THE CUP// Good Grief
28th January, 2010 - Posted by club - No Comments
Part 54 – The gift that keeps giving, and giving, and giving
“Make smoke.” Command for a defensive destroyer tactic.
 |
(January 24, 2010) – We have Société Nautique De Genève’s (SNG) papers in opposition to Golden Gate Yacht Club’s (GGYC) Constructed in Country (CiC) motion to DSQ SNG and SNG’s CiC Cross Motion to DSQ GGYC (surprise, surprise). First of all, what is going to happen on the return date, January 28, 2010? Not much. The clerk will call the calendar in Room 130 (not room 148 as appears on the papers). If the law firms’ paralegals get to the right room, they will hand up the papers the law firms previously served on each other, the clerk will take the papers, check the affidavits of service, and put them in a folder. That is it. The folder for these motions will then be logged in and eventually sent to Justice Kornreich’s chambers, which will then instruct the clerk that oral argument should be scheduled (oral argument is mandatory in the Commercial Division).
Almost certainly, because of the February 8, 2010 Match date, Phil Bowman from David Boies’ law firm (for GGYC) will be on the phone with Justice Kornreich’s law clerk requesting an early hearing rather than the normal wait of about two weeks. Based upon the papers thus far, Bob Giuffra of Sullivan & Cromwell, SNG’s latest law firm is not likely to be in any hurry for a hearing, so it is entirely possible that nothing will happen before February 8. Indeed, unless GGYC’s papers are a walk off home run, the chances of any decision before February 8 are pretty slim.
So, what is Giuffra up to? Standard top quality large firm defense. SNG’s combined papers have four broad elements: 1) GGYC’s Motion is procedurally improper; 2) as Justice Ciparick ruled back in the day in Mercury Bay, the parties should go race and bring any complaints to the court when they are done; 3) Alinghi 5 is CiC and fully Deed compliant, and 4) USA is not CiC, not compliant with its challenge, and not Deed compliant. Elements 1 and 2 could be written on a picture post card and decided pretty quickly on another picture post card. Points 3 and 4 are the ones that make your hard drive sag and are designed to prevent a quick decision.
All of the motions in this case have been “at the foot of the judgment,” (to enforce the judgment) handed down by Justice Cahn and affirmed by the Court of Appeals. Essentially, they enforced the provisions of the judgment setting the date and venue and prevented SNG from DSQ’g USA and aborting the Match. SNG’s previous counsel never questioned the propriety of the procedure, apparently believing that rants would carry the day under any procedure. Giuffra is a lot smarter and is acting like a lawyer, by raising procedural issues, rather than a brawler. He argues that a new action, or at least a full blown proceeding with discovery, witnesses and a trial is necessary, rather than this motion to enforce the judgment. Unfortunately for GGYC, the CiC issue is getting pretty far from Justice Cahn’s judgment. Even worse for GGYC, the motion seeks to DSQ Alinghi 5 and/or delay the Match, the opposite of the previous decisions.
However, to get past a prompt resolution, Giuffra has shown that there are real fact issues to be decided on the CiC issues and that former Justice (now Judge) Ciparick’s Mercury Bay decision to put disputes off until after the Match should be followed. That is where issues 3 and 4 come into play and why the papers are so voluminous and attempt to raise so many issues. Against him is GGYC’s argument that the CiC issue should be decided now to avoid a pointless Match and a do over.
GGYC’s job on its reply on its motion and answer to SNG’s cross-motion is to cut though those papers and show why there is really nothing there. Although difficult, the job is not impossible as, rather than being like a cake (the current reigning CiC metaphor), SNG’s papers are more like whipped cream or cotton candy – a little bit of substance and a lot of air.
Considering the motions requires remembering the basics. First of all, it is the words within the four corners of the Deed that count. On these motions, nobody has argued that any of the relevant words are ambiguous, so the only way that practice in 1887 is relevant is if there is any dispute about the definition of the words. The word constructed is not exactly archaic. Secondly, Justice Kornreich ruled on the Rules 49 – 54 motion that this is a wide open technology competition and, unless prohibited by the Deed, any technology goes. Thirdly, the relevant term is “constructed,” not designed, and certainly not patented or invented.
A substantial portion of SNG’s papers attempt to capitalize on an extremely dumb, rookie mistake GGYC made in its paper. For some reason I cannot fathom, GGYC raised a 1980’s NYYC interpretation of the Deed which sought to include design within CiC. Not only is that interpretation clearly wrong, but SNG itself repealed it, so SNG is in no position to raise it. Nevertheless, given the multinational design process of both boats (apparently none of Alinghi 5’s designers are Swiss nationals and who knows where anyone was actually sitting every time they had an idea), bringing up the irrelevant design issue is like dropping your pants in court. Experienced lawyers make sure they do not raise their own red herrings and will omit an argument if there is a possibility it can be either turned against them or used as a distraction.
The end result is that SNG submits affidavits and pages of legal argument beating the design issue to a bloody pulp in an attempt to gin up a real issue from GGYC’s mistake. The issue should not count and it is GGYC’s job to put it to bed convincingly if it wants a prompt ruling on the motion.
