Koch gets amicus curiae letter accepted in America's Cup Appeal

by Richard Gladwell, Sail-World on 17 Jan 2009
Two time America's Cup competitor and winner, Bill Koch, has been successful in a bid to have an amicus curiae letter accepted by the the Court of Appeals in the State of New York.

At the same time the Court rejected letters from two other parties who had supported the position adopted by the current Defender, Societe Nautique de Geneve (SNG). The two teams - Team French Spirit (FRA)and Team Shosholoza (RSA) had their motion to file additional amicus curiae briefs denied.

Koch was a former winner and Defender of the America's Cup in 1992 for he San Diego YC. In 1995 he opted to promote the Mighty Mary, all womens team. He is a member of the America's Cup Hall of Fame.

Koch's letter gave tangential support to the submission put forward by Golden Gate Yacht Club. It underlines the practical reasoning for requiring a Club to have already held an annual regatta, and for that club, if it wishes to be Challenger of Record, to be organised as a yacht club. It does not just echo the submission of others, but provides very practical reasons, from a sailor's perspective, as to the way the wording must applied as he suggest and not in a futuristic sense.

Koch also explores the practical effect of the future tense interpretation, and how this could be used by the Defender to very real advantage.

The cut-off date for the lodging of amicus curiae letters was early January 2009, and Koch, through his attorneys has scored something of a breakthrough in having this letter accepted for consideration by the Court.

Two other teams tried to have second submissions accepted by the Court, but these were rejected.

Another letter lodged by Royal Thame yacht Club, after the 2 January deadline has yet to be ruled on by the Court as to whether they will accept its submission - and by definition whether it will be considered by the Court when it considers the final Appeal. Koch's letter was accepted by the Court at face value, meaning that it will be taken into account by the Court, but the two time America's Cup competitor will not be able to make submissions in person.

The bulk of the text is reproduced below:

Preliminary Statement

The America’s Cup is the oldest and most prestigious sailing regatta in the world and the oldest active trophy in international sport. It predates the modern Olympics by 45 years. The America’s Cup, which is a silver cup trophy, was first won in 1851 by the yacht America in a race around the Isle of Wight. After winning the Cup, the six owners of the America donated the Cup to the New York Yacht Club in 1857, creating a charitable trust under the laws of New York that provided that the Cup would be a perpetual challenge cup for the friendly competition. between foreign countries. From the beginning, the Deed of Gift required that a Challenger of Record be an organized yacht club. Since 1857 there have been 32 America’s Cup matches and in every single race, the Challenger of Record was an organized yacht club. Most of these yacht clubs had royal patronage.

Although the Appellate Division below found the requirement that a Challenger of Record hold an annual ocean regatta to be somewhat trivial, history indicates that it was an important requirement for the donors. In fact, status and grandeur of the Challenger of Record was so important to the donors that in 1882, after two challenges had come from yacht clubs situated on the Great Lakes, which resulted in racing vessels deemed to be 'crude in finish' and 'degrading to the standing of the competition'; the sole surviving donor, George Schuyler revised the deed to require that, in addition to being an 'organized yacht club' the challenger must have 'its annual regatta on an ocean water-course.'

The requirement that a Challenger of Record be an organized yacht club, also provides other benefits. It guarantees that a Challenger will have the experience necessary to negotiate a fair and competitive Protocol for the America’s Cup; that the Challenger is a sailing enthusiast motivated by the challenge of competing in a world renowned sailing event, rather than the financial incentives of holding an international sporting event. It ensures that the America’s Cup will remain a true sport, with the most prestigious teams racing for organized yacht clubs that have real members who can rally behind their team. The requirement secures a level of competition that drives innovation and captivates public attention.

Now, more than a hundred and fifty years after the America’s Cup began, the current Defender and trustee of the Cup, Societe Nautique De Geneve (SNG), has disregarded the terms of the Deed of Gift and seeks to trample tradition and tarnish the prestigious reputation of the America’s Cup by permitting a sham yacht club, Club Nautico Espanol De Vela (CNEV), to serve as Challenger of Record for the 33rd America’s Cup. The objective of SNG and its team founder, Ernesto Bertarelli, is to use CNEV to make money and circumvent the self-dealing charitable laws of New York. CNEV is not a yacht club. It has no vessels, no members, no physical facilities (other than the base facility of its racing team) and has never held an annual regatta. Prior to September of this year, CNEV had no website, no telephone number or contact information. In fact, it was incorporated just days before it submitted a challenge to SNG.

In truth, CNEV is nothing more than a federation of sports clubs and individuals who promote the sport of sailing. The sole purpose of its creation was to ensure that the 33rd America’s Cup would be held in Valencia, Spain. Because CNEV is not a bonafide yacht club, it cared little (or knew little) about negotiating a fair and sportsman-like race for the America’s Cup. Instead, its prime focus was to ensure that the race would be held in Valencia, and in exchange for that guarantee, CNEV allowed SNG to create a one-sided Protocol that left SNG with total control of the competition.

The result of this exchange is a plan for the 33rd America’s Cup that not only violates the express language of the Deed of Gift, which requires the Challenger of Record to be an organized yacht club holding its annual regatta on an ocean water-course, but one that also fails to comply with the spirit and intention of the Deed of Gift. Should the lower court’s decision stand, any organization, whether a yacht club or not, could be a Challenger of Record. The outcome would be a rapid demise to the grandeur and prestige of the America’s Cup. The America’s Cup would no longer be a competitive event that drives innovation and captures the public’s attention. The event, as it exists today and as it was envisioned by the donors of the Cup, would die.

ARGUMENT
Mr. Koch supports the argument asserted by Plaintiff/Appellant Golden Gate Yacht Club that the intent of the donors, as expressed in the Deed of Gift, was that only a bonafide yacht club could qualify as Challenger of Record. Not only is this requirement expressly set forth in the Deed of Gift, but the requirement is necessary to maintain the splendor and glory of the America’s Cup.

As a practical matter, a requirement that a challenger be a organized yacht club that has held an annual ocean regatta, ensures that the challenging entity will be independent from the Defender and will have the experience needed to negotiate a Protocol for the America’s Cup that will result in a competitive showing of true sportsmanship. This competition fuels innovation and fortifies the prestige of the America’s Cup.

If the decision of the Appellate Division stands, and CNEV is permitted to serve as Challenger of Record for the 33rd America’s Cup, the prestige and reputation of the Cup will be soiled. The lower court’s decision opens the door for a Defender to invent sham challengers (as SNG did here) so that the Defender may continue to control t