Amendments to Cup Rules Key, Burnham Says : Yacht Club Sees Clear Sailing Despite Challenge

San Diego America’s Cup officials said Wednesday they are confident they can scuttle New Zealand’s extraordinary challenge in a hearing before the New York State Supreme Court next week.

Auckland merchant banker Michael Fay has challenged to sail for the Cup next June in a boat with a 90-foot waterline instead of a 12-meter boat three or four years from now, as would be customary for post-war Cup competition.

Sail America Foundation President Malin Burnham said, “It is our contention that Fay’s challenge does not even begin to hold water.”

Even Burnham had to smile at his remark, but it wasn’t as happy an occasion as originally anticipated. On Monday, while the media were being alerted to the press conference at the San Diego Yacht Club to learn the site (San Diego) and dates (spring or fall, 1991) of the next defense, Fay’s U.S. lawyers were obtaining a temporary restraining order in New York to prevent further planning or public discussion of their plans.

Posturing and Pontificating

So instead of banners and balloons, it was a day for posturing, pontificating and unintentional puns, the sum of which was that Fay was acting like a poor sport in a gentleman’s game.

To the contrary, the America’s Cup has a long history of turmoil in its 136 years.

But Burnham, the only official speaker, first read his own statement denouncing the banker’s action to “drag one of the world’s premier sporting events into a court of law” and alluded to Fay’s “determination to manipulate and control the terms of the matter for his own advantage and to the evident disadvantage of all the other challengers for the Cup.”

Though not disputing that Fay’s challenge, under the aegis of the Mercury Bay Boating Club--”I had never heard of the Mercury Bay Boating Club,” Burnham said--complies with the basic terms of the 100-year-old Deed of Gift that governs the Cup, yacht club and Sail America officials maintain that latter-day “enabling resolutions” should override the original archaic stipulations.

“You should not isolate your thinking to that document,” Burnham said.

Instead, he frequently referred to the deed as the “living Deed of Gift,” implying an ongoing interpretation of its conditions.

Key Resolutions Cited

Though reporters were provided with no physical evidence of those enabling resolutions, Burnham cited three that would preclude Fay’s challenge.

One, he said, calls for multinational challenges and another stipulates that the event “should not be contested annually” but instead should not occur more often than every three years.

Fay has said his challenge should be considered first because it was submitted first (July 17), but Burnham had an enabling resolution answer to that, too.

“It was determined by the New York Yacht Club in another enabling resolution that any challenge received within six months of the last race would be deemed to have been received at an equal time of all other challenges received within that same six-month period,” Burnham said. “That period expired Aug. 4, prior to which we had numerous challenges from around the world. Mr. Fay is now asking us to take his out of the heap and treat it in a preferential manner.”

Burnham is a former world-class sailor with deep roots in San Diego and wealth generated through three generations of real estate and insurance business. The Fay challenge is an emotional issue for him.

“We haven’t taken the gloves off yet,” he said. “We will if we have to.”

But he wasn’t pulling many punches Wednesday, either. After his formal remarks, he noticed Laurent Esquier, who, as the operations director for Fay’s syndicate, has been in San Diego for a few weeks checking out possible sites for 1988.

‘A Royal Pain’

“Say hello to Sir Hemorrhoid for me,” Burnham told Esquier.

“Who?” Esquier asked.

“Fay,” Burnham said. “That’s what the Europeans are calling him. They say he’s a royal pain in the ass.”

Burnham said Sail America has “14 signed affidavits from (syndicates) around the world” that want to sail in 12-meters in 1991, not in bigger boats in 1988.

He said the America’s Cup should be contested like the Olympic Games and the World Cup, “open to all nations, all competitors, while (Fay’s proposal) would eliminate 90% of the potential entrants.”

Burnham and Fay have been adversaries before--first, in the battle Burnham led at Fremantle to have core samples taken from Fay’s controversial fiberglass boat, and later, when Stars & Stripes eliminated New Zealand’s KZ7 in the challenge trials. The Kiwis then defied tradition and chose to help the Australian defender, Kookaburra III, prepare for the finals against the Americans.

