The opinion of the court was delivered by: Roslynn R. Mauskopf, United States District Judge.
Plaintiff Magi XXI, Inc. (f/k/a E-21 Inc.) ("plaintiff") brings this action against defendants Gerald Colapinto ("Colapinto"), Second Renaissance, LLC ("SRLLC") and Stato della Cittel Vaticano a/k/a The Holy See (the "Vatican State"), alleging, inter alia, fraud, negligence, breach of contract, unjust enrichment, and conversion in connection with the defendants' alleged failure to provide access to artwork, artifacts, manuscripts, and other items in the Vatican Library's collection. Plaintiff asserts jurisdiction pursuant to 28 U.S.C. §§ 1330, 1331, 1332, and 1367.
The Vatican State has filed separate motions to dismiss the amended complaint for (1) improper venue based on forum selection clauses contained in sublicense agreements or, alternatively, for forum non conveniens, and (2) lack of subject matter jurisdiction. (Doc. Nos. 92, 104.) Plaintiff opposes both motions.*fn1 Plaintiff and defendants Colapinto and SRLLC have also filed a joint, unopposed motion to vacate this Court's August 21, 2008 Order compelling arbitration. (Doc. Nos. 82, 100.) For the reasons stated below, the Vatican State's motion to dismiss on the basis of the forum selection clauses is GRANTED, and the joint motion to vacate the Court's prior Order compelling Plaintiff and defendants SRLLC and Colapinto to arbitrate in the Vatican is also GRANTED.
Plaintiff is a New York corporation with its principal place of business in Long Beach, New York. (Am. Compl. (Doc. No. 12) ¶ 1.) The Vatican State is the territory over which the Holy See exercises sovereign dominion, and is recognized under international law as a juridical person distinct from the Holy See.*fn3 (Id. ¶ 2; Decl. of Paolo Cavana in Supp. of Mot. to Dismiss, executed Jan. 11, 2010 ("First Cavana Decl.") (Doc. No. 95) ¶¶ 26--34.) The Holy See is the governmental and spiritual head of the Roman Catholic Church and, in the person of the Pope, is the sovereign of the Vatican State, recognized by over 150 states as a sovereign government. (First Cavana Decl. ¶¶ 28, 30.) Former defendant Ufficio Vendita Pubblicazioni e Riproduzioni dei Musei Vaticani ("UVPR"), or the Office of Sales of Publications and Reproductions of the Vatican Museum, is alleged to be an agency or instrumentality of the Holy See. (Am. Compl. ¶ 3.) Dr. Francesco Riccardi was allegedly at all relevant times the Administrative Manager of UVPR. (Id. ¶ 3.) Former defendant Biblioteca Apostolica Vatican ("BAV"), or the Vatican Library, is also alleged to be an agency or instrumentality of the Holy See. (Id. ¶ 4.)*fn4 Defendant SRLLC is a California limited liability company that has its principal place of business in Corona, California. (Id. ¶ 5.) Defendant Gerald Colapinto, the President and managing member of SRLLC, is also a resident of California. (Id. ¶ 6.)
UVPR has the authority to enter into contracts with third parties for the commercial exploitation of the artwork and artifacts in the Vatican Library (the "Vatican Library Collection"). (Id. ¶ 21.) On or about May 22, 2000, UVPR and SRLLC entered into a Master License Agreement granting SRLLC the rights to produce and market specific lines of products and services based on reproductions and adaptations inspired by items in the Vatican Library Collection and, subject to certain conditions, to sublicense those rights. (Id. ¶ 24.) For example, the Master License Agreement prohibits SRLLC from entering into sublicense agreements unless
(1) UVPR approves the sublicense agreement in writing and (2) the sublicensee "agrees to be bound by the terms and conditions of [the Master License Agreement]." (Decl. of Jeffrey S. Lena in Supp. of Mot. to Dismiss, executed Jan. 11, 2010 ("Lena Decl.") (Doc. No. 94), Ex. A ("Master License Agreement") ¶ 8.) The Master License Agreement also provides that SRLLC will pay a ten percent royalty fee to UVPR based on all revenues received by SRLLC from sublicensees purchasing sublicenses from SRLLC. (Am. Compl. ¶ 25.) Finally, the Master License Agreement also contains a forum selection clause requiring that "[a]ny disagreements between [UVPR] and [SRLLC] shall be resolved exclusively in the Sovereign State of Vatican City" and that such disputes "shall be governed by the laws of the Sovereign State of Vatican City." (Master License Agreement ¶ 13.)
