The case arose because of a collision between the 120-foot restored J Class boat Endeavour and the 72-foot yacht Juno racing on the Mediterranean. The Juno established an overlap from clear astern and at least 60 feet to leeward of Endeavour. Both boats were sailing off the wind, each on her proper course, and Juno was sailing a slightly higher course than Endeavour. Neither boat changed course, and Endeavour's boom collided with Juno's rigging, resulting in serious damage.

The suit for damages was heard in the U.S. court system because the Endeavour returned to the United States after the race, and was impounded while cruising in Maine. Determining which set of rules applied was of great importance because, under the racing rules, Endeavour was at fault, whereas under the government rules Juno, an overtaking boat, was at fault.

Judge Torruella's decision reviews past cases involving damage or injury incurred during sailboat races. His conclusion is based on the following reasoning:

1. Nothing in the history of the government rules "indicates that they were meant to regulate private sports activity in which participants have waived their application and in which no interference with non-participating maritime traffic is implicated."

2. Whenever competitors sail in a race, they are notified by a mandatory statement in the sailing instructions that the racing rules apply (see Rule J1.1(2)). Fundamental Rule 3(a) states, "By participating in a race conducted under [the racing rules], each competitor … agrees to be governed by the [racing rules]." To this, Judge Torruella writes, "When one voluntarily enters a yacht race . . . a private contract results between the participants requiring their compliance [with the racing rules]."