First Amended Complaint in Bord v. Banco de Chile
27 December 2001
UNITED STATES DISTRICT COURT FOR
NATURE OF ACTION
Plaintiff Eric S. Bord ("Mr. Bord") brings this complaint against Defendant Banco De Chile for declaratory relief under 28 U.S.C. 2201, 15 U.S.C. 1114(2)(D)(v), and 15 U.S.C. 1125, and for abuse of process, tortious interference with prospective economic advantage, slander of title, and unconscienability under state law, and against Defendant United States Department of Commerce (DOC) for judicial review of agency action, for violation of the Administrative Dispute Resolution Act (ADRA), and for unlawful delegation under the United States Constitution.
JURISDICTION AND VENUE
1. This Court has subject matter jurisdiction over the claims asserted herein pursuant to 5 U.S.C. 575(a)(3), 7 U.S.C. 702, 15 U.S.C. 1121, 1114(2)(D)(v), and 1125, 28 U.S.C. 1331, 1332, 1367, and 1338, and the United States Constitution.
2. This Court has personal jurisdiction over Defendant Banco De Chile because this Defendant agreed to submit to the jurisdiction of this Court, and over both defendants because a substantial part of property that is the subject of the action is situated in this judicial district.
3. Venue is proper for Banco De Chile in this judicial district pursuant to 28 U.S.C. 1391(b), (c), and (d) because this Defendant agreed to submit to the jurisdiction of this Court, because Defendant is an alien, because a substantial part of property that is the subject of the action is situated in this judicial district, and because Defendant is a corporation subject to personal jurisdiction in this district. Venue is proper for Defendant DOC pursuant to 28 U.S.C. 1391(f) because a substantial part of property that is the subject of the action is situated in this judicial district.
4. Plaintiff Bord is a United States citizen and a resident of the State of Maryland.
5. On information and belief, Defendant Banco De Chile is a Chilean corporation with its principal place of business at Ahumada 251, Santiago, Chile.
6. Defendant DOC is an administrative agency of the United States government.
7. The Internet, which began as an initiative of the United States Department of Defense, is a world-wide network of millions of computers. Numerous forms of content and communication are available on the Internet, including the now-familiar websites and e-mail. The computers on which the files comprising websites reside are known as "servers."
8. Every server on the Internet is potentially locatable and accessible to every individual Internet user. A server can be located by specifying its "Internet Protocol" (IP) address.
9. IP addresses are comprised of up to 12 digits described in dotted decimal form, such as "126.96.36.1998."
10. Because, inter alia, IP addresses comprised of up to 12 random digits are difficult to remember, a system arose by which servers or the content on them could alternatively be located by specifying an alphanumeric name chosen by the owners of the servers or the website files stored on them. These owner-chosen designations came be known as "domain names." Familiar examples of domain names include "yahoo.com," "aol.com," and "google.com."
11. Domain names are mapped to IP addresses by the "Domain Name System" (DNS). In essence, the DNS works as follows: When a computer user types a domain name such as "yahoo.com" into a web browser, the browser sends a query to a special server that replies with the IP address of the server on which the Yahoo website can be found. The browser then sends a request to that IP address and the server replies by sending a web page to the browser. Generally, this process takes place quickly and is invisible to the user; indeed, many if not most Internet users are unaware that mapping of domain names to IP addresses even takes place.
12. The essence of the domain name system as Internet users know it is that a given domain name is uniquely mapped to a single IP address at any given time.
13. Such unique mapping requires a single DNS for all users. If more than one DNS existed, an Internet user could not be assured of reaching the website she expects to reach when she enters a domain name in her browser, because each DNS could match the domain name to a different IP address, and hence to a different website.
14. The critical computer files that contain the mapping information for the Internet's unitary DNS have come to be known as the "root files" or the "root." Control of the root entails control of the unitary DNS.
15. The US government has controlled the root at all relevant times. A succession of government agencies has exercised control over the root, usually with the help of private citizens or groups to perform until recently purely technical functions.