Fay said by phone from New Zealand on Wednesday that the only reason he filed for legal action was that he hadn’t received a formal response from San Diego.

“We were left with no alternative other than to seek affirmation of our challenge from the court.”

New Zealand Is Silent

Fay declined to respond to any specific points raised at Wednesday’s press conference because the matter is in litigation.

Reminded that Australian and British syndicates also planned to build boats with 90-foot waterlines for 1988, Burnham said, “We have satisfied ourselves that they were subsequently submitted after the New Zealand challenge strictly for defensive purposes.”

John Marshall, the Sail America trustee who was the design team director for the successful Stars & Stripes campaign, said something good may come from the New Zealand problem.

“Malin’s on record in view of the unsportsmanlike position that Fay has taken, but when something like that is hanging over an event, it does cast a shadow,” Marshall said. “Clearing this thing up and getting vindication for Sail America’s position as trustee is important. The quicker the better. It’s in no one’s interest to drag it on.

“It’s just a shame they timed it so accurately to cast a pall over San Diego’s party (Wednesday). There’s no question that they did. I have for the last three days been attempting to set up a phone conference with Fay and (syndicate associate Andrew) Johns, and they have dodged it to the point where the next word we had was the service of papers.”

Marshall also gave Fay credit for challenging in a boat with a 90-foot waterline, the maximum allowed by the deed.

“Big boats are faster than smaller boats,” Marshall said, “so a clever person would challenge in the largest boat in order not to face a boat larger still.”

Esquier said, as the lawyers for both sides prepared their cases, that construction was starting on the New Zealand boat at the Marten Boatworks in Auckland this week.

“All the material is there,” he said. “The lofting (construction) is starting.”

Club Must Prove Point

The hearing is scheduled for Wednesday in New York City. The San Diego Yacht Club must show cause why a preliminary injunction should not be issued against its prohibiting the club from considering any challenges other than New Zealand’s, and why an order should not be issued declaring the challenge valid and enforceable.

If the club fails to satisfy the court on either point, it must show cause why the Cup should not revert to the custody of Australia’s Royal Perth Yacht Club, which held it from 1983 until Feb. 4, when Dennis Conner won it back.

Conner was in Sardinia, Italy, to sail in the world maxi championship series Wednesday.

Paul Downey, press secretary to San Diego Mayor Maureen O’Connor, said the city attorney’s office is working with Sail America’s lawyers and “exploring options to protect the city’s interest” in the matter.

Sail America’s counsel, Ken Poovey said the issues are clear, despite an apparent conflict between the original deed and subsequent enabling resolutions.

“It isn’t really that cloudy to a lawyer if you think of the U.S. Constitution,” Poovey said. “Do you think the U.S. Constitution is just what was written by hand on a piece of parchment? Or do you think the Constitution as it has evolved and been interpreted over the years by courts and the government has been changed in subtle and not-so-subtle ways by custom and tradition? It’s the latter, isn’t it?

Trying to Set Clock Back

“The enabling resolutions would be on a par with the pronouncements of our Supreme Court. There’s a whole series of them. What Fay is trying to do is set the clock back to 1937.”

Maybe even 1887, when the deed was written by George L. Schuyler and assigned to the custody of the New York court.

Burnham said, “We have no interest at all in taking a step backward into boats that were discarded 40-some years ago.”

His reference was to the giant J-boats used in the races in the 1930s.

Marshall disputed Fay’s argument that it would be cheaper to build and tune one larger boat in one year than a series of 12-meters over three or four years.

“That’s bull,” Marshall said. “There’s time to build two, but a 90-foot boat with (a crew of) 40 people? Just think of the beefsteak to feed them. Those things wouldn’t even go under the Sydney Harbor Bridge.”

The principals denied that the club and Sail America, though seeming to lightly dismiss Fay’s challenge earlier, had been caught off guard by his court action.

“There have been signs that Fay would attempt some sort of power play,” Marshall said.

“We didn’t know how far he would go,” Burnham conceded, “but we figured the possibility of him taking legal action was 50-50. We’ve been doing our homework. We could meet him in court this afternoon.”