Stakeholders Eye State AGs' Last-Minute Suit to Delay IANA Transition

Paxton and the other attorneys general claim NTIA, the Department of Commerce and the full U.S. government violated the First Amendment, the Fifth Amendment’s Property Clause and the Administrative Procedure Act by deciding to allow the move to proceed. The suit named Secretary of Commerce Penny Pritzker and NTIA Administrator Larry Strickling. Arizona Attorney General Mark Brnovich, Nevada Attorney General Adam Laxalt and Oklahoma Attorney General Scott Pruitt joined Paxton. NTIA didn’t comment.

The attorneys general are seeking a temporary restraining order (TRO) to delay the IANA switchover from occurring Saturday, claiming U.S. officials’ decision to proceed was made “without statutory authority to do so and in violation of the Property Clause of the U.S. Constitution and the First Amendment.” The complaint also asks District Judge George Hanks to enjoin the federal government from proceeding “and from otherwise relinquishing its exclusive rights to approve changes to the root zone file.” A hearing on the TRO application is set for 1:30 p.m. Friday.

NTIA’s transition decision violates the First Amendment because ICANN is “a private party without ‘narrow, objective, and definite standards to guide the licensing authority,’” the attorneys general said in their complaint (in Pacer). “Once NTIA relinquishes control, nothing prevents ICANN from acting, either within or outside of its bylaws, in a manner that could severely restrict free speech.” The U.S. government “generally has authority to permit use of a forum pursuant to a license, but the Supreme Court has repeatedly invalidated licensing regimes that place ‘unbridled discretion’ in the hands of an entity regulating the public forum as ‘a prior restraint [that] may result in censorship,’” the suit said.

The handoff decision violates the Fifth Amendment’s Property Clause because the clause’s authority “extends beyond real property and includes intangible” rights and property, which include the authoritative root zone file, the domain name system, “the exclusive right to approve changes to the root zone file, and the contracts NTIA administers in exercising control over them,” the suit said. “By allowing the [IANA contract] to lapse and relinquishing authority over the root zone file, NTIA would unconstitutionally dispose of government property without an affirmative act of Congress.” A GAO report this month said the transition won't result in a transfer of U.S. government property. The GAO said it’s doubtful either the root zone file or the DNS can be considered property under “common law principles, because no entity appears to have a right to their exclusive possession or use” (see 1609130050).

NTIA lacks statutory authority to allow the switchover to occur, the suit said: NTIA failed to comply with APA notice-and-comment requirements for proposed rulemakings, since NTIA “recognized that its decision to end government oversight of the Internet amounted to formal rule making subject to the APA.” NTIA “improperly delegated” collection of comments on the transition to ICANN in an Aug. 10, 2015, request for comment, the suit said. The complaint said the transition would “tortuously interfere” with the ability of the Arizona, Nevada, Oklahoma and Texas state governments’ contracts with the General Services Administration for the states’ .gov domain names. “The sole control that the U.S. Government would have to safeguard .gov and .mil is through an exchange of letters, which are non-binding and lack the certainty of a legal contract that would guarantee U.S. control and ownership in the future," the filing said.

Internet governance lawyers gave varying opinions about whether Hanks will grant a TRO. Several said it would be easy to prove that there’s the potential for irrevocable harm given the imminent execution. Much will depend on whether the attorneys general can prove a compelling state interest in the handoff, the lawyers said. The attorneys general have the best chance to prove standing on their claims about control of the .gov top-level domain because the existing exchange of letters isn’t an “ironclad assurance” the U.S. government will permanently retain control of the TLD, said Phil Corwin, principal of e-commerce and IP law consultancy Virtualaw.

The .gov and .mil TLDs "are not going anywhere," said internet and IP lawyer Greg Shatan of McCarter & English. “That’s just not happening. I wouldn’t sneeze at the letters between NTIA and ICANN as these attorneys general have. There are systems and controls at ICANN and accountability measures in place” to guarantee continued U.S. control. “ICANN would have to violate basically every rule and system in place and would lose the domain names community’s trust” if it transferred control of .gov and .mil absent U.S. government consent, Shatan said.

The standing issue is paramount, but Hanks’ ruling on the TRO request will also depend on whether he can adequately decide the claims have a likelihood of being successfully proven, which may be difficult unless the federal government can file a response before NTIA’s contract with ICANN expires Friday evening, Corwin said. Other arguments beyond .gov are less likely to succeed on the merits since they’ve been made repeatedly during congressional hearings on the transition and in other forums, lawyers said. The property issue is particularly unlikely to stand up to scrutiny given the GAO report, which likely shot down that line of argument, Corwin said.

“My hunch is that the judge won’t grant preliminary injunctive relief,” said Rightside Vice President-Business and Legal Affairs Statton Hammock. “Some of these claims are going to go nowhere, especially the property claim,” given the GAO report, he said. The claims about APA violations are harder to handicap but “we’ve been watching NTIA’s involvement in the transition from start to finish and I can’t imagine they’ve been negligent or violated any provision of APA,” he said. Concerns about the transition process that witnesses discussed during a Senate Judiciary Oversight Subcommittee hearing earlier this month mostly focused on complaints “that ICANN wasn’t ready for the transition, that the accountability mechanisms weren’t in place,” Hammock said. “None of the witnesses were alleging administrative law violations or property law violations or First Amendment issues.”

It’s unclear whether Hanks will grant a temporary delay of the transition, but it would have been easier to prove one was needed had Congress mounted a stronger fight for a delay, said Kristian Stout, International Center for Law and Economics associate director-innovation policy. The case will depend on whether the attorneys general can prove their standing, which would have been easiest to prove on consumer protection grounds, Stout said. It’s more difficult to prove standing on federal issues, so “that issue could get in their way,” he said. A preliminary injunction doesn’t necessarily need to occur before 11:59 p.m. Friday, and could conceivably come “in the next week or two” and still result in oversight of IANA reverting back to NTIA, Stout said. “If [Hanks] finds that the transition constitutes a transfer of federal property, that property doesn’t go away just because NTIA’s contract with ICANN has lapsed.”

The lawsuit is “another cheap attempt by a fringe group to politicize the IANA transition,” Senate Communications Subcommittee ranking member Brian Schatz, D-Hawaii, said in a statement. “Congress has repeatedly rejected attempts to delay the transition. Technology and foreign policy experts from across the political spectrum agree that any delay of this transition would only empower our enemies and undermine America's commitment to keeping the internet open and free.”

Litigation “is the only way to address” serious constitutional concerns raised by the transition before President Barack Obama’s administration “takes the irreversible step of giving up America’s stewardship of the Internet,” TechFreedom President Berin Szoka said in a blog post. “If the states win, NTIA could still do a partial transition -- provided that ICANN commits to complying with the First Amendment," he said. "Only by breaking the transition into two phases would there be time to take public comment on open questions remaining” about the handoff.