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Court Dismisses .Web Lawsuit, Says Agreement Not to Sue Is Enforceable

“Judge Percy Anderson of the U.S. District Court, Central District of California has granted ICANN’s motion to dismiss in a lawsuit brought by a subsidiary of new TLD company Donuts,” reports Andrew Allemann in Domain Name Wire. “Donuts filed a lawsuit because it was upset that Verisign was bankrolling another applicant’s bid for the domain. Donuts believed that the applicant, Nu Dot Co, had undergone changes that required updating information with ICANN prior to the auction. ... But new TLD applicants agreed to not sue ICANN. Donuts argued to the court that this covenant not to sue was unenforceable because it was void under California law and unconscionable.”

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Comments

AT&T;Mobility v. Concepcion made it pretty clear Karl Auerbach  –  Dec 7, 2016 4:33 PM

AT&T Mobility v. Concepcion made it pretty clear that clauses of this type are permitted to trump State laws, such as California’s ban on unconscionable contract terms. This kind of provision is now found in a large portion of contracts. This Federal preemption does not, however, remove the fact that California, the State where ICANN obtains its legal existence as a public-benefit tax exempt corporation, has found such provisions so abusive as to shock the conscience.

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