African-American syndicate seeks America’s Cup injunction

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Given new life by a June appellate court ruling, an African-American sailing syndicate has asked for an injunction to stop America’s Cup racing until the court rules on its complaint that the Golden Gate Yacht Club did not act in good faith in denying the syndicate’s application to race against Oracle Team USA for the right to defend the America’s Cup.

In a letter to the court, African Diaspora Maritime Corp., a Raleigh, N.C., sailing syndicate headed by Charles Kithcart, an African-American yachtsman and professional mariner, asks for a decision on African Diaspora Maritime’s July 17 request before Sept. 7, when the winner of the challenger series is scheduled to race against defender Oracle Team USA.

In its filing for the injunction in the New York Supreme Court, African Diaspora Maritime says, “Under the protocol promulgated by GGYC that governs [America’s Cup] 34 … the submission of ADM’s application obligated GGYC to do two things: it was required ‘to review’ the application in good faith and it was required to ‘accept those [applicants] it is satisfied have the necessary resources … and experience to have a reasonable chance of winning…’ As alleged in ADM’s amended complaint, the yacht club breached those obligations by rejecting ADM’s application for purely pretextual and ever-shifting reasons.”

In a June 25 ruling, Justice Roland Acosta of the Appellate Division of the New York Supreme Court, upheld a lower court’s dismissal of two counts against the yacht club — breach of trust and breach of fiduciary duty by self-dealing — but said there was an enforceable contract between the yacht club and African Diaspora Maritime and enough grist for the lower court to consider whether the yacht club had acted in bad faith in reviewing African Diaspora Maritime’s application.

Responding to African Diaspora Maritime’s request for the injunction, the yacht club on July 18 filed an appeal to the 3-1 appellate court decision. In its appeal, the yacht club quotes the lone dissent in that case of Justice Peter Tom: “To permit a contract action to be maintained by any person or group that has been denied the right to participate in an athletic event would subject the courts to a potentially enormous volume of litigation. … Indeed, under the majority’s theory anyone rejected not only from a sporting competition but a college or a job, not matter how obviously unqualified, would have cause of action by making unfounded allegations of ’bad faith’ in the application review process.”

In a letter to the lower court, the yacht club asked it to wait to consider the request for the injunction while the club’s appeal is pending.

Jim Flannery

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