16. DOC is the agency currently in control of the root.
Establishment of ICANN as Proxy Regulator
17. During the late 1990's, many observers believed that the rapid commercialization of the Internet would revolutionize the world's economy. The product of this anticipated change-in-kind came to be known as the "New Economy."
18. Proponents of the New Economy often spoke of the necessity for business people and politicians to move rapidly or be outpaced by the speed of commercial and technological change.
19. By 1997, foreign governments and industry officials had begun to question the US government's control of the root and the authority it conferred over the world-wide operation of the Internet. In July 1997, then-President Clinton directed the Secretary of Commerce to take steps to privatize the DNS. On information and belief, the Clinton Administration believed that it had to move rapidly to deflect criticism that US government control of the root and of certain fundamental Internet policy matters was impeding the growth of the New Economy and reflected inappropriate US domination of a world resource.
20. In 1998, the Administration published a notice of proposed rulemaking (NPRM) regarding its plan to privatize the DNS (this NPRM came to be known as the "green paper"). The green paper incited strong opposition, however, and the Administration soon abandoned it.
21. Thereafter, DOC apparently decided that it would make DNS policy without resort to formal administrative vehicles. Thus, later in 1998, DOC published a "policy statement" (known eventually as the "white paper") that called for the formation of a non-governmental organization (NGO) to manage the DNS. The white paper specified the features such an NGO would need to have to meet government approval. The white paper also called on the putative NGO referred to as "Newco" to make policy for world-wide resolution of domain name disputes via alternative dispute resolution methods.
22. On information and belief, DOC had already contacted at least some of the individuals that it wished to start Newco, and had informally decided that the organization these individuals were willing to create would or would likely serve as Newco.
23. The organization that, on information and belief, DOC intended to serve as Newco eventually came to be known as the Internet Corporation for Assigned Names and Numbers (ICANN).
24. ICANN is, formally, a California nonprofit corporation incorporated in or about October 1998.
25. After the white paper was published, DOC and certain other senior Administration officials negotiated extensively with the founders of ICANN, and the government insisted on approving most of the details of ICANN's operation.
26. DOC and ICANN eventually entered into a Memorandum of Understanding (MOU) in which the government declared its intention ultimately to "transition" DNS functions it now controlled to a not-for-profit entity. The MOU made clear, however, that the government was providing ICANN only a trial run.
27. DOC amended its MOU with ICANN in November 1998. ICANN acknowledged in the amended MOU that "if DOC withdraws its recognition of ICANN or any successor entity by terminating this MOU, ICANN agrees that it will assign to DOC any rights that ICANN has in all existing contracts [related to administration and control of the DNS]." For this and other reasons, DOC is the but-for cause of ICANN's existence and power.
28. Although nominally a "technical" institution, ICANN in fact makes and implements fundamental policy decisions of the type normally made and implemented only by government bodies.
29. On information and belief, DOC intended to use, and has used, ICANN as a proxy regulator.
30. On information and belief, DOC continues to maintain effective operating control over ICANN policymaking by means of continuing informal contact, backed by the omnipresent threat that DOC will withdraw recognition of ICANN and give another entity temporary or permanent control of the root and the power that attends it.
31. In the alternative, on information and belief, DOC does not maintain effective control over ICANN policymaking, and has instead delegated authority for such policymaking to ICANN alone.
Substantive Policymaking by DOC/ICANN: The UDRP
32. Among the fundamental policy decisions made and implemented by DOC/ICANN is the "Uniform Domain-Name Dispute-Resolution Policy" (UDRP). The UDRP is a legal framework by which domain name registrants may be stripped of title to their domain names. DOC/ICANN promulgated the UDRP pursuant to no legislative mandate and without notice and comment rulemaking.