On or about July 18, 2001, plaintiff entered into seven sublicense agreements with SRLLC, entitling plaintiff to access artwork and related items needed to market candles, chocolate, confections, flowers, gift bags, stamps, wrapping paper, and fundraising materials bearing reproductions of images from the Vatican Library Collection, as well as the name, logo, and seal of the Vatican Library collection. (Am. Compl. ¶ 26.) As required by the Master License Agreement, Dr. Francesco Riccardi approved each sublicense agreement and signed an approval form on behalf of UVPR and the Vatican State. (Id. ¶¶ 25--26.) Each sublicense agreement provides that "UVPR is not a party to this Agreement." (See, e.g., Aff. of Claire Mahr in Opp'n to Mot. to Dismiss, executed May 12, 2010 ("Mahr Aff.") (Doc. No. 99), Ex. Q ("Sublicense Agreement (Stamps)") ¶ 9.) The sublicense agreements also contain supremacy provisions under which the terms of the Master License Agreement control if there is a conflict between agreements. (Lena Decl. Exs. B--H ¶¶ 2, 7(b).)
Plaintiff alleges that SRLLC, Colapinto, and the Vatican State failed to provide access to commercially useable and commercial grade images in the Vatican Library Collection, and that they made numerous misrepresentations concerning, among other things, the strength of their relationship with Vatican officials and the amount of access that plaintiff would have to artwork and other items in the Vatican Library Collection. (Am. Compl.¶¶ 27--32.) Plaintiff also alleges that the Vatican State knew about these false and inaccurate misrepresentations prior to approving the seven sublicense agreements. (Id. ¶ 28.) Although the Master License Agreement provides that the relationship between UVPR and SRLLC was "strictly that of principal and independent contractor," plaintiff alleges that SRLLC and Colapinto acted as agents for the Vatican State in the course of breaching the sublicense agreements, making misrepresentations, and committing fraudulent acts. (Id. ¶ 37; Master License Agreement ¶ 9.)
The sublicense agreements contain mandatory forum selection clauses, providing that:
Any disagreements between SRLLC and SUBLICENSEE shall be resolved exclusively in the Sovereign State of Vatican City.
SRLLC and SUBLICENSEE each hereby consents to jurisdiction in the Sovereign State of Vatican City. All disputes relating to this Agreement between SRLLC and SUBLICENSEE shall be governed by the laws of the Sovereign State of Vatican City, and SRLLC and SUBLICENSEE each hereby consents thereto. All proceedings shall be conducted in the English language. (Lena Decl. Exs. B--H ¶ 13(a).) Both the Master License Agreement and each of the sublicense agreements contain identical arbitration clauses, permitting any party to compel binding arbitration in the Vatican. (Id. Exs. B--H ¶ 13(b); Master License Agreement ¶ 13.2.)
Plaintiff commenced this action on July 17, 2007, and filed an amended complaint on October 29, 2007. (Doc. Nos. 1, 12.) On August 21, 2008, the Court granted the joint motion of Colapinto and SRLLC to compel arbitration in the Vatican State. (Doc. No. 51.)*fn5 The parties opted to abandon the arbitration proceedings, however, because of unexpected costs associated with arbitration in the Vatican State. (Doc. No. 60.) On September 3, 2009, plaintiff and defendant SRLLC asked the Court to vacate its Order compelling arbitration. (Id.) At a status conference on October 15, 2009, the Court vacated the stay of proceedings against all three defendants. (Doc. No. 61.) The Court also ordered the parties to submit briefs on the following motions: (1) plaintiff and defendant SRLLC's joint motion to vacate the Court's August 21, 2008 Order compelling arbitration, and (2) the Vatican State's motions to dismiss based on (a) subject matter jurisdiction and (b) the forum selection clauses and/or forum non conveniens. (Id.)
