Law360 (November 24, 2021, 7:30 PM EST) — A lawsuit in California federal court has brought to the forefront the issue of whether minors can provide valid consent for companies to call or text their cellphones, opening a fresh potential avenue of liability for businesses that both knowingly and mistakenly interact with children.
Since the U.S. Supreme Court in April cut down the most popular theory for pressing claims under the Telephone Consumer Protection Act, the plaintiffs’ bar has been exploring other ways to keep the TCPA litigation machine churning and capitalize on the potential for uncapped statutory damages of between $500 and $1,500 per violation.
One such strategy is at the center of a putative class action brought in California late last month by a mother who claims her underage son received automated marketing text messages from the sketch comedy YouTube channel Smosh. While her son agreed to the texts in 2019, when he was 13, plaintiff Kristen Hall alleges that minors can never provide the prior express written consent required by the TCPA, an assertion courts have yet to hash out.
“This is yet another potential TCPA headache for callers to watch out for,” said Eric J. Troutman, a Squire Patton Boggs LLP partner who specializes in TCPA defense work.”While there is little case law on this issue, I’d expect to see a large number of ‘test’ cases being brought by TCPA plaintiffs in the next few months as this theory could be extremely profitable for the plaintiff’s bar if it holds water.”
Abbas Kazerounian, a founding partner at plaintiffs’ firm Kazerouni Law Group APC, told Law360 he thought the issue should be a “pretty simple” one for courts, because minors don’t have the legal capacity or authority under contract law to consent to deals like the one Hall’s son allegedly entered into with Smosh.
“It’s a pretty open and shut case,” Kazerounian said, adding that companies that specifically direct marketing campaigns to customers under 18 are the most likely to face these types of suits. “It’s common sense to not market to children, and if companies want to do that, there are different ways, such as marketing on TV and the radio, that won’t break the law.”
Michael Daly, a partner and TCPA defense attorney at Faegre Drinker Biddle & Reath LLP, disputed this stance, arguing it’s not a foregone conclusion that courts will back these claims.
“The plaintiffs’ bar suffered a decisive defeat this year when the Supreme Court confirmed that the TCPA’s autodialer restrictions apply only to devices that generate numbers randomly or sequentially,” Daly said, referring to the high court’s April ruling in Facebook v. Duguid that significantly narrowed liability for autodialed calls and texts under the TCPA. “So it should come as no surprise that they are digging deep for a tide-turning tactic. But this one should yield at most a Pyrrhic victory — and even that seems unlikely.”
Daly argued it’s “plainly wrong to suggest that minors cannot consent to receiving calls or texts,” because those under 18 “consent to all sorts of things — including things that are far more intrusive than a call or text.”
“The law has long recognized that they can consent to such things so long as they can appreciate the consequence of doing so,” Daly added. “For better or worse, minors who have their own cellphones are well aware of what it means to receive a call or text.”
The plaintiffs’ bar has countered that under contract law in most states, those under 18 can’t legally consent to a binding contract such as the one that’s allegedly formed when a consumer affirmatively agrees to receive automated or prerecorded marketing texts. But that argument “ignores that contracts with minors are voidable rather than void,” according to Daly.
“That doctrine acts as a shield, not a sword,” Daly said. “Filing suit over calls or texts that were received before a minor voided a contract would turn literally centuries of contract law on its head.”
Given that children are now spending more unsupervised time online and often have phone numbers they can give companies, courts’ acceptance of the argument that no one under 18 can provide consent for promotional texts and phone calls could trip up a wide range of businesses, defense attorneys say.
“This case will have huge implications, in terms of potential liability in the privacy class action area, given the number of minors who have cellphones,” Baker McKenziepartner Perrie M. Weiner said. “My recommendation for the time being is the ‘know your customer’ rule. Any company that wildly sends texts without knowing the age of the recipient or the age of a recipient providing ‘consent’ is playing Russian roulette with plaintiffs’ privacy lawyers.”
As demonstrated by the passage and enforcement of statutes such as the Children’s Online Privacy Protection Act and the California Consumer Privacy Act, children’s privacy rights are typically “highly protected by the courts,” making it prudent for companies to “when in doubt, obtain parental consent, particularly if the minor providing consent is under 16,” Weiner added.
However, these efforts may not be enough to avoid liability, because a phone number that was once provided to a company by an adult may have at some point been unknowingly reassigned or gifted to a minor, or users may lie about their ages on online consent forms, attorneys noted.
“Notably, the parents suing for these phone calls are the only ones who could really have prevented them, as there is no way a business would know — in most instances — whether the individual supplying a phone number on a webform is underage,” said Troutman, the Squire Patton partner.
For those businesses that know the age of the recipient before placing a call or text, as Smosh Dot Com Inc. is alleged to have done in Hall’s suit, they would be “wise to avoid visitors that report being under the age of majority in the given jurisdiction,” Troutman added.
Companies that don’t collect information about users’ ages or that call numbers they believe belong to an adult may also need to make some changes to their telemarketing procedures to avoid being pulled into these lawsuits, attorneys say.
“If this position gains traction, companies that communicate with their customers and prospects through outbound dialing may have to fundamentally change their policies for obtaining consent, and it could take outbound dialing completely off the table for companies that communicate primarily with individuals under the age of 18,” said Seth Corthell, an attorney at Jaszczuk PC. “Given these stakes, we expect that this issue will be hotly contested wherever it arises.”
