New Zealand Loses a Leg in America’s Cup Court Battle

Sail America President Malin Burnham wasn’t sure at first. Dennis Conner thought he had won. But their lawyer, Jack Zepp, had no doubts at all that New Zealand’s America’s Cup challenge had been stopped, at least temporarily.

“We won today,” Zepp said after Judge Carmen Beauchamp Ciparick of the New York State Supreme Court ruled Wednesday that:

- The San Diego Yacht Club can proceed with plans to defend the Cup whenever and wherever it chooses. (A week ago it had planned to announce that the defense would be in San Diego in 1991, but that plan was shelved when the Kiwis obtained a temporary restraining order to stop all preparations.)

- Auckland merchant banker Michael Fay and the Mercury Bay Boating Club of New Zealand will be kept out of San Diego’s separate petition to amend the Cup’s Deed of Gift to permit the defender, not the challenger, to determine both the class of boats to be used in the Cup regatta and the dates of the races.

- Judge Ciparick will consolidate both issues--the San Diego petition and the New Zealand challenge--and receive more written legal arguments until Sept. 18, then render a final decision as soon as possible.

‘Good Day for the Cup’

Sail America’s chief operating officer, Thomas F. Ehman Jr., speaking from his San Diego office, said, “Well, it’s a good day for the Cup. . . . It’s a great day for all of us.”

A formal announcement about the location and dates of the 1991 regatta could be made as soon as Friday, though Ehman said there is a possibility that the announcement may be delayed until after the judge has rendered a decision on the interpretation of the Deed of Gift.

“It depends on what our lawyers think is best in the overall case,” Ehman said. He minimized Fay’s chances of still winning in court, noting that lawyers for the yacht club and Sail America believe the temporary restraining order would have been extended if the New Zealand challenge had a reasonable likelihood of success.

The crux of the dispute involves an interpretation of the 100-year-old deed as written by George L. Schuyler, the last surviving donor of the Cup to the New York Yacht Club.

San Diego maintains that the Cup has grown beyond Schuyler’s original comprehension of the event into a multinational, standard-boat affair, which would have been compatible with Schuyler’s intent for “competition between friendly nations.”

Fay, however, issued his challenge under the letter of the deed, which would allow a challenger to designate the time and the boat he intends to sail.

Schuyler died 97 years ago, only three years after writing the deed. Nobody can be certain what he really had in mind, so it’s up to the judge now.

Conner, who had stopped off in New York en route home from competing in the maxi world championships at Sardinia, seemed confused about the legal machinations in the old Supreme Court building in downtown Manhattan.

“But it sounds to me like the judge said: ‘Go ahead with your plans.’ I don’t think she would have said that if she didn’t think things were gonna work out in favor of the (San Diego) Yacht Club,” Conner said.

New Zealand withdrew its application to extend the temporary restraining order because, Fay said, “The purpose of it was to get the case into court. Now that the judge will decide the case on its merits, we’re satisfied.

“San Diego can go ahead with its plans (for 1991). We’re going to build a (90-foot) boat.” The New Zealand challenge calls for racing in boats that are 90 feet at the waterline rather than in 12-meter yachts, the type of boats used in Cup races since 1956, which are about half the size of what Fay wants to use.

Fay still hopes he will eventually win out, but Conner noted: “He looked like he had a pretty long face.”

In a prepared statement released later in the day, Fay said: “We wanted an early hearing on the validity of our challenge and we’re pleased that (the judge) thoroughly evaluated the issues at today’s hearing. Because she has said she will give us an expeditious decision on the merits of our case, we withdrew our request that the existing temporary restraining order against the San Diego Yacht Club continue.”

In the event the judge orders the yacht club to accept Fay’s challenge, she said she will extend the June, 1988, date of New Zealand’s challenge by as many days as it takes her to reach a decision.

That would take the time pressure off San Diego to build a 90-foot boat that would be competitive with Fay’s new craft.

Mayor Present

Also present at the hearing was San Diego Mayor Maureen O’Connor, who said she was there “to look after the city’s interests.” O’Connor was joined by Assistant City Atty. Curtis Fitzpatrick and other aides.

She was delighted that San Diego was given the authority to proceed with its plans.

“They didn’t put any restraints on anything--the site or the date,” she said, “so it looks good for San Diego.”

One surprise at Wednesday’s hearing was that 2 hours and 12 minutes of oral arguments took place in the judge’s closed chambers in order to reduce courtroom formalities that could have bogged down such a complex proceeding.

“We objected to that,” said David G. Samuels, an assistant New York state attorney general who represented Atty. Gen. Robert Abrams, but he didn’t press the point.

At one point, Samuels suggested that the judge should dismiss the whole case because it was so frivolous that it was a waste of the court’s time.

Abrams’ office was involved because of the nature of the Deed of Gift, which is regarded as a charitable trust. On Tuesday Abrams held a press conference to throw his support behind San Diego.

Fay’s lawyer, George N. Tompkins Jr. of New York, objected to the attorney general’s intervention.

“The attorney general’s part is to protect the interests of the beneficiaries of the trust, which is the general public,” Tompkins said. “Instead, he’s protecting San Diego’s interest.”

Tompkins conceded, however, that his argument was “not gonna win.”

Both sides came armed with public-relations people and lawyers, but San Diego had the better numbers. San Diego’s cause was carried by six lawyers representing the city and Sail America. Zepp, from the New York branch of Latham & Watkins--the law firm representing Sail America--was the principal attorney, but he generally deferred to Samuels.

The judge announced her decision after a recess of a little more than two hours. Her final findings are expected by the end of the month.

Times staff writer Armando Acuna in San Diego contributed to this story.