Foreign Sovereign Immunities Act

Are Top-level Domains Property?

By Alex Loomis
Tuesday, January 5, 2016, 7:09 AM

On December 28, the Justice Department filed an amicus brief in Weinstein v. Islamic Republic of Iran, a case pending before the D.C. Circuit. At issue is whether country-code top-level domains are the property of those countries’ foreign governments.

In 2002, a district court found Iran liable for its role in a 1996 terrorist bombing in Jerusalem. The family of one of the victims, Susan Weinstein, brought the suit against Iran and, following the 2003 entry of default judgment, the Weinsteins moved to attach Iranian property pursuant to the Foreign Sovereign Immunities Act (FSIA) and the Terrorism Risk Insurance Act (TRIA).  FSIA permits attachment of “the property of a foreign state”; TRIA, the state’s “blocked assets.”

As Paul noted in 2014, the plaintiffs attempted to attach “.ir”, Iran’s country-code top-level domain (ccTLD).  The district court held they could not. On appeal, both parties’ briefs presumed that the ccTLD “.ir” was the Iranian government’s property; DOJ intervened to contest that assumption.

DOJ argues first that ccTLDs are not attachable “property” or “assets” under the FSIA or TRIA. Rather, ccTLDs “merely [] designat[e] . . . the national affiliation of a subset of the global Internet community,” including “millions of private businesses and individuals.”

Although the right to designate its territory “Iran” is presumably valuable to the Iranian government, no one would suggest that the name “Iran” in an atlas or a newspaper—or even official publications—is itself the “property” of the Iranian government subject to attachment by creditors.  

The Justice Department focuses primarily on the practical mechanisms of Internet governance. To support its position, DOJ points to a 1994 Internet governance document describing the Internet naming authority as a responsibility, not a property right, as well as “the actual practice under which country-code top-level domains have been established and managed.” In practice, ICANN “delegat[es]” TLD management to regional managers on the basis of whether the manager will be a “technically competent trustee of the domain on behalf of the national and global Internet communities.” In this sense, TLDs differ from second-level domains, which private parties purchase from the TLD-managers. Importantly, DOJ does treat second-level domains as property.

Furthermore, DOJ notes that “a U.S. court has no meaningful way to enforce the attachment of a country-code top-level domain” because ICANN’s Internet management role stems exclusively from the consent of the global Internet community.

As a technological matter, nothing prevents an entity outside the United States from publishing its own root zone file and persuading the operators of the Internet’s name servers to treat that version as authoritative instead.  And if that happened, any changes made to the current root file at the behest of a U.S. court would effectively become irrelevant.

And moreover, DOJ argues that any court order treating TLDs as property would threaten “the multi-stakeholder model of Internet governance” because other countries would react by “turn[ing] their backs on ICANN for good.” This risk of root zone anarchy not only eliminates any potential value for plaintiffs—who had hoped to profit from licensing Iran’s ccTLD—but also would “be devastating for ICANN.”

As an alternative argument, DOJ asserts that even if a ccTLD were property, Iran has no “ownership interest.” Rather, ICANN acts “as a trustee of the Internet’s unique names and numbers in service to all Internet users. Each local manager of a country-code top-level domain, in turn, effectively functions as the local agent of ICANN . . . .” Property held in trust cannot be attached “to satisfy the debts of the trustee or a trustee’s agent.” The government notes that both political branches have endorsed the multi-stakeholder model of the Internet underlying its property arguments.

The government argument concludes by endorsing the district court’s holding that attachment is barred by Federal Rule of Civil Procedure 69. That rule dictates that “[t]he procedure on execution . . . must accord with the procedure of the state where the court is located.” And D.C. law does not permit attachment of property held in trust to satisfy the trustee’s debt. Plaintiffs cannot alternatively argue that they are attaching the IP addresses associated with the relevant ccTLD, because regional Internet registries, not ICANN, “assign IP addresses.”

Because Supreme Court precedent instructs courts to examine past practices when conceptualizing novel property interests, DOJ’s amicus brief largely rests on the ways ICANN describes its duties and treats TLD managers. To effectively respond here, the plaintiff will need to either dispute this precedent as a method or offer evidence of different ICANN practice.

But even if the plaintiffs could do so, DOJ laces its brief with references to potential foreign policy consequences of an adverse ruling. The State Department’s acting legal advisor and the General Counsel to the Commerce Department, together with representatives from the National Telecommunications & Information Administration—the department that contracts with ICANN—jointly signed the brief, which illustrates the equities at stake. The government brief also explains that attachment might lead to ICANN’s root authority unraveling.  DOJ represents the parties’ TLD-as-property assumption as an assault on the multi-stakeholder model of the Internet. Beyond pointing to the endorsement of this model by both political branches, the facts section includes a discussion on longstanding U.S. government policy to keep the Internet domain name system “free from the control of any government, including our own.” Although the brief never explicitly argues for deference, these potential impacts still loom large.

The oral argument is scheduled for January 21st before Chief Judge Garland and Judges Henderson and Randolph.