The real meat of SNG’s argument is a 19 page (plus exhibits) declaration from my good friend John Rousmaniere, the dean of AC writers, laying out the history of sails in the AC, going back to the original pre-AC race in which the NYYC won the Cup in the first place. By and large that is a history of gentlemanly “friendly competition between foreign nations,” in which allowances were made so that a reasonably fair match could be sailed. Of course, given the heavy betting on the matches by the gentlemen involved, NYYC ran them pretty much the same way the casinos operate at Las Vegas, Atlantic City or anywhere else. The challengers were given enough of a chance to induce them to come and bet, but not enough of a chance to actually win – until 1983 when the house actually had to pay off.
John’s declaration also discusses how the friendly competition was concerned with the “model” (hull shape) favored by Americans versus the markedly different “model” (hull shape) favored by the Brits. Knowing John’s expertise, I am sure his discussion in on the mark. However, for the Court’s purposes, it is the wrong mark. The practice was clearly designed to produce a decent Match, just as Michael Fay argued in Mercury Bay, but Fay lost in the Court of Appeals (and previously in the Appellate Division, First Department), because, under New York law only the words of the Deed count. The Deed specifies that the competing vessels propelled by sail alone (i.e., not by stored power or mixed stored power and sails, as was common) must be CiC. If that was not the practice of the day, in that nobody cared whether sails were CiC, that practice does not make any difference. Indeed, SNG’s quotes from John’s declaration that “a ‘fundamental idea’ underlying the 1882 [1887?] Deed of Gift is that ‘The America’s Cup cannot survive without good, close racing.’” That was exactly the position rejected by the Court of Appeals when it ratified one of the biggest blow outs in sailing history because the Deed did not provide for anything of the sort – unless the parties were smart enough to work it out through the mutual consent process.
Indeed, until Michael Fay appeared on the scene, there had never been a default DoG Match. Every one had been by mutual consent. If anything, the fact that sail provenance eventually became an issue even in mutual consent matches in the late 20th century tends to indicate that the CiC issue regarding sails had always been lurking, but nobody cared until the foreign nations started getting good enough to be a real threat. Thus, it is the words of the Deed that count, regardless of how that jibed with practice in 1887 or thereafter.
If sails do have to be CiC, and the language of the Deed seems to say so, SNG’s evidence that they are Swiss is pretty thin. First of all, its affidavits are almost wholly conclusory – a pejorative term used by lawyers and judges to describe affidavits which set forth conclusions without detailing the evidentiary basis, based upon personal, firsthand knowledge, for those conclusions. For example, the evidence on sail construction is studiously vague. It boils down to the claim that the sails were built in pieces in Minden and shipped to Switzerland for seaming and finishing. Amazingly, the affidavits do not even say how many pieces we are talking about. One can only assume that it may be only two or three, which were then combined to produce the finished sail. That sounds a lot like constructed in the USA. Nothing is stated about the number of man hours expended in Minden, Nevada or the number of hours it would have taken to finish them in Minden. It might well be that 90% of the man hours necessary to complete the sails in Minden were performed in Minden. Again, the Court is not told.
SNG also submits affidavits detailing that the Swiss government (or some Canton’s government) certified the sails as constructed in Switzerland. Please. Every time I open up a Made in USA product I find a collection of Chinese or other nation’s pieces. Governments accommodate their industries with Made in Whatever policies dreamed up by lobbyists. That is fine for those purposes, but has no relevance to this inquiry. Besides, does anyone really believe that, if asked, the Swiss authorities would DSQ SNG’s boat?
While SNG’s papers are generally well done, given the facts Giuffra has to work with, jumping into a complicated subject matter this late in the game begins to show in the cross motion. Other than a recent letter to the Scuttlebutt editor stating that Dennis Connor’s wing was protested by New Zealand and Okayed by the International Jury, I have never heard anyone argue that a hard sail is not a sail – until now. The fact is that hard and soft sails are simply foils designed to generate lift, just as soft hang glider wings and hard F-22 Raptor wings are foils designed to generate lift. (SNG has an incomprehensible sentence trying to differentiate marine from aero applications which is simply factually wrong.) The only differences between hard and soft foils is that hard foils are much more efficient and that, until the late 20th century, materials allowing the engineering of foils that could reverse the direction of the lift generated, so that a sailboat could sail on both tacks, were not available. USA’s foil is only unprecedented in size and engineering execution. Being two, rather than three elements, it is actually pretty basic as hard sails go.
SNG also has a really silly argument that sails have to be of flat, woven, foldable material, based upon some old dictionary definitions of sail (woven) and the AC 32 protocol (foldable). I am sure one can find a 19th century dictionary stating that boats are made from wood, iron or steel. So what? And what does the AC 32 protocol have to do with anything? Justice Kornreich has ruled that this is a wide open technology competition – a wide open 21st Century competition. If aerodynamic film works better that cotton duck, so be it. The result is still a sail. Besides, although the term woven, which weaves in and out of SNG’s papers (with more time they probably would have cut it out), the fact is that 3DL sails are not woven at all and certainly are not built out of flat pieces. The fibers cross each other, but are not woven into a warp and woof. They are built curved. So the argument hurts SNG as much as it helps SNG.
