Mercari Rewrites Arbitration Rules With New Court Carveouts

Mercari is updating its US Terms of Service November 5, changing arbitration rules to allow users to go to court for certain types of relief while adding broader exceptions for Mercari itself.

The company notified users October 6 that Section 22, "Legal Disputes and Use of Arbitration," is being updated, providing the following summary:

We are updating Section 22, “Legal Disputes and Use of Arbitration,” which governs how disputes between you and Mercari are resolved.

The updated section clarifies that requests for public injunctive relief or provisional relief are excluded from arbitration and may be pursued in court. Public injunctive relief generally seeks to prevent future harm to the public, while provisional relief includes temporary measures such as a temporary restraining order or preliminary injunction.

Otherwise eligible claims and requests for relief—including damages, restitution, and other injunctive relief—remain subject to arbitration, even when they arise from the same facts or are included in the same cause of action as a request for public injunctive or provisional relief.

As always, users are encouraged to read the entire updated terms carefully, but Value Added Resource compared the new and current versions side by side to identify some of the important changes.

Disclaimer: comparisons are made using both automated and manual methods and are provided for informational purposes only. No warranty of completeness or accuracy is expressed or implied and users are advised to do their own due diligence.

Court Exceptions

Mercari's current terms broadly require almost all disputes between users and the company to be resolved through binding arbitration, with an exception allowing qualifying claims to be filed in small claims court.

Current Version:

You and Mercari each agree that any and all disputes or claims at law or equity that have arisen or may arise between you and Mercari relating in any way to or arising out of this or previous versions of these Terms, your use of or access to the Service, any goods sold, offered, or purchased through the Service, or any payments processed for goods sold, offered or purchased through the Service, SHALL BE RESOLVED EXCLUSIVELY THROUGH FINAL AND BINDING ARBITRATION, rather than through other legal proceedings in court, except that you may assert a claim in small claims court, if it meets the criteria for such.

The new terms spell out certain requests that can be taken to court instead of arbitration, including public injunctive relief or temporary court orders such as restraining orders and preliminary injunctions.

But that exception is limited. If a case also seeks money damages, restitution or other types of relief based on the same alleged conduct, those parts of the dispute can still be required to go through arbitration.

ALL OTHER ELIGIBLE CLAIMS, ISSUES, AND REQUESTS FOR RELIEF NOT EXPRESSLY EXCLUDED ABOVE, INCLUDING REQUESTS FOR INJUNCTIVE RELIEF, DAMAGES, OR RESTITUTION, SHALL BE RESOLVED IN ARBITRATION AS A DISPUTE, EVEN IF PLEADED UNDER THE SAME CAUSE OF ACTION OR BASED ON THE SAME FACTS OR TRANSACTIONS AS A REQUEST FOR PUBLIC INJUNCTIVE OR PROVISIONAL RELIEF.

Public injunctive relief generally means asking a court to stop conduct that could harm the public, rather than seeking compensation for harm to one individual. The new terms expressly carve those requests out of arbitration, while other claims arising from the same dispute can still be required to go through arbitration.

Broader Exceptions For Mercari

Mercari did not mention another significant change in the email sent to users. The new terms separately exclude several types of claims brought by Mercari itself from mandatory arbitration.

YOU AND MERCARI AGREE THAT “DISPUTE” AS DEFINED IN THIS AGREEMENT DOES NOT INCLUDE ANY CLAIM OR CAUSE OF ACTION (A) BY MERCARI FOR: (1) TRADE SECRET MISAPPROPRIATION; (2) PATENT INFRINGEMENT; (3) COPYRIGHT INFRINGEMENT OR MISUSE; (4) TRADEMARK INFRINGEMENT OR DILUTION; OR (5) INJUNCTIVE RELIEF

There is no equivalent exception in the current version.

The change is not framed as a new right for Mercari to sue sellers, but rather as an exception removing certain claims brought by Mercari from the arbitration requirement. Those include trade secret, patent, copyright and trademark claims, along with claims seeking injunctive relief more generally.

The user-facing exception is more limited. Users can take requests for public injunctive or provisional relief to court, but other requests for injunctive relief remain subject to arbitration.

Class Actions And Mass Arbitration

Users are already required to bring claims individually rather than through class or representative actions. The updated terms make that restriction more explicit, including class arbitration, and say any relief awarded in arbitration generally applies only to the individual bringing the claim.

Mercari's rules for handling large numbers of similar arbitration claims also appear to remain largely unchanged. When 25 or more related claims are filed by the same or coordinated attorneys, the cases are handled in stages, with groups of individual arbitrations followed by mediation before unresolved claims can eventually move to court.

That process is relevant because attorneys are currently recruiting Mercari users for mass arbitration efforts involving alleged biometric privacy violations and deceptive pricing practices. There is no indication this update is connected to those claims.

Arbitration Opt-Out

The updated Section 22 says arbitration applies "unless an individual opts out," but existing Mercari users are not being offered a new opportunity to reject the arbitration agreement.

The opt-out provision remains limited to new users and requires written notice by mail within 30 days after accepting Mercari's Terms of Service for the first time.