33. DOC/ICANN compels domain name registrants to submit to the jurisdiction of one or three-member "panels" selected and supervised by private entities, some of which depend primarily on fee income from trademark holders for their financial survival. One such private dispute resolution "provider" is the World International Property Association Arbitration and Mediation Center (WIPO-AMC).
34. The UDRP provides insufficient procedural safeguards to protect the due process rights of domain name owners.
35. Petitioners, i.e., those seeking to wrest control of a domain name from its current owner, may choose to file their complaint with any of several dispute resolution providers. Respondents, i.e., those seeking to retain ownership of their domains, may not challenge petitioners' choices.
36. At least one study has shown that petitioners strongly favor dispute resolution providers whose outcomes strongly favor petitioners. On information and belief, dispute resolution providers that depend primarily on fee income from trademark holders for their financial survival are materially influenced by knowledge of this trend. Consistent with this trend, the dispute resolution provider whose outcomes least favored petitioners, E-Resolution, recently went out of business.
37. The UDRP permits no discovery and no examination of witnesses, and respondents must present their entire case within 20 days after a complaint is filed. Actions under the UDRP are subject to no statute of limitations, however, so prospective petitioners face no time limits preparing their cases.
38. The UDRP does not require panels to apply particular legal principles; rather, arbitrators may apply any legal principles they like from any jurisdiction they choose.
39. The UDRP permits no administrative review of panels' decisions.
40. The UDRP contains no standards for determining whether a panel member has a conflict-of-interest in a given case.
41. The UDRP, as panels have construed it, permits petitioners to file a second complaint challenging a decision rendered on an initial complaint if the petitioner alleges perjury or panel misconduct. Yet, the UDRP provides no such opportunity to respondents, who cannot ever file a UDRP complaint.
42. The UDRP does permit an aggrieved respondent to stay a UDRP decision by filing a lawsuit in a national court system within 10 days after the UDRP decision is rendered; failure to file within 10 days results in forfeit of the domain name.
43. The UDRP contains no provisions for res judicata, and several panels have already reheard on the merits cases that were previously decided on the merits by other panels.Nothing in the UDRP would prevent a party from filing a UDRP complaint seeking transfer of a domain name after that party had lost a suit in US federal court concerning the same domain.
44. Mr. Bord is an entrepreneur and attorney. He has a long history of involvement in Latin American business, politics, and human rights.
45. From 1985 to 1987, and from 1991 to 1994, Mr. Bord served as an adviser to former President Jimmy Carter and the Carter Center. In that capacity, among other things, he helped former President Carter and other members of former President Carter's senior staff to develop and implement bipartisan U.S. foreign policy options for Latin America. Likewise, he accompanied former President Carter on missions to Central America, Venezuela, and Mexico.
46. In May 1993, while serving as a full-time adviser to former President Carter and the Carter Center in Atlanta, Georgia, Mr. Bord founded The MBI Group, Inc, (MBI) a Georgia Corporation chartered to do business in, among other things, international trade, sales, and marketing. Mr. Bord created MBI after the North American Free Trade Agreement (NAFTA) was enacted, and he saw a window of opportunity during which he could undersell Mexican manufacturers in the construction industry by purchasing certain material from providers in the U.S., Costa Rica, and Ecuador, and reselling it in Mexico. Mr. Bord, as president of MBI, was able to raise capital from a variety of sources, and to use the capital to purchase inventory from these providers for sale and distribution in Mexico.
47. In August 1994, while Mr. Bord was in Mexico as an international election monitor with the Carter Center, he sensed that a major currency devaluation was on the horizon. Accordingly, he moved quickly to liquidate MBI's inventory and to pay its creditors. When the Mexican peso was devalued in December 1994, the business plan was no longer feasible.
48. After dissolving MBI, Mr. Bord founded an immigration law firm, but continued to think about business ventures that he might start in Latin America.