According to Hall’s Oct. 28 complaint, when contacted by Hall’s counsel about the allegations, Smosh’s lawyers responded that the permission it had received from Hall’s son to send the disputed text messages promoting the sketch comedy group’s merchandise was legally valid under the TCPA, which requires companies to obtain prior express written consent for autodialed and prerecorded calls and texts to cellphones.
Smosh and other defendants are likely to seize on not only this contention, but also a host of other arguments, including that they had no knowledge they were contacting minors and that class certification can’t be supported due to differences in each class member’s experiences.
“For example, creating uncertainty about capacity of certain individuals to consent to receiving calls may hand defendants another individualized issue that could prevent certification for certain classes of TCPA claimants,” Corthell said.
The plaintiffs’ consent theory also introduces “new variables,” including contract and age of consent issues, that vary from “state to state and minor to minor” that are likely to make “the class certification calculus even more challenging for plaintiffs than it already is,” noted Daly, of Faegre Drinker.
Attorneys say both sides are likely to lean heavily on contract law and prior pronouncements from the Federal Communications Commission, which is in charge of issuing regulations interpreting the TCPA, in litigating these consent claims.
The FCC often cites contract authority to support its findings, which include its orders that describe consent as flowing from “the customary user or the account holder,” David Anthony and Brooke Conkle of Troutman Pepper said in a joint email. In the case of a minor using a cellphone, that definition could apply to either the child as the user or the parent as the account holder, they noted.
Contract law could also provide support to both sides, the attorneys added.
“Under contract principles, affirmative consent would require capacity, meaning that minors could not provide affirmative consent,” the Troutman Pepper attorneys said. “Following those same principles, however, minors could not revoke consent, a result that is in tension with the FCC’s directive that consumers can revoke consent by any reasonable method. This is further complicated by instances where an intermediary can provide affirmative consent, including in cases of incapacity.”
While most states set the age of consent for contract purposes at 18, questions likely to come up during the course of litigation are when exactly kids are able to give permission to receive targeted communications.
Courts may “adopt a state law-based approach in determining the ability of a minor to contract and the validity of that contract, including the potential for the minor to disaffirm prior to reaching the age of majority,” noted Alexandra Krasovec, a TCPA compliance and class action defense attorney with Manatt Phelps & Phillips LLP.
“On the other hand, given the prevalence of cellphone use by teens, we could see the court taking the middle ground and finding that some age — whether that is 13, 15 or 16 — is sufficient for a minor to provide valid consent,” Krasovec said, adding there have been “similar lines drawn in the privacy context,” such as with California’s privacy law and COPPA.
The federal children’s privacy law, COPPA, requires companies to obtain verifiable parental consent before gathering personal data from children under 13, while the California law, the CCPA, retains these protections while additionally prohibiting businesses from selling personal data belonging to children between 13 and 16 without their affirmative consent.
“Companies have long been aware of COPPA and other issues involving children’s privacy and communications with children,” said Becca Wahlquist, a partner at Kelley Drye & Warren LLP. “This suit is a warning that TCPA litigation also raises these issues.”
While attorneys couldn’t recall any instance where a court has directly tackled the consent issue posed by the Hall complaint, the Seventh Circuit appears to have come the closest in resolving an arbitration dispute involving a call to a minor’s phone.
In that case, A.D. v. Credit One Bank NA , the Seventh Circuit held in March 2018 that the minor leading a putative class action accusing the bank of placing unlawful debt collection calls wasn’t bound by the terms of her mother’s cardholder agreement with Credit One.
That pact mandated arbitration for all legal claims, including the underage daughter’s accusation that Credit One had unlawfully called her phone seeking payment on her mother’s overdue card payments, after the bank attached that number to the account when the mother used her daughter’s phone once in 2010 to access her account. But the appellate panel concluded that using a credit card once to pick up smoothies wasn’t enough to elevate the daughter to an authorized user under the agreement.
However, the Seventh Circuit case and similar TCPA disputes involving minors center on calls or texts that the underage users allegedly never consented to receive, which departs significantly from the allegations in Hall’s suit, Wahlquist noted.
“This suit raises a new challenge on the front of consent under the TCPA, which is not that minors didn’t agree to these communications, but that they can’t legally provide the prior express written consent that’s needed to send text messages to them,” Wahlquist said.
While time will tell whether these allegations will fizzle out or become the next litigation-fueling TCPA hook, attorneys say that as these disputes work their way through the courts, companies should be careful to ensure their automated marketing programs are set up to weed out communications to minors.
“I wish it weren’t so, but I do think a number of courts are going to consider this to be a viable theory,” said Troutman of Squire Patton. “Callers need to be extremely cautious of calling minors until the case law develops in this area.”
Counsel for Hall and Smosh Dot Com didn’t respond immediately to requests for comment.
Hall is represented by Joseph D. Steward III and Jacob U. Ginsburg of Kimmel & Silverman PC.
Counsel information for Smosh was not immediately available.
The case is Hall v. Smosh Dot Com Inc., case number 2:21-cv-01997, in the U.S. District Court for the Eastern District of California.
–Editing by Philip Shea and Nicole Bleier.