Monday, October 29, 2012 11:50 AM PT
Facebook Has to Answer
for Letting Minors Pay

     OAKLAND, Calif. (CN) - Two children can sue Facebook to vacate a contract that allegedly let the website rack up charges on their parents' credit cards, a federal judge ruled.
     Facebook had moved to dismiss the entire class action filed by I.B. and J.W. through their respective mothers, Glynis Bohannon and Julie Wright.
     Bohannon says she gave her son I.B. permission to use her credit card one time on Facebook to purchase "credits" for a game that he played on the social media site.
     Unaware that he was still spending real money, however, I.B. continued to make purchases in the game, and the charges appeared on his mother's credit card, according to the complaint.
     Julie Wright meanwhile says that J.W. bought more than $1,000 in credits, charged to the debit card she shares with her husband, though neither parent gave the boy permission to make any purchases.
     On Thursday, U.S. District Judge Claudia Wilken dismissed claims from the second amended complaint in which the parents sought to void their children's contracts.
     "Plaintiffs cite no authority that a parent has an independent right to disaffirm contracts entered into by their children, when not acting in a representative capacity on behalf of the minor," Wilken wrote.
     I.B. and J.W. may still seek that same declaratory relief under certain sections of the California Family Code that restrict minors from making a contract relating to any personal property of which the minor is not in immediate possession, and which allow minors to disaffirm contracts they have entered in to.
     Wilken also green-lit claims that Facebook engaged in unfair business practices by violating public policy protecting minors. Under this claim, the plaintiffs say that the social media giant actively advertised, marketed and promoted Facebook Credits with the statement that "all sales are final," when Facebook knew that minors making such purchases had the right to void those contracts.
     Certain claims require better explanation to proceed, the judge said, highlighting allegations that Facebook violated the Electronic Fund Transfer Act (EFTA) by debiting the bank accounts of plaintiff Julie Wright and other class members.
     "Plaintiffs cite the statutory definition of 'unauthorized electronic funds transfer' but do not identify a particular provision of the EFTA that has allegedly been violated," Wilken wrote. "Because the 2AC [Second Amended Complaint] fails to allege a violation of any specific provision of the EFTA, and amendment does not appear to be futile, the motion to dismiss the EFTA claim is granted with leave to amend."
     Wilken dismissed some of the claims under California's unfair competition and consumer laws, while allowing for others to be amended.
     The plaintiffs have until Nov. 15 to file a third amended complaint. If they choose to assert claims on behalf of a class, they have to amend their complaint to separate the minor plaintiffs' disaffirmance claim from the independent claims brought by their parents or guardians.