Case of the Day: Magi XXI, Inc. v. Vatican City State
Posted on May 9, 2013
The case of the day is Magi XXI, Inc. v. Stato della Città del Vaticano (2d Cir. 2013). The Vatican Office of Publications, an instrumentality of the Vatican City State, entered into a license agreement with Second Renaissance, LLC, under which it granted Second Renaissance the right to produce and market products based on reproductions of artifacts in the Vatican Library. Under the agreement, Second Renaissance had the right to sublicense its rights under certain conditions.
Second Renaissance entered into a sublicense agreement with Magi under which Magi would have the right to produce “candles, chocolates, confections, flowers, stamps, wrapping paper/gift bags, and fundraising materials, which would bear the name, logo, and seal of the Vatican Library.” Both the master license agreement and the sublicense agreement had a forum selection clause. The master license agreement required all disputes between the Vatican Office of Publications and Second Renaissance to be resolved in the Vatican courts and governed by Vatican law. The sublicense agreement required all disputes between Second Renaissance and Magi to be resolved in the Vatican courts and governed by Vatican law.
In 2007, Magi sued the Vatican City State. The claim was that Second Renaissance had made misrepresentations to Magi in connection with the negotiation of the sublicense agreement,1 and that the Vatican knew of the misrepresentations when made, and Second Renaissance was acting as the Vatican’s agent. The Vatican moved to dismiss on grounds of improper venue. The judge granted the motion, and Magi appealed. The Second Circuit affirmed.
The trick in the case is that while the Vatican/Second Renaissance agreement had a forum selection clause, and while the Second Renaissance/Magi agreement had a forum selection clause, there was no agreement between the Vatican and Magi. The Second Circuit held that the Vatican was entitled to enforce the forum selection clause in the Second Renaissance/Magi agreement because it was “closely related” to Second Renaissance, which had signed the agreement, and it was foreseeable to Magi that the Vatican would be entitled to enforce the clause.
Photo credit: Hans-Gerd Maus-Trauden