In an example of the fact that no bad idea ever goes away, the keel yacht issue has once again reared its ugly head, this time in its sloop rig incarnation. Sloop is as irrelevant as keel was. For those that have forgotten, GGYC’s Notice of Challenge was copied in haste from Michael Fay’s New Zealand challenge. Keel was unnecessary surplussage ruled not to matter. The Deed allows one and two masted vessels and requires that the challenge specify the Challenger’s “rig.” It does not specifically require that the number of masts be specified – which is the important piece of information. Obviously, “rig” is shorthand for the number of masts, which otherwise would not be specified. How that mast is rigged does not make any difference. For all the Deed requires, it could be square rigged, lateen rigged, sloop rigged or cat rigged. It does not make any difference. One mast in the challenge gets you 90 feet LWL and two masts gets you 115 LWL. That is all that counts.
SNG brings the silliness to the next level by claiming that a sloop must carry a headsail at all times upwind. Really? Has anyone ever seen a sloop DSQ’d for dropping its jib before it hoists its chute? Has anyone ever seen a sloop rigged dinghy DSQ’d for dropping its jib when it was badly overpowered or its jib halyard broke. Indeed, has anyone seen a ruling that a Laser or Finn is not a sloop?
If that were not enough, SNG argues that USA is not a sloop because the hard sail is not a mainsail. At least they are consistent. Of course, a standard technique in survival conditions is to run home under jib alone. Indeed, when things get really out of hand, some dinghies can plane and surf downwind on jib alone. It is not very pretty, but they are not DSQ’d.
In any event, surplussage does not count. Many years ago the U.S. Supreme Court was presented with a case in which the defendant was accused of a crime that required that the Government prove elements A, B and C for a conviction. In an excess of prosecutorial zeal, the indictment charged that the defendant’s acts included A, B, C and D. D was pretty nasty, but not an element of the crime. The government proved A, B and C, but could not prove D, so the defendant asked that his conviction be reversed. He stayed in jail. The Supremes ruled that D was surplussage and did not need to be proved. Sloop, like keel yacht is surplussage and irrelevant.
In line with its people who live in glass houses argument on the cross motion, SNG claims that USA uses an engine that is not CiC and a hydraulic system that is constructed in Italy. The evidence is pretty thin. Although the AP article cited by SNG says that the engine is a BMW engine, none of the quotes from Jimmy Spithill and Russell Coutts identify the brand of the engine. Indeed, while BMW sells marine diesels, BMW Oracle Racing and BMW have been silent on the subject of the engine. BMW builds vehicles in South Carolina, but does not build engines or transmissions there. While BMW could assemble an engine in the U.S. (or get my neighbor to do it in his garage), it probably cannot build an engine from scratch in the U.S. But, of course, the silence all around would make sense if the engine is built in the U.S., but not by BMW – not exactly something to trumpet on a BMW Oracle Racing boat. In any event, SNG’s evidence barely rises to the level of insinuation.
Giuffra also seems to have fallen into the trap of the right hand not knowing what the left hand is arguing. In the response to GGYC’s CiC motion, SNG argues that the Alinghi 5’s sails are not part of the vessel because the U.S. government says that the engines on U.S. vessels do not have to be built in the U.S. The equivalence between sails and engines is clearly not in the statute or regs, but only by analogy. But, of course, if SNG is right, then GGYC gets a free ride on its engine.
As to the hydraulic system, the only evidence is some Cariboni web pages and some pictures of boxes that were shipped to Anacortes, Washington in June 2008 from Cariboni in Italy. There is no evidence that those parts are on USA or were even destined for USA (Larry Ellison and BMW Oracle Racing do have a couple of other boats). The web pages are entirely consistent with Cariboni parts in other BMW Oracle Racing boats and design work on the hydraulic systems on USA. The whole point of building boats in Anacortes is that virtually any high tech part can be built by the aerospace shops in the neighborhood. It is like Canal Street in New York’s Chinatown on steroids. They can knock off anything you want – especially if you have the designer’s permission and, better yet, drawings.
That is not to say that SNG is wrong on the engine or the hydraulic systems. It just has not come forward with anything at this point. Presumably, GGYC is lying in the weeds ready to slam-dunk SNG on these issues and thereby argue that SNG’s claims are not worthy of discovery or any consideration at all. On the subject of bad ideas, GGYC needs to ditch the term “off the shelf,” which is surpassingly meaningless, being both over and under inclusive. After all, one can buy an off the shelf race ready Farr 40.
So, will SNG succeed in pushing these motions off until the Match has been sailed? That depends on what GGYC has to say in response. Stay tuned. This case is the gift that keeps giving, and giving, and giving.
No Comments
No Comments
Leave a reply