Gladwell's Line- America's Cup - Will Boies get a foot in the door?

by Richard Gladwell on 1 Sep 2009
The venue of the 33rd America’s Cup is expected to be another target for Golden Gate YC's newly hired legal 'Top Gun', David Boies, and legal friends.

Under the Deed of Gift for the America’s Cup, which is the governing document for this Multihull Match, the Challenger (Golden Gate YC) gets to nominate the time of the Match and the size of yacht, while the Defender (Societe Nautique de Geneve) selects the venue.

That Defender's right came into sharp relief, when Societe Nautique de Geneve, the landlocked Swiss Club, decided to bid the venue for the 2007 event.

All previous Defences had taken place in the home waters of the Defender. But with no 'ocean course, free from headlands' available, SNG bid the venue of the 32nd Match settling on Valencia for a fee of USD150million, covering two multi challenger Defenses of the America’s Cup.

One of the Decisions of the New York Supreme Court in the current two year legal saga held that 'the location of the match shall be in Valencia, Spain or any other location selected by SNG, provided that SNG notify GGYC in writing not less than six months in advance of the date set for the first challenge match race of the location it has selected for the challenger match races.'

SNG’s interpretation of this Court dictate is that it can stage the America’s Cup anywhere it likes, provided it stages the event on 8 February 2009.

GGYC’s view is that the venue can be Valencia; or anywhere in the Southern Hemisphere; or a northern hemisphere venue on which both Challenger and Defender agree.

SNG nominated the United Arab Emirate state of Ras Al Khaimah which caused a few raised eyebrows around the sailing world, and if nothing else put RAK on the map.

GGYC will surely dispute that selection, believing that it is not consistent with the view that Justice Cahn made a specific exception to the Deed in nominating Valencia. And, any other venue had to be Deed compliant - which means that a northern hemisphere venue cannot be selected for a match to be sailed between the months on November to April inclusive.

'Within the Four Corners of the Deed' has become a familiar piece America's Cup legalese. Essentially this phrase means that if a Court can interpret the intentions of a the donor, George Schulyer within the Deed itself without having to use external sources, then that is the interpretation that prevails.

The 1990 Appeal Court decision in Mercury Bay described 'Four Corners' this way: 'Because the deed provisions on these issues are unambiguous, we may not look beyond the four corners of the deed in ascertaining the donors' intent and therefore may not consider any extrinsic evidence on the meaning of these provisions.'

The Four Corners doctrine has resulted in some very conservative and unusual decisions which do not relate to what most understand the sport to be.

One of the ways of testing any argument is to logically extend it, and see if it still holds up, or leads to a ridiculous situation.

As the Deed does not make any constraint on where the Defender may sail the Match, using extended logic, it is theoretically possible that the Defender could elect to hold the next America’s Cup in a war zone for the Challenger.

Within the Deed there is nothing to say that the Challenger's nation state's foreign policy shall be taken into account when selected in the venue. In the same way the deed does not say that engines are prohibited for use when sheeting sails (although that point is yet to be ruled by Justice Shirley Kornreich).

The waters of Ras Al Khaimah sit uncomfortably close for some to Iran – probably too close for the comfort of the US Challenger. A point that may be lost on the Swiss mindset, given the nation's long standing neutral position in world affairs, the dichotomy of the US situation which operates in a state of international friction.

SNG, and their friends on the ground in Ras Al Khaimah, do not believe there is a security issue saying that the UAE is a very safe. Expect Golden Gate YC to present a contrary view, to the New York Supreme Court, particularly after the US club has been on an information gathering exercise in the venue.

Measurement rules are expected to be another issue, particularly that of waterline length.

While SNG have been careful to roll over the Measurement rules that were announced for the last Deed of Gift Match in 1988, these have created some anomalies in 2009.

One case in point is the measurement of water line length which is taken between the two extreme points of immersion on the hull of the Challenger.

In yachts rated on waterline length it is a common design ploy to have substantial overhangs which create extra length , which are not 'seen' by the rule, and the literal interpretation of the rule published by SNG would mean that rudders (being the extreme end of the boat are included). Under other rating rules rudders are excluded from length measurement.

The rule published by SNG reads:

'1. For the purposes of measurement, the 'length on load water line' is the distance between a line perpendicular to the yacht’s centre line and passing through the furthest forward point of intersection of the yacht with its water-line plane, and a line perpendicular to the yacht’s centre line and passing through the aftermost point of intersection of the yacht with its water line plane. '

Golden Gate's concerns are believed to be that with their transom hung rudder, they create a very long boat possibly longer than the 90ft LWL maximum and would therefore be illegal and disqualified. As can be seen in the shot below BOR90's rudder increases the length measurement substantially. The more usual definition of length measurement is 'the aftermost point of intersection of the HULL with its waterline plane' meaning that the rudder and such appendages are exempt.

As the rules were published after the BOR90 yacht was launched, the Challenger is in the position of having to possibly shorten their yacht to comply.

While SNG will not doubt point out that the rules are the same as used in 1988, the issue did not arise as KZ-1 had her rudder forward of the waterline, under the hull, and Stars and Stripes at 65ft was well under the 90ft LWL maximum.

Also SNG would have been well aware of the measurement rules they were going to adopt well in advance of constructing their yacht, and only released these just days before the last Supreme Court Hearing.

Boies is also expected to pick up on the fiduciary responsibility of Societe Nautique de Geneve, as Trustee of the America's Cup. This aspect was also traversed by Team New Zealand in their action against SNG, with David Boies again performing the legal navigation - before the whole case was dropped in order to achieve Alinghi's acceptance of an invitation to race in the Louis Vuitton Pacific Series earlier this year in Auckland.

Clearly David Boies' role will be to get a foot in the legal door, on any of a number of legal fronts which all go directly central issue - that of fairness of the competition.

A look at the fundamental clause of the competition: 'This Cup is donated upon the condition that it shall be preserved as a perpetual Challenge Cup for friendly competition between foreign countries' would also be an interesting exercise, given the antics of the past two years; Boies undoubted expertise in the area of fiduciary responsibilities of trustees and their ilk; and the application of the 'Four Corners' doctrine regarding the Deed of Gift.

To our eyes, striking secret deals with the governing body of the sport, over which the Challenger has major issues; and staging the regatta in a venue over which your competitor has security concerns, real or otherwise, doesn't meet the 'friendly competition' condition of the Deed of Gift.

But that is for the Court to decide.