On July 14, 2010, plaintiff and defendant SRLLC filed a joint motion to vacate the Court's Order compelling arbitration in the Vatican. (Doc. Nos. 82, 100.) On October 12, 2010, the Vatican State filed separate motions to dismiss based on (1) subject matter jurisdiction and (2) the forum selection clauses and/or forum non conveniens. (Doc. Nos. 92, 104.)
The Second Circuit gives "substantial deference" to forum selection clauses, especially when "'the choice of [a] forum was made in an arm's-length negotiation by experienced and sophisticated businessmen.'" New Moon Shipping Co. v. MAN B & W Diesel AG, 121 F.3d 24, 29 (2d Cir. 1997) (quoting M/S Bremen v. Zapata Off-Shore Co. ("The Bremen"), 407 U.S. 1, 12 (1972) ("in the light of present-day commercial realities and expanding international trade . . . [a] forum clause should control absent a strong showing that it should be set aside")). Forum selection clauses have "'the salutary effect of dispelling any confusion about where suits arising from the contract must be brought and defended, sparing litigants the time and expense of pretrial motions to determine the correct forum and conserving judicial resources that otherwise would be devoted to deciding those motions.'" Days Inns of Am. v. Memorial Hospitality Corp., 97-CV-2438 (RWS), 1997 U.S. Dist. LEXIS 20135, at *6 (S.D.N.Y. Dec. 17, 1997) (quoting Carnival Cruise Lines, Inc. v. Shute, 499 U.S. 585, 593--94 (1991)).
Neither the Supreme Court nor the Second Circuit has "specifically designated a single clause of Rule 12(b) as the proper procedural mechanism to request dismissal of a suit based upon a valid forum selection clause." Asoma Corp. v. SK Shipping Co., Ltd., 467 F.3d 817, 822 (2d Cir. 2006) (quotation marks omitted) (explaining that the Second Circuit has "refused to pigeon-hole [forum selection clause enforcement] claims into a particular clause of Rule 12(b)"). Here, the Vatican State does not cite to Rule 12(b) in its memorandum of law in support of its motion to dismiss on the basis of the forum selection clauses. Given that the Vatican State moves in the alternative to dismiss on the basis of forum non conveniens -- "a supervening venue provision" -- the Court treats the motion to dismiss based on the forum selection clauses as a Rule 12(b)(3) motion to dismiss for improper venue. Rogers v. Brasileiro, 741 F. Supp. 2d 492, 504 (S.D.N.Y. 2010) (quoting Sinochem Int'l Co. v. Malay. Int'l Shipping Corp., 549 U.S. 422, 429 (2007)); see also Phillips v. Audio Active, Ltd., 494 F.3d 378 (2d Cir. 2007) (affirming in part and reversing in part grant of motion to dismiss for improper venue based on forum selection clause); Universal Grading Serv. v. eBay, Inc., No. 08-CV-3557 (CPS), 2009 U.S. Dist. LEXIS 49841, at *34 n.9 (E.D.N.Y. June 9, 2009) ("courts in the Second Circuit routinely consider requests to enforce a forum selection clause via Rule 12(b)(3) motions to dismiss for improper venue"). This is consistent with the Vatican State's notice of motion, which requests an order dismissing claims against it pursuant to Rule 12(b)(3). (Doc. No. 92.)*fn6
A court determining whether to dismiss a claim based on a forum selection clause must undertake a four-part analysis. Phillips, 494 F.3d at 383. First, the court decides whether the clause was reasonably communicated to the party opposing enforcement of the forum selection clause. Id. (citing D.H. Blair & Co. v. Gottdiener, 462 F.3d 95, 103 (2d Cir. 2006)). Second, the court classifies the forum selection clause as either mandatory or permissive -- i.e., whether the clause requires, or merely permits, the plaintiff to file suit in the chosen forum. Phillips, 494 F.3d at 383 (citing John Boutari & Son, Wines & Spirits, S.A. v. Attiki Imps. & Distribs. Inc., 22 F.3d 51, 53 (2d Cir. 1994)). Third, the court determines whether the clause covers the relevant claims and parties. Phillips, 494 F.3d at 383 (citing Roby v. Corp. of Lloyd's, 996 F.2d 1353, 1358--61 (2d Cir. 1993)).
