America’s Cup Lawsuit Dismissed

Published on February 12th, 2016

San Francisco, CA (February 12, 2016) – A federal judge dismissed without prejudice an America’s Cup sailor’s claim that Oracle Team USA breached his contract by blaming him for a crewmate’s mistake, though the judge found it “difficult to imagine” how the sailor could successfully amend his lawsuit.

U.S. District Judge Vincent Chhabria found Wednesday that Matthew Charles Mitchell lacks standing to pursue the lawsuit he filed last year, but gave him 14 days to amend it.

Mitchell claimed that Oracle blamed him for nonparty Simeon Tienpont’s violation of the rules: adding weight to a race boat, in the form of resin.

Mitchell claimed “that the team’s failure to suspend or fire Tienpont caused Mitchell to become a scapegoat in disciplinary proceedings before the America’s Cup jury,” Chhabria wrote in his summary of the case. “In other words, Mitchell seems to believe that if the Oracle Team had suspended or fired Tienpont, the America’s Cup jury would somehow have treated Mitchell differently during disciplinary proceedings.

“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.” (Citation omitted.)

However, Mitchell’s lawyer insisted on Thursday (Feb 11) that if Tienpont had been suspended or fired, the America’s Cup jury would not have gone after Mitchell. Attorney Patricia Barlow said it was significant that the judge’s order included to what the jury knew about Tienpont’s involvement.

Mitchell, who had been hired to help prepare for the 34th America’s Cup, sued Oracle Racing dba Oracle Team USA in July last year. He sought $400,000 in damages.

The main event in 2013, featuring 72-foot catamarans in San Francisco Bay, was preceded by the America’s Cup World Series, for which the Oracle Team prepared three 45-foot multihull race boats called AC45s.

Before the race, and official discovered that lead and resin had been added to an AC45. Mitchell claimed that his reputation was hurt and he was excluded from sailing in the first four America’s Cup races because Oracle Team did not suspend or fire Tienpont for the extra weight.

He said he did not perform any work on the kingpost, nor did he supervise Tienpont, who did do the work.

The kingpost is a sturdy post near the bow that rises above the deck.

After a two-day hearing in 2013, the America’s Cup International Jury decided that Mitchell probably participated in filling the kingpost with heavy resinous material.

Chhabria ruled on Wednesday that even if Mitchell had standing to sue, he cannot claim that Oracle Team acted in bad faith, or refusing to fire or suspend Tienpont constituted negligence.

“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,” Chhabria wrote. (Parentheses in ruling.)

Admiralty law gives employers the right to fire an employee unless it would violate a specific provision of the employee’s contract, and Oracle Team’s decision to retain Tienpont did not violate Mitchell’s employment deal, Chhabria said.

The judge concluded that Mitchell had not made a plausible claim that Tienpont’s continued employment caused Mitchell any actual harm.

Punitive damages were also taken off the table, because without substantive claims, Mitchell cannot seek them as a remedy.

Though Chhabria gave Mitchell 14 days to amend his complaint, he wrote that it would be “difficult to imagine how Mitchell could amend his complaint … to allege either standing or a legitimate theory of liability based on the Oracle Team’s failure to suspend or fire Tienpont.”

But attorney Barlow said Mitchell plans to press ahead.

“We have reviewed the order and we now have to explain how Oracle’s treatment of Tienpont would have caused Mitchell’s injury,” Barlow said.

Oracle Team’s attorney, Ashley Baltazar with Hanson Bridgett, did not respond to phone and emailed requests for comment.

Source: Courthouse News Service

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