Spooner v. Multi Hull Foiling Ac45 Vessel "4 Oracle Team United States
| Decision Date | 18 March 2015 |
| Docket Number | Case No. 15-cv-00692-JCS |
| Court | U.S. District Court — Northern District of California |
| Parties | JOSEPH ROBERT SPOONER, Plaintiff, v. MULTI HULL FOILING AC45 VESSEL "4 ORACLE TEAM USA," et al., Defendants. |
Plaintiff Joseph Spooner brings this admiralty action for wrongful termination of a "maritime services contract," both in personam against Defendant Oracle Racing, Inc. ("Oracle Racing") and in rem against 4 Oracle Team USA, a hydrofoiling AC45-class racing catamaran (the "Vessel"). Components of an AC45 catamaran have been arrested by the United States Marshal, based on a warrant issued by the Clerk pursuant to Supplemental Rule C(3)(a)(ii) of the Federal Rules of Civil Procedure and this Court's Admiralty Local Rule 3-1(b). Oracle Racing now requests that the arrested property be released. The Court held a hearing on March 17, 2015. For the reasons stated below, Oracle Racing's request is GRANTED, and the arrest warrant issued in this case is VACATED.1
As relevant background to this action, the Court takes notice of the undisputed facts that (1) the America's Cup is a long-established international sailing competition; (2) Oracle Racing, in conjunction with the Golden Gate Yacht Club, is the defending America's Cup champion afterwinning the 34th America's Cup on San Francisco Bay in 2013; and (3) the 35th America's Cup will be held in a class of boats other than the AC45, likely 62-foot AC62-class racing catamarans.2
Spooner served for eleven years as a sailor for Oracle Racing and its predecessor organizations, which have at times competed under the name Oracle Team USA. See FAC ¶ 4. Spooner's previous contracts with Oracle Racing provided that he could not be dismissed without cause. Id. ¶ 18 & Ex. F.
After the conclusion of the 34th America's Cup, Oracle Racing's CEO Russell Coutts expressed reluctance to extend a new contract to Spooner for the 35th America's Cup, noting concern that Spooner's age could affect his physical fitness. Id. ¶ 14. Spooner had at that time recently turned 40. Id. At Coutts' request, Spooner prepared a letter setting forth the reasons he was qualified for the team, including that he had outperformed most of his teammates in physical fitness tests. Id. ¶¶ 14-15 & Ex. C. Coutts reconsidered, and offered Spooner a contract with Oracle Racing for the 35th America's Cup. See id. ¶ 17. In an email, Coutts told Spooner that he "ha[d] a heads of terms ready" and identified certain "major items," without discussing the contract's terminability. Id. ¶ 17-18 & Ex. E. Spooner alleges that he signed the contract "under pressure" due to rumors that Coutts might withdraw unsigned contracts out of frustration with other sailors considering offers from other teams. Id. ¶ 19.
The contract at issue is a letter agreement titled "Heads of Terms for AC35—Sailing Team—Joseph Spooner." Id. ¶ 20; Simmer Decl. Ex. A ("Contract," dkt. 10-1).3 It is between Oracle Racing, referenced therein as "OTUSA" (an abbreviation of Oracle Team USA), and Allegro Yachting Ltd. ("Allegro," referenced in the contract as the "Company"), an apparent corporate entity located at a post office box in the United Arab Emirates. See generally Contract.Spooner signed on behalf of Allegro, listing his title as "Sailing Team Member." Id. at 6. The contract states that Allegro "shall procure that [Spooner] shall provide, perform, and deliver such duties and services required of him as a member of the Sailing Team of OTUSA (the 'Services'), reporting to Russell Couts." Id. ¶ 5. Nothing in the contract identifies any particular vessel that Spooner would sail. See generally id.
In return, Oracle Racing would pay Allegro $7,500 per month from February 1, 2014 through June 30, 2014, and $25,000 per month for the remainder of the contract, as well as a bonus if Oracle Racing successfully defended the America's Cup and Allegro or Spooner "remain[ed] engaged by OTUSA at the expiry date of the appointment." Id. ¶ 9. The contract defines the expiry date as "the date that is seven (7) days immediately following the date of the final race of the 35th America's Cup Finals"—"[u]nless terminated earlier in accordance with this Heads of Terms." Id. ¶ 3. Paragraph 12, titled "Notice Period," addresses the contract's terminability:
Notice Period: Either OTUSA or the Company may terminate this Heads of Terms for any reason whatsoever at any time by giving no less than two (2) weeks' prior written notice of termination.
Id. ¶ 12 (emphasis added). The contract also provides that Allegro "acknowledges and accepts (for and on behalf of itself and [Spooner]) that nothing in this Heads of Terms or otherwise guarantees that [Spooner] will be part of the crew for any particular race or regatta in which OTUSA participates, in [America's Cup 35] or otherwise." Id. ¶ 5. Excluding signatures, the contract is less than five full pages long. See generally id.
