America's Cup - Another win for Oracle Team USA in California Courts

by Richard Gladwell Sail-World.com NZL on 12 Feb 2016 America's Cup Defender, Oracle Team USA has been successful in its legal effort to swat away a complaint brought by former Oracle Team USA crew member, Matthew Mitchell.

Mitchell's complaint against his former team was dismissed by a San Francisco Court on Wednesday. The amount of damage/injury claimed was stated as $400,000.

Oracle Team USA did not answer the substance of the complaint by Mitchell, instead claiming that it lacked legal merit and cited an extensive list of relevant cases and legal precedence, thus avoiding having to answer Mitchell's claims had the complaint gone to a formal Hearing in open Court.

Mitchell has been given 14 days by the Court to amend and relodge his case, but in the words of the presiding judge Vince Chhabria :

'Dismissal is with leave to amend. It's difficult to imagine how Mitchell could amend his complaint, consistent with Rule 11, to allege either standing or a legitimate theory of liability based on the Oracle Team's failure to suspend or fire Tienpont. But if he believes he can, he must do so within 14 days of this order. '

Mitchells complaint was that in not dismissing fellow OTUSA crew member Simeon Tienpont (NED), after Mitchell claimed that Tienpont had admitted adding resin to the kingpost of an AC45, then Tienpont should also have been dismissed.

'But according to the allegations in Mitchell's own complaint, as well as the exhibits he attaches to the complaint, the America's Cup jury was aware that Tienpont added resin to the kingpost. Therefore, the Oracle Team's alleged failure to suspend or fire Tienpont could not have caused Mitchell's alleged injury. And because Mitchell has not adequately alleged that the conduct for which he is suing the Oracle Team caused his injury, he has not adequately alleged that he has standing to sue in federal court. '

The Court found that because the International Jury had suspended Mitchell from further participation in the 34th America's Cup in San Francisco, but had not done so with Tienpont, the OTUSA was under no obligation to dismiss the Tienpont, who was later made Dutch Sailor of the Year.

In its three-page decision, the Court referred to an earlier case, also dismissed, of another New Zealand team member of Oracle Team USA, Joe Spooner, who had also lodged an employment related case against Oracle Team USA.

'First, in the absence of some specific provision to the contrary, the federal common law of admiralty gives employers broad discretion in deciding whether to discharge an employee. Given this discretion, it's hard to see how the Oracle Team's decision not to discharge Tienpoint could breach its duty of good faith and fair dealing to Mitchell unless that decision also violated a specific provision in Mitchell's contract.'

Further the Court held that Tienpont's continued involvement, or otherwise, with the US team had no relevance to Mitchell's contract with the same team. 'Mitchell's employment contract with Oracle had nothing to do with the Oracle Team's employment of Tienpont, so nothing that the Oracle Team did (or didn't do) to Tienpont could have breached the Oracle Team's duty to act fairly and in good faith in performing its contract with Mitchell.'

Mitchell also has an ongoing case in the same Court against the five members of the International Jury in the 34th America's Cup.

Although submissions have been lodged and re-lodged by Mitchell and his attorney. There have been several extensions given for not attending Hearings and for serving the papers on the five Jury members.

In a motion filed with the Court in early January Mitchells attorney, Patricia Barlow stated in a motion to defer:

'There is no opposing counsel in this case at this time. This request is based on road safety. Petitioner’s counsel is presently at her Truckee, California office and was planning on driving down to Oakland later today or tomorrow morning to attend the Case Management Conference in this case scheduled for 1.30 pm tomorrow, January 6, 2016. The weather in the Truckee/Tahoe area at the moment and expected to continue in to tomorrow, is that of a severe snow storm having snowed continuously for the last 10 hours, with low temperatures, high winds and virtually no visibility on the roads to drive safely. There is also ice on the roads under the snow layers which makes driving unsafe and treacherous. The weather has continued to deteriorate throughout today and this present storm is predicted by the weather forecasters to continue until Friday January 8th 2016. While Petitioner’s counsel has a 4 wheel drive vehicle, this vehicle has 93,000 miles on the clock and the breaks can sometimes not function properly in the present conditions which counsel herself considers unsafe to drive in. Counsel feels it would be unsafe for her to drive to Oakland in these conditions and on this basis asserts this as a showing of good cause for this request for a continuance of her appearance at the Case Management Conference in this case until January 13th 2016 at 1.30 pm when counsel understands a further Case Management Conference calendar will be held. '

On January 15, 2016 the Court responded:

'In light of the fact that Plaintiff 'is in the process' of serving Defendants, and no Defendant has yet appeared, the January 20, 2016 case management conference is vacated and continued to March 2, 2016 at 1:30 p.m. before Magistrate Judge Donna M. Ryu in Courtroom No. 4, Third Floor, U.S. District Court, 1301 Clay Street, Oakland, CA 94612. The joint case management conference statement is due on February 24, 2016. Plaintiff shall serve the Defendant with a copy of this Clerk's Notice and file a proof of service with the court.'

For a later report on the Decision click here

It is believed a further case may be lodged by another former OTUSA crew member in the New York courts later this year.