work
did not estop him from seeking a reasonable accommodation for
that work]; Prilliman v. United Air Lines, Inc. (1997) 53
Cal.App.4th 935, 953–964 [receiving benefits for disability did not
estop pilot from contending he could perform nonflight work]; Ng
v. Hudson (1977) 75 Cal.App.3d 250, 258 [the statement that a
person suffered no pain or disability before an accident did not
estop a request for an instruction about aggravation of a
preexisting condition because preexisting conditions, if dormant
or inactive, do not necessarily involve pain or disability],
overruled on another ground in Soule v. General Motors Corp.
(1994) 8 Cal.4th 548.)
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On a different point, DotConnect offers neither holdings
nor logic for its incorrect suggestion that judicial estoppel applies
only when the party’s inconsistent positions are factual in
character. (Cf. Levin, supra, 140 Cal.App.4th at pp. 1472–1473
[“Levin argues that [Cleveland v. Policy Management Systems
Corp. (1999) 526 U.S. 795] establishes that judicial estoppel
cannot be applied when the inconsistency is not a purely factual
statement but also involves a legal conclusion. This is a
misreading of the case.”]; see also id. at p. 1473.)
DotConnect’s citations show that courts commonly apply
judicial estoppel when a party makes inconsistent factual
assertions. These citations do not show the doctrine exempts
legal assertions. (See ABF Capital Corp. v. Berglass (2005) 130
Cal.App.4th 825, 832; Tuchscher Development Enterprises, Inc. v.
San Diego Unified Port District (2003) 106 Cal.App.4th 1219,
1245; California Amplifier, Inc. v. RLI Ins. Co. (2001) 94
Cal.App.4th 102, 118.)
Even as DotConnect concedes the Independent Review
Process “had all the hallmarks of an international arbitration,”
DotConnect maintains the arbitration was not a quasi-judicial
forum. DotConnect presses two faulty arguments on this count.
First, DotConnect argues ICANN’s independent review
process was not binding on both parties, so the process was not
quasi-judicial, and therefore judicial estoppel does not apply.
Without reaching the question of whether a process must be
binding to be quasi-judicial, we note the trial court found ICANN
accepted the independent review panel’s ruling. The fact the
ICANN Board voted to accept the panel’s ruling is not proof that
ruling was not binding. The ruling was effectively binding:
ICANN accepted it. This argument fails.
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Second, DotConnect suggests the independent review
process was not quasi-judicial because it offered no opportunity
for judicial review. A major point of arbitration, however, is to
avoid the judicial process. To support this claim, moreover,
DotConnect cites no cases dealing with judicial estoppel. (See
Risam v. County of Los Angeles (2002) 99 Cal.App.4th 412, 418–
423 [no judicial estoppel holding]; Bray v. Internat. Molders &
Allied Workers Union (1984) 155 Cal.App.3d 608, 613–618 [no
judicial estoppel holding]; Powers v. Northside Independent
School Dist. (W.D. Tex., Jan. 27, 2016, No. A-14-CA-1004-SS)
2016 WL 8788185 [no judicial estoppel holding].) This argument
falters for want of authority.
DotConnect protests its earlier position never succeeded,
which negates, it contends, the third element of judicial estoppel,
which requires the tribunal to have adopted the position or
accepted it as true. This argument is in error.
The trial court’s findings here again are controlling. The
trial court found that, as a result of DotConnect’s assertion it
could not sue ICANN in court, DotConnect persuaded the
arbitrators to favor DotConnect with seven substantial victories.
Recall DotConnect’s seven victories were emergency interim
relief, document discovery, extended briefing, live witness
testimony, a de novo review standard, a declaration the ruling
was binding, and a cost award. Substantial evidence supports
this finding.
DotConnect’s first position—that it could not sue in court—
did persuade the arbitration panel repeatedly to rule for
DotConnect on a range of significant issues. DotConnect’s protest
is not well-founded. (See Jackson v. County of Los Angeles (1997)
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60 Cal.App.4th 171, 183 [explaining success factor is met if
“tribunal adopted the position or accepted it as true”].)
DotConnect argues it did not take its first position in bad
faith. Judicial estoppel, however, does not require bad faith. The
trial court found DotConnect, when arguing the litigation waiver
was effective, was not arguing as a result of ignorance, fraud, or
mistake. In fact, the trial court found DotConnect maintained a
“consistent strategic position.” DotConnect took this “consistent
strategic position” to support its requests the arbitrators rule in
its favor on the seven procedural issues.
This consistent strategic position was not the product of
ignorance, fraud, or mistake. (See Bucur v. Ahmad (2016) 244
Cal.App.4th 175, 188 [appellants “made no showing” that their
first position, a decision they made “with the knowledge and
consent of their former attorney, was the result of fraud,
ignorance, or mistake”].) The trial court’s finding was proper by
law.
DotConnect charges the trial court generally abused its
discretion by estopping DotConnect from altering its position on
its litigation waiver. The court’s decision was, however,
reasonable. Neither did the trial court err in awarding costs
against DotConnect.
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DISPOSITION
We affirm the judgment in all respects and award costs to
the respondents.
WILEY, J.
We concur:
GRIMES, Acting P. J.
OHTA, J. *
* Judge of the Los Angeles Superior Court, assigned by the
Chief Justice pursuant to article VI, section 6 of the California
Constitution.
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