Parents Object to $20M Facebook Sponsored Stories Settlement

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Parents of minors whose likenesses were used to tout company pages in Facebook’s controversial “sponsored stories” advertising campaign filed an objection this week to the proposed $20 million settlement arguing the terms of the settlement violate state laws that require parental permission to use minors’ likenesses and did not adequately compensate the Class Members.

Seven states do not allow the use of minors’ likenesses without parental consent: California, Florida, New York, Oklahoma, Tennessee, Virginia and Wisconsin. The parents argued in their opposition brief to the proposed Facebook class action settlement that the terms in the proposed settlement will authorize “clearly illegal conduct” that is expressly prohibited by state law.

They also argued that under the state laws, Facebook cannot rely on a child’s representation of consent stating: “Accepting a child’s representation of parental consent in place of parental consent is like letting a child sign his own permission slip to get out of school.” In addition, they said “If an advertiser may rely on a child’s representation of parental consent, the advertiser is effectively relying on the child’s own consent, which the statutes expressly forbid.” The parents argue parental controls, or “meaningful new controls,” provided in the settlement do not provide enough protection and still violate state laws.

The parents also object to the settlement because in future class action lawsuits, Facebook will argue that the settlement overrides state laws plaintiffs attempt to bring claims under. “The specter that this settlement could lead to a conflict between a federal court’s judgment and a state law’s clear command is one of the many reasons that a federal court should not approve a settlement that endorses a party’s violation of a state law,” the parents argued.

The objecting parents also counter Facebook’s First Amendment arguments that their use of minors’ likenesses is only a “republication” of the speech of minors that is protected by the First Amendment. “The rights of minor users to speak online, whether in written form or in the form of a ‘like’ that expresses an affinity, are irrelevant,” wrote the parents, “because Facebook is claiming protection for something different: its own ‘republication’ of that speech, plus the name and image of the speaker, in paid advertisements serving Facebook’s own commercial purposes.”

The objecting parents also pointed out that the U.S. Federal Trade Commission and California’s attorney general have challenged Facebook’s argument that the federal Children’s Online Privacy Protection Act preempts state law imposing parental consent on minors who are at least 13 years old.

The Facebook Sponsored Stories class action settlement, which was approved by U.S. District Judge Richard Seeborg   in 2013, provides for $15 to each Class Member affected out of the 150 million Class Members who filed claims, several million in “cy pres payments” to online privacy groups, along with $5 million to cover class counsel’s fees.

The objecting parents are represented by Scott Michelman and Scott L. Nelson of Public Citizen Litigation Group.

The Class is represented by Robert Arns, Jonathan Davis and Steven Weinmann of the Arns Law Firm and Jonathan Jaffe of Jonathan Jaffe Law.

The Facebook Sponsored Stories Class Action Lawsuit is Fraley et al. v. Facebook Inc., Case No. 13-16918, in the U.S. Court of Appeals for the Ninth Circuit.

UPDATE: On Jan. 6, 2016, the 9th U.S. Circuit Court of Appeals upheld the lower court’s approval of the Facebook Sponsored Stories class action settlement.

UPDATE 2: On Jan. 20, 2016, the father of an unnamed class action plaintiff asked the Ninth Circuit to revisit their devision to uphold the $20 million Facebook class action lawsuit settlement.

UPDATE 3: On Nov. 17, 2016, Top Class Actions readers who submitted timely and valid claims for the Facebook settlement started receiving checks worth as much as $15. Congratulations to everyone who got PAID!