If the forum selection clause was reasonably communicated, has compulsory force, and covers the relevant claims and parties, it is presumptively enforceable. Phillips, 494 F.3d at 383 (citing Roby, 996 F.2d at 1362--63). To rebut this presumption, the party resisting enforcement of the clause must make a "sufficiently strong showing that 'enforcement would be unreasonable or unjust, or that the clause was invalid for such reasons as fraud or overreaching.'" Phillips, 494 F.3d at 383--84 (quoting The Bremen, 407 U.S. at 15).*fn7
In deciding whether to enforce a forum selection clause, a court may rely on "pleadings and affidavits," Anwar v. Fairfield Greenwich Ltd., 742 F. Supp. 2d 367, 371 (S.D.N.Y. 2010) (citations omitted), but "[a] disputed fact may be resolved in a manner adverse to the plaintiff only after an evidentiary hearing." New Moon, 121 F.3d at 29. Thus, absent an evidentiary hearing, the Court must view the facts in the light most favorable to the plaintiff. See id. (citing Cutco Indus. v. Naughton, 806 F.2d 361, 365 (2d Cir. 1986); AVC Nederland B.V. v. Atrium Inv. P'ship, 740 F.2d 148, 149 (2d Cir. 1984)). The right to an evidentiary hearing, however, may be waived if one is not requested by the parties. See Tradecomet.com LLC v. Google, Inc., No. 10-CV-911, 2011 U.S. App. LEXIS 15425, at *4 (2d Cir. July 26, 2011) (holding that plaintiff forfeited right to evidentiary hearing in connection with motion to dismiss for improper venue based on forum selection clause by failing to request it (citing United States ex rel. Drake v. Norden Sys., 375 F.3d 248, 256 (2d Cir. 2004))).
1. The Forum Selection Clauses Were Reasonably Communicated
A forum selection clause is reasonably communicated if it is phrased in clear and unambiguous language. See Effron v. Sun Line Cruises, 67 F.3d 7, 9 (2d Cir. 1995). Here, the forum selection clauses in the sublicense agreements (and in the Master License Agreement) were reasonably communicated because they are clearly and unambiguously phrased, and appear in standard font in the main body of each contact. (Lena Decl. Exs. B--H ¶ 13(a); Master License Agreement ¶ 13.1.) Plaintiff does not dispute that the forum selection clauses were reasonably communicated.
2. The Forum Selection Clauses Are Mandatory "A forum selection clause is viewed as mandatory when it confers exclusive jurisdiction on the designated forum or incorporates obligatory venue language." Phillips, 494 F.3d at 386 (citing Boutari, 22 F.3d at 52--53). Here, the forum selection clauses in both the sublicense agreements and the Master License Agreement are mandatory because they provide that "[a]ny disagreements between [the parties] shall be resolved exclusively in the Sovereign State of Vatican City." (Lena Decl. Exs. B--H ¶ 13(a) (emphasis added); Master License Agreement ¶ 13.1 (emphasis added).) Plaintiff also does not dispute that the forum selection clauses are mandatory.
