In early August, the D.C. Circuit refused to allow victims of terror attacks to take control of the Internet domain names of Iran, North Korea, and Syria as a means of satisfying previous money judgments awarded to the victims. In refusing this Internet domain seizure, the D.C. Circuit expressed concern about a “doomsday scenario” that could fundamentally disrupt the stability and accessibility of the Internet to the detriment of the general public. With this ruling, the D.C. Circuit acted with a degree of caution, mindful not to create waves amidst the global nature of Internet regulation.

Factual Background

Victims of terror attacks had previously won money judgments against Iran, North Korea, and Syria for claims brought under exceptions to the Foreign Sovereign Immunities Act (“FSIA”). In order to satisfy the judgment awarded to them, the victims attempted to seize control of the country-code top level domain names (“ccTLD”) and Internet Protocol addresses from these three countries. Simply stated, ccTLDs are Internet suffixes like “.com,” or in this case: “.ir” [Iran]; “.sy” [Syria]; “.kp” [North Korea]. The victims hoped to sell or license the ccTLDs and collect the proceeds. To do this, the victims served a writ of attachment on the Internet Corporation for Assigned Names and Numbers (“ICANN”), a non-profit that manages Internet domain names globally and protects the stability and interoperability of the Internet’s domain name system (“DNS”). ICANN moved to quash these writs. ICANN is based in California and works pursuant to a contract with the United States Department of Commerce. The global community voluntarily chooses to use ICANN as the manager of its Internet domain names.

D.C. Circuit Decision

Initially, the D.C. Circuit determined that certain victims could bring claims under the “terrorist activity” exception to the FSIA, 28 U.S.C. § 1610(g). Although the FSIA protects foreign governments from litigation in U.S. courts, there is an exception for claims based on terrorism. In such instances, a foreign state may be subject to an attachment of its property as a means of satisfying a judgment. The Court assumed, without deciding, that ccTLDs are property under the FSIA, and that Iran, North Korea, and Syria have attachable ownership interest in the ccTLDs.

Nevertheless, the D.C. Circuit rejected the victims’ writ to attach the domain names, noting that section 1610(g) of the FSIA provided it with express authority to consider and protect third party interests. Based on this authority, the Court ultimately determined that requiring ICANN to delegate foreign domain names under United States law could impair the interests of ICANN and the general public as a whole.

Specifically, the Court explained that foreign companies are not required to use ICANN for Internet domain name management. Instead, the global community allows ICANN to manage Internet domain names, and there was real concern that United States intervention with ICANN’s DNS management could cause foreign countries to defect from and form a competitor to ICANN. Scholars refer to a global ICANN defection as “splitting the root,” and they warn that it could precipitate the collapse of Internet stability. They advise that “splitting the root” could potentially yield a “doomsday scenario” for the global accessibility of Internet content, resulting in a fragmented Internet system devoid of central administration. The D.C. Circuit determined that this doomsday scenario is “not beyond imagining” and refused to grant the victims’ request to intervene with ICANN.

Takeaways

This opinion yields two immediate takeaways. First, the D.C. Circuit was reluctant to meddle with the global nature of ICANN’s Internet management. While the Court acknowledged that some scholars are skeptical as to whether the global community would actually defect from ICANN, it refused to challenge the status quo and rested its holding on its determination that the likelihood of the doomsday scenario was “not beyond imagining.”

Second, the D.C. Circuit’s caution coincides with a recent shift away from American involvement with ICANN. As some countries like China and Russia have bemoaned the United States’ involvement with ICANN, the United States has acted to limit its involvement. This summer, the United State Department of Commerce announced its support for plans to transition the United States government’s stewardship role away from ICANN’s Internet DNS by means of a privatization process. The D.C. Circuit opinion appears to continue this hands-off trend.