Spooner is a citizen of New Zealand and was in New Zealand at the time the contract was executed. FAC ¶ 27. At that time, the parties believed that the 35th America's Cup would take place in the United States. Id. ¶¶ 13, 33. Spooner entered the United States in December of 2013 on a visa waiver program, but needed to obtain a visa in order to work in the United States. Id. ¶¶ 27-28. With Oracle Racing's assistance, he applied for and obtained an "O-1" visa, which may be issued to an athlete of extraordinary achievement to participate in an athletic event or a series of such events. Id. ¶¶ 27-36. The applicable regulations state that "in the case of an O-1 athlete, the event could be the alien's contract," 8 C.F.R. § 214.2(o)(3)(ii), and Spooner presented the contractwith Oracle Racing as evidence supporting his visa application. FAC ¶ 30. Spooner alleges that although an Oracle Racing employee stated that Spooner would be reimbursed for his expenses obtaining the visa, Oracle Racing has not reimbursed $2,995 that Spooner paid an immigration attorney for that purpose. Id. ¶ 34 & Exs. J, K.
After obtaining the visa, Spooner conducted repair work on an Oracle Racing AC45 vessel in San Francisco. Id. ¶ 39. According to Spooner, he and another teammate were tasked with making repairs while other teammates did not yet have work visas, and he would not have been able to do that work without a visa. Id. ¶ 38.
In December of 2014, Bermuda was selected as the venue for the 35th America's Cup. Id. ¶ 41. Oracle Racing issued a "relocation plan" outlining compensation, travel, and housing arrangements for its employees. Id. ¶ 42 & Ex. P. Spooner's correspondence with Oracle Racing indicated that he fell within the "Long Term / Relocation" class of employees for the purpose of the relocation plan. Id. ¶¶ 42-43 & Ex. Q.
Spooner determined that his relocation compensation would not adequately cover the cost of relocating his family to Bermuda, and requested a salary increase from $25,000 per month to $38,000 per month. Id. ¶ 45. Spooner was initially told that compensation was not negotiable, but team manager Tom Slingsby later told Spooner that Coutts and general manager Grant Simmer might be willing to compromise. Id. Spooner sent an email to Oracle Racing leadership on January 15, 2015 stating that he had "made a commitment to Oracle Team USA and [was] therefore not prepared to resign," but asking that Oracle Racing provide third-party mediation of his request for greater compensation. Id. ¶ 47 & Ex. R.
The next day, Simmer sent a letter to Spooner and Allegro stating that Oracle Racing would not increase compensation or provide mediation, and that "in light of [Spooner's] stated position that [he would] not otherwise relocate to Bermuda," Oracle Racing was giving notice of termination of the contract effective January 31, 2015. Id. ¶ 48 & Ex. S.
The First Amended Complaint names the "Multi Hull Foiling AC45 Vessel 4 Oracle Team USA" as the in rem defendant. Oracle Racing previously submitted a declaration by Grant Simmerstating that the only vessel meeting that description currently located in San Francisco was under construction and not launched until after Spooner's termination, and asserts in its Request for Release that a similar vessel that Spooner previously sailed on had been sold to a French team in December of 2014. Simmer Decl. ¶ 7; Request for Release at 8. Spooner has stated in two declarations that he sailed on and repaired the San Francisco vessel in 2014, and that a separate vessel—5 Oracle Team USA, also known as "Boat 5"—was sold to the French team. Spooner Opp'n Decl. (dkt. 38-1, under seal) ¶¶ 1-3; see also Spooner Am. Decl. (dkt. 15). Spooner's declaration attaches a photograph of the French team standing around an AC45 bearing the serial number "AC 45 0005." Spooner Opp'n Decl. ¶ 4 & Ex. A. Oracle Racing has submitted a declaration by Mark Turner, the team's "Boat Building Manager," stating that "Oracle Racing has included the logo '4 ORACLE TEAM USA' on the outer hull of at least two different AC45 yachts—one being [serial number] AC45 0005 and the other being AC45 0012." Turner Decl. (dkt. 40-1) ¶ 2. According to Turner, the "4" in the logo is unrelated to the vessel's serial number. Id.
Spooner states that there has never been "more than one boat with the number 4 marking on the side of the vessel." Spooner Opp'n Decl. ¶ 10. He states that, based on photographs taken by the United States Marshal, the vessel that is currently under arrest is the vessel that he previously sailed and worked on. Id. ¶ 7-9. In addition to the name or logo on the side of the vessel, Spooner states that he recognizes certain modifications that he made to the vessel. Id. Turner, on the other hand, states that Spooner sailed the vessel with serial number 0005 (), and that based on the Marshal's...
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