49. In 1998, Mr. Bord heard a radio program that discussed the seemingly unlimited commercial potential of the Internet. One of the commentators on the program noted that domain names were already becoming scarce, and entrepreneurs would be wise to register any domain they thought they might use in a business venture as soon as the idea for use entered their minds. Mr. Bord took this advice to heart, and registered a small series of generic words and phrases in Spanish that he thought he might one day use in a business venture. Although others had already registered many of the words or phrases he would have liked to register, Mr. Bord succeeded in registering domain names that included "financiar" ("to finance" in English), "preferido" (preferred), "tractores" (tractors), "vidrios" (glass/windows), "camionetas" (pickup trucks), "alimentosnaturales" (natural foods), and "telefonocelular" (cellular telephone).
50. Mr. Bord registered these domain names with the intention eventually to start one or more Internet-based businesses in or directed toward Latin America.
51. One of the domain names was "bancochile.com" (the "Domain Name"), which Mr. Bord believed to be the most generic name possible for a Chilean Bank.Mr. Bord's prior business experience involved arbitrage in Latin America, and an Internet-based business related to banking seemed a natural extension of his interests and experience.
52. In 1998, however, very few Latin Americans had access to the Internet; accordingly, there would have been no commercial sense in starting an Internet business at that point. Thus, Mr. Bord chose not to start an Internet-based venture in Latin America until a significant number of Latin Americans had Internet access.
53. Since August 1998, Mr. Bord has closely monitored the penetration of the web and Internet business in this region of the world. This preparation has included continual review of leading periodicals and journals addressing Latin American economic conditions, and of U.S. Department of State Country Commercial Guides on the developing economies in the region.
54. Among the facts that persuaded Mr. Bord that the time was not yet right to start an Internet-based business in Chile were that despite having Latin America's most advanced economy, and the greatest Internet penetration in the region, Internet users comprised less than 17% of the population, and 76% of homes and 22% of small businesses did not have computers. Moreover, only 7% of those who were Internet users shopped on-line. Furthermore, credit card penetration in Chile was only at 8-11%. [Source: U.S. Department of State Country FY 2001 Commercial Guide: Chile]. While Internet use was growing in Chile, those figures were still low compared to the U.S. where many Internet start-ups continued to have a difficult time surviving.
55. Mr. Bord has never sold or tried to sell the Domain Name, or any domain name, to anybody.
56. Mr. Bord supplied fully accurate contact information during the registration process. He has never tried to conceal his identity from persons that might allege an interest in the domains.
57. Mr. Bord has made no attempt to divert consumers from any trademark owner's online location to a site accessible under a domain name he owns.
Defendant Banco De Chile's Bad Faith Attempt to Obtain the Domain Name
58. Almost three years after Mr. Bord registered the Domain Name, Defendant filed a complaint with WIPO-AMC (an ICANN contractor) under the UDRP alleging that Mr. Bord had no interest in the Domain Name and had registered and was using it in bad faith (the "WIPO Action").
59. Defendant had at no time attempted to contact Mr. Bord to learn what interest he may have had in the Domain Name. Likewise, Defendant made no effort to try to learn whether Mr. Bord's use of the name was in good faith.
60. Defendant alleged in its petition to WIPO-AMC that Mr. Bord was preventing Defendant from reflecting its "trade name and well-known trademark" in a ".com" domain name.
61. On information and belief, Defendant in fact had no trademark anywhere in the world on bancochile; rather, Defendant's mark is "Banco De Chile."
62. Mr. Bord did not register bancodechile.com, even though it was available at the time he registered bancochile.com. Indeed, bancodechile.com was available for months after Mr. Bord registered bancochile.com. Eventually, an individual with no connection to Mr. Bord, one Adolfo Oviedo of Costa Rica, registered bancodechile.com.
63. Because Mr. Bord could not have prevented Defendant from reflecting its trademark in a ".com" domain name, Defendant's stated purpose for bringing the WIPO Action was false.
64. On information and belief, Defendant's ulterior purpose was to abuse compulsory process to expand the reach of its generic trademark "Banco De Chile" beyond the limits that trademark law would permit, and unlawfully to suppress possible legitimate competitors.
