Suburban Leisure Center, Inc. v. AMF Bowling Products, Inc.

Suburban Leisure Center, Inc. (Suburban) (plaintiff) distributes lawn and leisure equipment. AMF Bowling Products, Inc. (AMF) (defendant) manufactures pool tables and pool table supplies. Suburban and AMF entered an oral franchise agreement giving Suburban the right to use AMF’s trade name, trademark, and service mark to sell AMF’s products in Suburban’s stores. Suburban and AMF later entered a separate written e-commerce agreement in which Suburban agreed to deliver and install AMF’s products for AMF’s customers near Suburban. The e-commerce agreement contained an arbitration clause providing that all disputes between Suburban and AMF would be subject to binding arbitration in Richmond, Virginia. The e-commerce agreement also contained a merger clause which stated that the e-commerce agreement constituted the entire agreement between the parties and superseded all prior agreements. Finally, the e-commerce agreement stated that commerce between Suburban and AMF would be governed by Virginia law. On August 25, 2005, AMF sent a letter to Suburban terminating the oral franchise agreement and requiring Suburban to cease promoting AMF’s line of pool tables in its stores within sixty days. Suburban filed suit in Missouri state court seeking damages from cancellation of the oral franchise agreement. AMF removed the matter to federal court. AMF filed a motion to dismiss or, in the alternative, a motion to compel arbitration pursuant to the arbitration clause in its e-commerce agreement with Suburban. The district court denied AMF’s motion to compel arbitration, and AMF appealed.