Minors' Suit Against Facebook is Dismissed as California Federal ...
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ADVERTISING, MARKETING & PROMOTIONS >> ALERT MINORS’ SUIT AGAINST FACEBOOK IS DISMISSED AS CALIFORNIA FEDERAL COURT UPHOLDS FACEBOOK’S TERMS & CONDITIONS A federal district judge in California has dismissed a complaint against Facebook brought by a class of minors alleging that the social media site used their names and likenesses for advertising purposes without having the necessary consent from each individual since, as minors, they were too young to enter into (or be bound by) a contract. The court disagreed, finding instead that Facebook’s terms and conditions – in particular, the Facebook’s Statement of Rights and Responsibilities (SRRs), which the plaintiffs had agreed to upon registering for the site and that gave Facebook the right to use their names and images for commercial purposes – were enforceable against the minors under California law. BACKGROUND The plaintiffs filed a putative class action lawsuit against Facebook seeking damages for its alleged commercial misappropriation of the names and likenesses of minors who use Facebook. They sought declaratory relief and asserted two claims under an Illinois statute prohibiting the “use of an individual’s identity for commercial purposes” without prior written consent. In response, Facebook insisted that it did nothing more than take information its users voluntarily had shared with their Facebook friends and republish it to those same friends, “sometimes alongside a related advertisement,” as part of its sponsored stories and social ad programs. Facebook argued that the complaint should be dismissed because the minors had provided consent by agreeing to SRRs, which governs the use of the Facebook site and which contains a California choice of law provision. The plaintiffs countered that the consent provisions in the SRRs are legally unenforceable as to minors because they represent a type of contract into which a minor cannot legally enter under California Family Code §6701 and, therefore, are void. Alternatively, the plaintiffs argued that the SRRs are voidable under Family Code §6710.3, which provides minors with the ability to disaffirm certain contracts. COURT’S DECISION The court said that the key question was whether Facebook’s SRRs are legally enforceable against minors, and it ruled that they are. MAY 2014 Attorney Advertising 1568 THE BOTTOM LINE The court’s decision is significant as it found that minors had consented to, and were bound by, Facebook’s SSRs. The California Attorney General and other regulators – as well as the class representatives themselves – may seek to reverse this decision in the name of protecting children. However, as minors are increasingly entering into direct relationships with companies for goods and services, greater certainty over what terms will govern that relationship would be welcome by many. Regardless, it is important to note that the California ruling was based solely on a California law and that the applicability of its reasoning in other states, and by other courts, remains to be seen. >> continues on next page
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Transcript of Minors' Suit Against Facebook is Dismissed as California Federal ...
ADVERTISING, MARKETING & PROMOTIONS
>> ALERT MINORS’ SUIT AGAINST FACEBOOK IS DISMISSED AS CALIFORNIA FEDERAL COURT UPHOLDS FACEBOOK’S TERMS & CONDITIONSA federal district judge in California has dismissed a complaint against Facebook brought by a class of minors alleging that the social media site used their names and likenesses for advertising purposes without having the necessary consent from each individual since, as minors, they were too young to enter into (or be bound by) a contract. The court disagreed, finding instead that Facebook’s terms and conditions – in particular, the Facebook’s Statement of Rights and Responsibilities (SRRs), which the plaintiffs had agreed to upon registering for the site and that gave Facebook the right to use their names and images for commercial purposes – were enforceable against the minors under California law.
BACKGROUNDThe plaintiffs filed a putative class action lawsuit against Facebook seeking damages for its alleged commercial misappropriation of the names and likenesses of minors who use Facebook. They sought declaratory relief and asserted two claims under an Illinois statute prohibiting the “use of an individual’s identity for commercial purposes” without prior written consent.
In response, Facebook insisted that it did nothing more than take information its users voluntarily had shared with their Facebook friends and republish it to those same friends, “sometimes alongside a related advertisement,” as part of its sponsored stories and social ad programs. Facebook argued that the complaint should be dismissed because the minors had provided consent by agreeing to SRRs, which governs the use of the Facebook site
and which contains a California choice of law provision.
The plaintiffs countered that the consent provisions in the SRRs are legally unenforceable as to minors because they represent a type of contract into which a minor cannot legally enter under California Family Code §6701 and, therefore, are void. Alternatively, the plaintiffs argued that
the SRRs are voidable under Family Code §6710.3, which provides minors with the ability to disaffirm certain contracts.
COURT’S DECISIONThe court said that the key question was whether Facebook’s SRRs are legally enforceable against minors, and it ruled that they are.
MAY 2014
Attorney Advertising1568
THE BOTTOM LINE
The court’s decision is significant as it found that minors had consented to, and were
bound by, Facebook’s SSRs. The California Attorney General and other regulators – as
well as the class representatives themselves – may seek to reverse this decision in
the name of protecting children. However, as minors are increasingly entering into
direct relationships with companies for goods and services, greater certainty over
what terms will govern that relationship would be welcome by many. Regardless, it is
important to note that the California ruling was based solely on a California law and
that the applicability of its reasoning in other states, and by other courts, remains to
be seen.
>> continues on next page
>> ALERT
MAY 2014
ADVERTISING, MARKETING & PROMOTIONS
In its decision, the court explained that under California law a minor has the power to enter into binding contracts except in limited circumstances, such as contracts for the “delegation of power” or contracts relating to personal property not in their immediate possession or control. The court then found that none of the specific exceptions under Section 6701 to a minor’s ability to enter into binding contracts applied to Facebook’s SRRs. The court reasoned that Facebook users “have, in effect, simply granted Facebook the right to use their names in pictures in certain specified situations, in exchange for whatever benefits they may realize from using the Facebook site.”
The court also rejected the plaintiffs’ reliance on a minor’s right to disaffirm a contract under Section 6710. Although the plaintiffs arguably could have disaffirmed the SRRs, the court noted that they never had expressed intent to do so and, in fact, that they had “continued to use their Facebook accounts long after [bringing suit].” Moreover, the court rejected the plaintiffs’ contention that minors might be able to disaffirm a contract without restoring any of the benefits they received, declaring that the plaintiffs could not explain how that principle “would somehow retroactively vitiate the consent they had given through the SRRs” at the time their names and profile pictures had been used. Accordingly, the court dismissed the complaint.
FOR MORE INFORMATION Allison Fitzpatrick Partner 212.468.4866 [email protected]
Vejay G. Lalla Partner 212.468.4975 [email protected]
Matthew E. Smith Associate 212.468.4804 [email protected]
or the D&G attorney with whom you have regular contact.
Davis & Gilbert LLPT: 212.468.48001740 Broadway, New York, NY 10019www.dglaw.com
© 2014 Davis & Gilbert LLP