65. Defendant further stated, falsely, in its petition to WIPO-AMC that Mr. Bord could make no use whatsoever of the Domain Name without infringing Banco De Chile's trademark.
66. Defendant made numerous other misrepresentations in its petition.
67. On information and belief, Defendant knew or should have known these statements were false when Defendant made them.
68. The UDRP and its implementing rules do not permit unsolicited submissions other than a single brief by petitioner and respondent.
69. Notwithstanding this, after both Defendant and Mr. Bord had submitted their briefs, Defendant made an additional submission to the arbitral panel. In that submission, Defendant informed the panel that another panel had transferred bancodechile.com from Adolfo Oviedo to Defendant. Defendant failed to concede in this improper submission, however, that the award of bancodechile.com a matter in any event unrelated to Mr. Bord ended any possibility that Banco De Chile might have been prevented from reflecting its trademark in a ".com" domain.
70. Defendant selected as its counsel a Chilean attorney who himself serves regularly as a panel member in UDRP proceedings. Defendant did not disclose this conflict-of-interest in its pleadings, nor did ICANN or its agents make this fact known to Mr. Bord.
71. On information and belief, Defendant and/or its agents, including without limitation legal counsel, have close ties to the panel members it nominated to decide its case against Mr. Bord.
72. Thus, on information and belief, one or more of the panel members was not impartial, despite the member or members' submission(s) of a sworn declaration of impartiality.
73. On information and belief, Defendant and/or its agents knew one or more of the panel members it nominated was not impartial, and nominated him or them for that reason.
74. On information and belief, at least in part through its false statements and improper relationship with at least one of the panel members, Defendant procured a 2-1 arbitral decision awarding the Domain Name to Defendant. The decision was manifestly improper even under the few clear principles imposed by the UDRP and its implementing rules. The dissenting panel member termed the majority's decision "egregious."
75. Defendant's actions have improperly clouded Mr. Bord's title to the Domain Name, harmed his ability to conduct business, injured his reputation, and caused him emotional distress.
76. Unless enjoined, Defendants likely will continue to cause Mr. Bord irreparable damage. It would be difficult to ascertain the amount of compensation that could afford Mr. Bord adequate relief for such continuing acts, and a multiplicity of judicial proceedings would be required. Mr. Bord's remedy at law is not adequate to compensate him for injuries threatened.
JUDICIAL REVIEW OF AGENCY ACTION PURSUANT TO 7 U.S.C. 702 ET SEQ.
(against Defendant DOC)
77. Mr. Bord adopts and incorporates by this reference each and every preceding paragraph as if fully set forth herein.
78. DOC / ICANN is able to deprive United States citizens of property and liberty via an adjudicatory proceeding that lacks basic due process safeguards.
79. DOC's promulgation of the UDRP through ICANN was not in accordance with law, and Mr. Bord was adversely affected and aggrieved thereby.
80. The adjudicatory decision rendered by DOC / ICANN delegatees under the UDRP awarding the Domain Name to Banco De Chile was not in accordance with law, and Mr. Bord was adversely affected and aggrieved thereby.
(against Defendant DOC)
81. Mr. Bord adopts and incorporates by this reference each and every preceding paragraph as if fully set forth herein.
82. In the alternative, DOC unlawfully delegated authority to a private entity to make policy and to exert control over protected property and liberty interests of members of the public.
83. DOC did not retain a right to review the private entity's decisions.
84. Mr. Bord was deprived of protected property or liberty interests without due process of law thereby.
VIOLATION OF 5 U.S.C. 575(a)(3)
(against Defendant DOC)
85. Mr. Bord adopts and incorporates by this reference each and every preceding paragraph as if fully set forth herein.
86. In the alternative, DOC / ICANN required Mr. Bord to consent to arbitration as a condition of entering into a contract or obtaining a benefit.
