Subject: [NEXTEL-1] More Bad Luck For Craig-OneWorld Is Penalized, but Avoids Disqualification

From: Marcel <[email-masked]>
Date: Mon, 09 Dec 2002 17:39:42 -0500

http://www.nytimes.com/2002/12/09/sports/othersports/09BOAT.html

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December 9, 2002

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Today's News Past Week Past 30 Days Past 90 Days Past Year Since 1996

YACHT RACING
OneWorld Is Penalized, but Avoids Disqualification
By WARREN ST. JOHN

UCKLAND, New Zealand, Monday, Dec. 9 — The America's Cup arbitration panel ruled today that the Seattle syndicate OneWorld had broken Cup rules by having possession of a computer and a disk of design secrets belonging to Team New Zealand.

Although it did not disqualify OneWorld, the panel penalized OneWorld one victory in the semifinals and, should it advance, a victory in both the finals of the Louis Vuitton challenger series and the America's Cup match in February. OneWorld was also fined $65,000.

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Although the penalties are severe, the panel cleared OneWorld on the most serious allegation, that its boats were essentially copies of Team New Zealand designs. That charge was levied by Team Dennis Conner and the Italian team Prada along with their sponsoring yacht clubs, which together had asked that OneWorld be thrown out of the competition altogether.

The decision is sure to have ramifications for the reputation of the America's Cup and its five-member arbitration panel, which was set up to keep Cup disputes out of the courts. By issuing its ruling after two days of hearings, the judges seemed to be sending a signal that the panel could handle the sorts of arcane squabbles for which the competition has become known.

"I think it's impressive," John Rousmaniere, an author and Cup historian, said of the decision. "While it seems messy, the decision is pretty quick and decisive, and certainly establishes a standard of behavior for syndicates."

On the other hand, the panel may have gone a long way toward formalizing the role of legal battles as simply another component of the competition, up there with technology and sailing. The dispute involved hundreds of pages of testimony and lawyers from Mississippi to Auckland. To make its case, OneWorld took depositions from 32 people.

The decision came after two days of hearings in Auckland. With Conner and Prada charging OneWorld with copying boat designs from Team New Zealand, the proceedings hinged on a single obtuse question: How similar is similar? With thousands of components and subtle variations in hull shapes to analyze, comparing OneWorld's boats to its rivals proved no easy task.

"They're similar in the way all white guys are similar," a design expert, Robert H. Perry, told the panel. "They share some ingredients in the way some things contain two cups of sugar and other things contain one cup of sugar."

The case had its origins in the breakup of Team New Zealand after the last America's Cup, when several team members took big-money offers from upstart syndicates in the United States and Europe. The skipper Russell Coutts and his tactician, Brad Butterworth, fled to the Swiss team Alinghi. OneWorld, backed by the cellphone entrepreneur Craig McCaw, hired several of Team New Zealand's designers.

Jim Farmer, a Team Conner lawyer, argued that OneWorld hired the former Team New Zealand members simply to rebuild their winning design, in violation of the rules. OneWorld, he said, "was running down the track while everyone else was struggling to catch up."

Iain Thain, a OneWorld lawyer, countered that Conner's team was essentially arguing that a designer could take his plans and drawings with him after a Cup, "but not his brain."

The panel seems to have bought Thain's argument. But it took a dim view of an admission by Ian Mitchell, a former Team New Zealand designer who works for OneWorld, that he had an old Team New Zealand computer and disk in his garage for two years after he was asked to return it. Mitchell testified that he had never used it, and that he had eventually chopped it to bits with scissors.

"I shouldn't have done it," Mitchell told the panel.

The panel's decision is a blow for Team Conner, which has been eliminated from the competition and had hoped to be reinstated if OneWorld was disqualified.

After today's decision, Conner's team announced it would drop its protest against OneWorld, effectively ending his ninth Cup campaign. "I'm not mad or angry," Conner said. "I abide by their decision. My visceral feeling is we've had our day in court."

OneWorld had hoped to get leniency for admitting it had possession of the disks. Bob Ratliffe, the team's executive director, said, "This is a stunning indictment of honesty, to be penalized for telling the truth."

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Yacht Racing: This America's Cup Squall Takes Place Onshore
(December 6, 2002)

Yacht Racing: America's Cup: Lawyers, Hulls and Money
(December 1, 2002)

Yacht Racing: Team Dennis Conner Is Eliminated
(November 29, 2002)

Yacht Racing: Arbitration Panel Moves Up Hearing Date for OneWorld
(November 28, 2002)

Yacht Racing: Jury to Hear Protest Affecting Cup Trials
(November 27, 2002)

Joint Petition Is Filed to Have OneWorld Disqualified
(November 25, 2002)

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