UDRP Is Not Federal Arbitration

The results of the voluntary dispute resolution mechanism to resolve domain name disputes is not entitled to any deference in federal courts, the appellate court for the Third Circuit has ruled.

The court found that the Uniform Dispute Resolution Policy (UDRP) of the Internet Corporation for Assigned Names and Numbers (ICANN) does not qualify as an arbitration under the Federal Arbitration Act. (FAA) Under the FAA, decisions by an arbitrator can only be reversed by a federal court if there was misconduct by the arbitrator or a manifest disregard for the law.

The validity of the UDRP arose in a dispute between Anna Strasberg, the widow of actor and acting coach Lee Strasberg and Eric Dluhos who had registered the domain name www.leestrasberg.com. During the registration process with Network Solutions, Inc., Dluhos agreed to be bound by the ICANN Dispute Resolution Policy. An attorney for Strasberg sent a letter to Dluhos requesting that he sign over the domain name to Anna Strasberg and the Lee Strasberg Theatre Institute. Dluhos did not respond. Strasberg filed an action under the ICANN UDPR to have the domain name transferred and an arbitrator was appointed. Dluhos refused to participate in the arbitration. Instead, he filed a case in federal court to challenging the constitutionality of the arbitration process.

While the federal case was pending, the ICANN arbitrator found in favor of Strasberg and ordered the domain name turned over to her. Strasberg then filed a motion to dismiss the federal court complaint based on the finding by the arbitrator that she was entitled to the domain name. The trial court agreed with her. The trial court agreed that the ICANN UDRP fell under the FAA. As a result, the trial court gave the arbitrator’s decision deferential treatment. The appellate court reversed the trial court’s finding that the UDRP qualified as an arbitration under the FAA.

The appellate court found that the UDRP is non-binding and that the policy itself “contemplates the possibility of judicial intervention, as no provision of the policy prevents a party from filing suit before, after or during the administrative proceeding.” Thus, the UDRP is not an arbitration under the FAA. The appellate court also said its decision “in no way reflects an intimation that the NAF [arbitrator] panel erred in its judgment, but merely that UDRP resolutions do not fall under the limited judicial review of arbitrators of the FAA.”

By declaring that the UDRP did not qualify as an arbitration under the FAA, it created a new problem for Dluhos. His court case was based upon federal jurisdiction conferred by the FAA. Because the UDRP was not a qualified arbitration, the federal court was without authority to hear his case at all. However, the appellate court came to Dluhos rescue. Since he represented himself without an attorney, the appellate court said his pleading appeared also to state a cause of action under the federal Anticybersquatting Consumer Protection Act. The Anticybersquatting Act provides for a federal court action so he could continue to pursue his case in federal court. Under the Anticybersquatting Act, a registrant whose domain name has been “suspended, disabled, or transferred” may sue for a declaration that his or her registration is not a violation of the Act. By finding that the UDRP is not an arbitration under the FAA, the appellate court’s decision raises the question of whether to use the UDRP at all in a domain name dispute. If the question of ownership of a domain name can be relitigated in federal court, then the value of the UDRP is greatly diminished as an effective tool to regain a domain name. Eric Dluhos v. Anna Strasberg et al., Third Circuit Court of Appeals.