DECLARATORY RELIEF UNDER 15 U.S.C. 1114(2)(D)(v), 15 U.S.C. 1125, AND 28 U.S.C. 2201
(against Defendant Banco De Chile)
87. Mr. Bord adopts and incorporates by this reference each and every preceding paragraph as if fully set forth herein.
88. Mr. Bord has neither registered, trafficked in, nor used the Domain Name with a bad faith intent to profit.
89. At all relevant times, Mr. Bord believed, based on reasonable grounds, that his use of the Domain Name was lawful.
90. Mr. Bord has not used the Domain Name in commerce in a manner likely to cause confusion as to the source or affiliation of goods or services.
91. An actual controversy now exists between Mr. Bord and Defendant Banco De Chile as to whether Mr. Bord's registration and use of the Domain Name are lawful under 15 U.S.C. 1114(2)(D)(v) and 15 U.S.C. 1125. The controversy will, until resolved, damage Mr. Bord.
ABUSE OF PROCESS
(against Defendant Banco De Chile)
92. Mr. Bord adopts and incorporates by this reference each and every preceding paragraph as if fully set forth herein.
93. Defendant Banco De Chile had an ulterior purpose for initiating and maintaining the WIPO Action against Mr. Bord.
94. Defendant performed an act or acts in the use of the adjudicatory process not proper in the regular prosecution of the proceedings.
95. Defendant's actions damaged Mr. Bord.
TORTIOUS INTERFERENCE WITH PROSPECTIVE ECONOMIC ADVANTAGE
(against Defendant Banco De Chile)
96. Mr. Bord adopts and incorporates by this reference each and every preceding paragraph as if fully set forth herein.
97. Mr. Bord had a business expectancy with a probability of future economic benefit.
98. Defendant Banco De Chile knew of the expectancy.
99. Absent Defendant Banco De Chile's intentional misconduct, it is reasonably likely that Mr. Bord would have realized the expectancy.
100. Defendant Banco De Chile's intentional misconduct damaged Mr. Bord.
SLANDER OF TITLE
(against Defendant Banco De Chile)
101. Mr. Bord adopts and incorporates by this reference each and every preceding paragraph as if fully set forth herein.
102. Defendant Banco De Chile published falsehoods with the intent to harm Mr. Bord's valuable interest in property, and Defendant Banco De Chile either recognized or should have recognized that the publication was likely to do so.
103. Defendant Banco De Chile knew that its statements were false or acted in reckless disregard of their truth or falsity.
104. Defendant Banco De Chile's actions damaged Mr. Bord.
DECLARATION OF UNCONSCIENABILITY
(against Defendant Banco De Chile)
105. Defendant Banco De Chile is the third-party beneficiary of the contract Mr. Bord was compelled to enter into to obtain the Domain Name.
106. The contract was intrinsically unfair at the time it was made in relation to all attendant circumstances, including the relationship between the parties.
107. An actual controversy now exists between Mr. Bord and Defendant Banco De Chile as to whether the contract is unconscionable and should not be enforced. The controversy will, until resolved, damage Mr. Bord.
PRAYER FOR RELIEF
WHEREFORE, Mr. Bord respectfully asks this Court to grant the following relief:
108. Enjoin Defendants and their agents, servants and employees permanently from directly or indirectly continuing any and all unlawful acts alleged herein.
109. Enter a declaration that Mr. Bord has not violated 15 U.S.C. 1125 and that pursuant to this section and 15 U.S.C. 1114(2)(D)(v), Mr. Bord is entitled to possession of the Domain Name.
110. Award compensatory, punitive and exemplary damages against Defendant Banco De Chile in favor of Mr. Bord in a sum not yet determinable but believed to exceed $1,000,000.
111. Award Mr. Bord his reasonable attorneys' fees and costs in bringing this action.
112. Grant such other relief as this Court deems just and proper.
Mr. Bord respectfully requests that the claims in this action be tried to a jury.
December 27, 2001
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