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AMF INC. v. BRUNSWICK CORP.

November 4, 1985

AMF INCORPORATED, Plaintiff,
v.
BRUNSWICK CORPORATION, Defendant



The opinion of the court was delivered by: WEINSTEIN

MEMORANDUM and ORDER

WEINSTEIN, Ch. J.:

 In this case of first impression, AMF Incorporated seeks to compel Brunswick Corporation to comply with their agreement to obtain a non-binding advisory opinion in a dispute over the propriety of advertising claims. For reasons indicated below, the agreement to utilize an alternative dispute resolution mechanism must be enforced.

 I. FACTS

 AMF and Brunswick compete nationally in the manufacture of electronic and automatic machinery used for bowling centers. In earlier litigation before this court, AMF alleged that Brunswick had advertised certain automatic scoring devices in a false and deceptive manner. Brunswick responded with counterclaims regarding advertisements for AMF's pinspotter, bowling pins and automatic scorer. In 1983 the parties ended the litigation with a settlement agreement filed with the court. Any future dispute involving an advertised claim of "data based comparative superiority" of any bowling product would be submitted to an advisory third party, the National Advertising Division ("NAD") of the Council of Better Business Bureaus, to determine whether there was experimental support for the claim.

 Paragraph 9 of the agreement reads as follows:

 
If either party shall hereafter publish or disseminate any claim by advertisement or promotional materials of any kind or nature, which expressly or impliedly refer to a comparative superiority of a bowling product manufactured, sold or distributed by either of them, as compared to a similar product manufactured, sold or distributed by the other, which claim shall expressly or impliedly be based on data, studies or tests (hereafter "data based comparative superiority") such claims shall be subject to the provisions of this paragraph . . . .
 
Should either party make a claim to data based comparative superiority, the other may request that substantiation for the same be delivered to the agreed upon advisory third party, subject to the provisions of this agreement, whereupon the party who has made the claim shall promptly comply.
 
Both parties agree to submit any controversy which they may have with respect to data based comparative superiority of any of their products over that of the other to such advisory third party for the rendition of an advisory opinion. Such opinion shall not be binding upon the parties, but shall be advisory only. . . .

 NAD was created in 1971 by the American Advertising Federation, American Association of Advertising Agencies, Association of National Advertisers, and the Council of Better Business Bureaus "to help sustain high standards of truth and accuracy in national advertising." It monitors television, radio, and print advertising, and responds to complains from individual consumers, consumer groups, local Better Business Bureaus, competitors, professional and trade associations, and state and federal agencies. If NAD finds that the advertising claims are unsupported, and the advertiser refuses to modify or discontinue the advertising, the organization will complain to the appropriate governmental authority. See Statement of Organization and Procedures of the National Advertising Review Board, at P2.1A. Voluntary compliance with NAD's decisions has been universal. Reportedly no advertiser who has participated in the complete process of a NAD investigation and NARB appeal has declined to abide by the decision.

 In March and April 1985, Brunswick advertised its product, Armor Plate 3000, in a trade periodical called Bowler's Journal. Armor Plate is a synthetic laminated material used to make bowling lanes. It competes with the wood lanes produced by AMF. "The wood lane. A relic of the past," claims the advertisement, under a sketch of a horse and buggy. It goes on to detail the advantages of Armor Plate; and, as indicated in the footnote to the advertisement, strongly suggests that research supports the claim of durability as compared to wood lanes.

 
By replacing your worn out wood lanes with Armor Plate 3000, Brunswick's high tech laminated surface, what you're doing is saving money. Up to $500.00 per lane per year in lost revenue and upkeep.
 
That's because today's high technology has helped make Armor Plate 3000 so tough and good looking that it seems to last forever.*

 AMF, disputing the content of the advertisement, sought from Brunswick the underlying research data referred to in the footnote. Brunswick replied that having undertaken the expenses of research it would not make the results available to AMF. Thereupon AMF informed Brunswick that it was invoking Paragraph 9 of the settlement agreement and requested that Brunswick provide substantiation to an independent third party. Brunswick responded that its advertisement did not fall within the terms of the agreement. AMF now brings this action to compel Brunswick to submit its data to the NAD for nonbinding arbitration.

 II. The Agreement Covers the Dispute

 The agreement on its face covers the dispute. It provides, in relevant part, that:

 
If either party shall [1] hereafter publish or disseminate any claim by advertisement or promotional materials of any kind or nature, which [2] expressly or impliedly refers to a comparative superiority of a bowling product manufactured, sold or distributed by either of them, as compared to a similar product manufactured, sold or distributed by the other, [3] which claim shall expressly or impliedly be based on data, studies or tests (hereafter "data based comparative superiority") [4] such claims shall be subject to the provisions of this paragraph . . . .

 (Emphasis supplied.) The advertisement (1), was published after the agreement of June 30, 1983. It (2), impliedly refers to comparative superiority of a Brunswick bowling product over one of AMF. It is (3), impliedly based on data and tests. Thus (4), the dispute is subject to the agreement.

 The agreement also provides for a method of substantiation of the claim without resort to litigation. It reads:

 
Should either party make a claim to data based comparative superiority, the other may request that substantiation for the same be delivered to the agreed upon advisory third party, subject to the provisions of this agreement, whereupon the party who has made the claim shall promptly comply.
 
Both parties agree to submit any controversy which they may have with respect to data based comparative superiority of any of their products over that of the other to such advisory third party for the rendition of an advisory opinion. Such opinion shall ...

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