First, I want to preface this by saying I am not picking on StockX or trying to say that their Terms and Conditions treat customers unfairly because arbitration provisions like this really are industry standard in almost all online agreements. GOAT, eBay, Amazon and many other sneaker and online retailers have the same language in their Terms and require users to do the same thing. I am using their terms as an example because my law firm is the Sneaker Law Firm and I use their Services a lot and am familiar with them. I am pointing this out simply for educational purposes to inform you about your rights as a guest or registered user of StockX (or other companies) website, mobile app, or uses any StockX Services, such as buying or selling DS sneakers or streetwear.
The StockX Terms and Conditions of Use (Last Updated: Jan. 8, 2021) requires the USER (yes you) to send StockX a letter opting out of mandatory arbitration for all disputes, specifically class action lawsuits. You have 30 days from the first time you accepted the online terms to send this letter. If you do not provide this notice during that timeframe then you cannot bring a class action lawsuit against StockX in court. Instead, your exclusive remedy for dispute resolution is through binding arbitration with an arbitrator using Michigan laws.
*There are some exceptions to the notice requirements above. If you do not sent notice of your intent to opt out of arbitration you still have the ability to bring an individual lawsuit in small claims court, however that lawsuit cannot advance into a class action lawsuit in another court.
Most Arbitration clauses provide you the ability to opt out within a certain time. Companies try to make it difficult for you by hiding this information in online terms and requiring you to send snail mail to a specific address in hopes that it deters you from actually sending the notice.
Why is this important?
In August 2019, StockX suffered a security breach that allegedly impacted the data of 7 million users. Some of those users attempted to bring a class action lawsuit against StockX for failing to protect their personal information and making deceptive statements following the data breach, however a federal judge in Michigan granted StockX’s motion to go to Arbitration and denied the class action lawsuit only one month ago (around Dec. 23, 2020). The Judge said that the plaintiffs arguments will be heard by an arbitrator because the plaintiffs clicked and accepted the online Terms and Conditions multiple times without opting out.
Hopefully you never have a dispute with StockX or anyone really. If you do, it is always best to reserve all your rights and not limit your options in the future. By following the Opt-Out Procedures in Section 14.e of the StockX Terms and Conditions and providing your simple letter of notice you can preserve your right to class action lawsuits and not be pigeon holed into arbitration.. If you opt out of arbitration at first you can still decide to arbitrate when the dispute arises so there really is no downside.
Here are some best practices for Arbitration Clauses
- Most arbitration clause can be found in the section called “Arbitration.” “Disputes” or “Dispute Resolution.” The sneaker websites I looked at for this article had them under “Disputes.”
- Do not click ‘Agree’ before reading the Terms and Conditions. Almost all online agreements have arbitration clauses.
- The companies hope that you just click through and do not read them, and although that is usually true it is not a good defense to have in court.
- Take note of the section the arbitration clause is in and download the terms so you can keep them.
Keep a copy of your letter. Asl for confirmation of receipt and keep good records.
Have a standard letter than you can use for all your online retail shopping or at a minimum our favorite sites where you store a lot of personal information or data.