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Noted domain investor, industry advisor, blogger, and ICA member Mike Berkens has alerted us to a very disturbing occurrence. Unfortunately for Mike, he has been directly impacted by it.

According to an October 2nd blog post at The Domains, “As Many As 5K .Com’s Taken Away By Sealed Court Order By Verisign Including Some Of Mine”—

Overnight I received a notice that several domain names I owned were transferred by a sealed court from Verisign without notice and of course without the court order.

The domain names just were transferred by Verisign to another domain and are now listed for sale at another marketplace…

The Domain names are now all owned by COURT APPOINTED RECEIVER – ROBERT OLEA and have been moved to Uniregisty as the registrar and are now listed for sale at domainnamesales.com

The domain names resolve and the go to a domainnamesales.com page.

According to DomainTools.com, there are now 4,973 domain names associated with the registrant COURT APPOINTED RECEIVER, ROBERT OLEA.

I have send emails out to Verisign, Bob Olea and Mr. Steele who is a partner is a law firm as well as a teacher at a law school who I was instructed to contact at the bottom of the email I received.

I haven’t received any response back so far from anyone.

On a personal level, this is clearly a very disturbing situation for Mike and every other registrant caught up in a Kafkaesque situation. They purchased domains for good money and in good faith, and suddenly they receive notice that the domains have been transferred away and are for sale to others pursuant to a sealed lawsuit in which they are not a party but an innocent bystander. Professional domainers like Mike may have the knowledge and financial means to pursue their available rights, but many of the registrants affected by this situation probably have no idea what to do much less the ability to fund necessary action.

For the domain industry, this obviously raises questions about the validity and finality of secondary market sales that will need to be addressed to restore market confidence – along with questions about what if anything went wrong with the judicial process that led to this result. For the affected registrants, advance notice and due process questions loom large.

ICA reached out to VeriSign for any illumination they could provide but they are unable to respond while the court order is sealed. As Mike wrote in response to comments on the story, “This is not a Verisign issue. Verisign gets presented with a court order and they follow it. I’m still going to place the blame of any domain that was seized that was not owned by the defendant/debtor/ subject of the judgment on the date the order was signed on the attorney for the Plaintiff.”

It may well be that plaintiff’s attorney provided the court with an outdated list of domains owned by the defendant to be seized to satisfy his client’s judgment. But again, until we have more facts it is too soon to draw any firm conclusions.

The only other available facts that we are presently aware of are that a copy of the “Clerk’s Certification Of A Judgment To be Registered In Another District” issued by the U.S. District Court for the Central District of California in the case of Chan Luu Inc. v. Online Growth, LLC et al is available at the Justia website, and the order was registered in the Florida Middle District Court. The other defendants in the case are “Grant Shellhammer et al”. There was a considerable time lag in this proceeding, with the original judgment entered in California on May 23rd, the certification dated September 8th, and the domain transfers occurring around October 2nd. The damages granted to plaintiff are $200,000 plus interest, court costs and attorney fees; we note that there is a strong possibility that the domains transferred in this case may have an aggregate market value far in excess of that total judgment, and that is likewise disturbing. The California court document covers domains that are identical or confusingly similar to Plaintiff’s CHAN LUU mark – but we’re not sure if the domain cited by Mike in his article, RETRACTIT.COM, or any of the other transferred domains fit in that category. Chan Luu is a retailer of jewelry, accessories, and ready-to-wear clothing based in Los Angeles, and so far as can be discerned makes no commercial use of the term “retractit”, so it is unclear why that domain was covered by the court order.

That’s all we know as of now. ICA intends to monitor this situation closely and to actively inquire about it. We look forward to learning more about the facts of this lawsuit and how this disturbing situation came about. We will then consider what actions or reforms can be pursued to assist registrants and minimize the odds that this will recur in the future. Meanwhile, any registrants affected by this situation or who have further information about it are encouraged to post at ICA’s Facebook page.