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Lawsuit Filed for Arrest of America's Cup Boat

In the latest chapter of a dramatic legal battle over the America's Cup AC45 "4 Oracle Team USA", a federal judge has ordered the arrested AC45 released from judicial custody after hearing arguments from both sides yesterday.  Team Oracle is now free to ship the AC45 to Bermuda, where it is expected to be based in the lead-up to the America's Cup World Series.   Chief Magistrate Judge Joseph C. Spero wrote the lengthy opinion order explaining that while in theory wrongful termination of a seaman's contract could support a maritime lien and therefore merit arresting a vessel, in Spooner's case, his employment contract was not sufficiently tied to a particular vessel to support a lien.  Spooner's contract provided that he would perform duties required of him as a member of Team Oracle, but did not specify that his duties would be performed on a particular vessel, or any vessel at all.  While Spooner's lawsuit against Team Oracle will proceed, Spooner's legal team will not have the benefit of holding the AC45 hostage in their negotiations with Team Oracle.

Joe Spooner succeeded in obtaining an arrest warrant for "4 Oracle Team USA," Team Oracle's AC45, which was arrested by U.S. Marshals on March 10, 2015. The Federal Court denied Spooner's first request to arrest the vessel in February, finding that Spooner's complaint failed to show that Team Oracle wrongfully discharged him, given that the Spooner's contract allowed Oracle to fire Spooner "for any reason whatsoever." In response, Spooner's legal team quickly changed tactics, and amended their complaint to allege that Spooner provided "necessaries" to the vessel, giving rise to a federal statutory lien which would allow it to be arrested.

Liens for "necessaries" are normally granted to marinas for dockage fees or ship suppliers or repairers for work performed on the vessel. Spooner now claims a "necessaries" lien arising from Team Oracle's failure to reimburse him for his O-1 work visa, and for repairs allegedly performed on the AC45 but not paid for. In addition, Spooner's legal team employed a risky strategy to get the warrant issued without a federal judge's review, by alleging that the AC45's imminent departure for Bermuda was an exigent circumstance that warranted the arrest of the vessel without waiting for the judge. Whether these claims will hold up on review is uncertain, but Oracle's attorneys will almost certainly request an emergency hearing before the court to determine whether the AC45 should be set free.

The new court filings and the AC45's arrest have heightened the drama surrounding this lawsuit. Reportedly, the AC45 was packed into cargo containers and was about to be transported to Bermuda (where it would be outside of the Federal Courts' jurisdiction) when the U.S. Marshals arrested it. For the full text of the amended complaint that secured a warrant to arrest the AC45, click here.

Joe Spooner, Oracle Racing's former grinder and crew for two America's Cup titles and three Fastnet Race wins, is claiming a seaman's lien against the vessel for approximately $725,000 in unpaid wages, plus punitive damages, for an alleged wrongful discharge by Team Oracle. In the amended complaint, Spooner filed emails with the court indicating that Team Oracle released Spooner because he was getting too old to compete.

Under maritime law of the United States, the vessel itself can be sued in Federal Court and be arrested by the U.S. Marshals pending the outcome of the suit.

The AC45 foiling multihull is raced in the America's Cup World Series and used for America's Cup training It is a smaller version of the AC72 raced in the 2013 America's Cup.  

For more information on admiralty and maritime law, click here.
You can read the amended complaint here.
You can read the original complaint here.

We will keep you updated as the case developes.

AC45 4 Racing

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