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03 Mar 2008

More on the Front Running Class Action Suit ICANN

Several people pointed out that although the suit still hasn't appeared in PACER, copies of the complaint are available online, including this one at Lextext. Having read it, I'm rather underwhelmed.

After the usual lengthy enumeration of alleged misdeeds, the complaint charges NSI with fraudulent concealment, and unjust enrichment, while charging ICANN with aiding and abetting fraudulent concealment.

I do not purport to be a lawyer (nor do I usually play one on the net), but it's hard to see how the facts, which are not in serious dispute, would support any of these charges. Fraudulent concealment generally involves hiding important information when entering into a contract, e.g., not mentioning your three prior heart attacks when you get life insurance. But at the time the front running happens, when you search for a domain on NSI's web site, there's no contract, and you are entirely free not to buy the domain you searched for if you don't like the price. Also, NSI now discloses on their home page that they may reserve the domains people search for, which means that even if they used to conceal something, they don't do it any more.

The unjust enrichment is slightly more plausible but still doesn't fit the facts very well, since unjust enrichment typically occurs when the defendant was overpaid by accident, and the only remedy is restitution, returning the overpayment. If I were looking for a charge to fit these facts, I'd claim fraud or tortious interference with the registrant's ability to buy from other registrars, but since I'm not a lawyer, what do I know?

Another interesting aspect of this the lead plaintiff, Chris McElroy. He is a colorful character from Miami, a long term ICANN participant, who calls himself Namecritic, runs a blog for hire service and has attracted a certain amount of criticism of his own. But his long involvement with ICANN and Internet domains makes him an unusually poor lead defendant -- how can a guy who's been doing this for a decade turn around and claim he has no idea how registrars work?

This suit is unlikely to go anywhere, but assuming it survives the certain defense motion for summary judgement, the discovery will be interesting.

Feb 29 update: Mr. McElroy posted an outraged response to the mirror of this item at CircleID. Looks like I struck a nerve.


  posted at: 19:41 :: permanent link to this entry :: 0 comments
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