3. Scope of the Forum Selection Clauses
To be presumptively enforceable a forum selection clause must cover the relevant claims and parties. Phillips, 494 F.3d at 383. The Vatican State is not a signatory to the sublicense agreements between plaintiff and SRLLC containing the relevant forum selection clauses. (Lena Decl. Exs. B--H ¶ 9 ("UVPR is not a party to this Agreement").)*fn8 Plaintiff argues that the Vatican State cannot, as a non-signatory, enforce the forum selection clauses in the sublicense agreements. (Pl.'s Mem. in Opp'n to Mot. to Dismiss for Improper Venue and/or Forum Non Conveniens ("Pl.'s Mem. in Opp'n") (Doc. No. 97) at 10--13.)*fn9
This argument is without merit. "[T]he fact a party is a non-signatory to an agreement is insufficient, standing alone, to preclude enforcement of a forum selection clause." Aguas Lenders Recovery Grp. v. Suez, S.A., 585 F.3d 696, 701 (2d Cir. 2009) (non-signatory successor in interest to original signatory was bound by forum selection clause) (citing Hugel v. Corp. of Lloyd's, 999 F.2d 206, 209 (7th Cir. 1993)). Indeed, "it is well established that a range of transaction participants, parties and non-parties, should benefit from and be subject to forum selection clauses." Weingrad v. Telepathy, Inc., No. 05-CV-2024 (MBM), 2005 U.S. Dist. LEXIS 26952, at *15 (S.D.N.Y. Nov. 3, 2005) (citation and internal quotation marks omitted) (holding that non-signatory defendants could enforce forum selection clause against plaintiff).
A non-signatory may enforce a forum selection clause when it is closely related to a signatory. More specifically, a non-party to a contract may enforce a forum selection clause if "'the relationship between the non-party and the signatory [is] sufficiently close so that the nonparty's enforcement of the forum selection clause is 'foreseeable' by virtue of the relationship between the signatory and the party sought to be bound.'" In re Optimal, 2011 U.S. Dist. LEXIS 46745, at *39--40 (quoting Direct Mail Prod. Servs. Ltd. v. MBNA Corp., No. 09-CV-10550 (SHS), 2000 U.S. Dist. LEXIS 12945, at *8 (S.D.N.Y. Sept. 7, 2000)); see also Firefly Equities LLC v. Ultimate Combustion Co., 736 F. Supp. 2d 797, 799 (S.D.N.Y. 2010) ("courts in [the Second] Circuit and elsewhere have articulated and applied the 'closely related' doctrine") (collecting cases)); In re Refco Sec. Litig., 10-CV-1868 (JSR), 2009 U.S. Dist. LEXIS 130683, at *40 (S.D.N.Y. Nov. 16, 2009) (Special Master's Report and Recommendation), adopted by 2010 U.S. Dist. LEXIS 5832 (S.D.N.Y. Jan. 20, 2010) ("After Aguas, there can be no dispute that forum selection clauses will be enforced even against non-signatories where they meet the 'closely related' standard."); Novak v. Tucows, Inc., No. 06-CV-1909 (JFB), 2007 U.S. Dist. LEXIS 21269, at *46 (E.D.N.Y. Mar. 26, 2007) (non-signatory defendant could enforce forum selection clause against plaintiff).
Under this standard, the Vatican State is sufficiently related to plaintiff, SRLLC, and the sublicense agreements such that enforcement of the forum selection clauses by the Vatican State was foreseeable. There are multiple grounds for this conclusion: (1) the Vatican State's interests in the sublicense agreements are derivative of and directly related to SRLLC's conduct in entering into and allegedly violating those agreements; (2) SRLLC's rights in the sublicense agreements are derivative of and depend on the rights it acquired from the Vatican State; (3) the Master License Agreement entitled the Vatican State to exercise significant control over the form and content of the sublicense agreements; and (4) plaintiff alleges the signatories (SRLLC and Colapinto) are the non-signatory's (Vatican State) agents for liability purposes and its claims against all three defendants are essentially identical. ...