Virginia Business Litigation Lawyer Blog

Is Facebook violating New York privacy laws when it permits children to press the "like" button on the site to endorse advertisements without first receiving approval from their parents? That's the question posed by a lawsuit filed on May 3, 2011, in federal court in Brooklyn, N.Y., by the father of a teenager there who is a member of the hugely popular social networking site. The case was brought as a class action on behalf of "all minors in New York whose names or likenesses were used by Facebook, Inc., for commercial purposes without the consent of the parents or guardians of said minors." Anyone over the age of 12 can sign up for a Facebook account.

When any Facebook user, including a teenager, "likes" an advertisement, that preference appears on the Facebook page for that ad, the lawsuit says. This in turn is considered a "click" on that ad and generates revenue for Facebook, since it receives revenue from advertisers based on the number of users that "like" the advertisement. Facebook's privacy settings don't permit any users to prevent their names and pictures from appearing on advertising pages that they have "liked." They can at any time withdraw their "like," but as long as it is in effect, it will be considered a "click" and thus a "commercial use," according to the complaint.

In order to sign up for Facebook, users, including those under age, agree to the following statement: "You can use your privacy settings to limit how your name and profile picture may be associated with commercial, sponsored or related content (such as a brand you like) served or enhanced by us. You give us permission to use your name and profile picture in connection with that content, subject to the limits you place." According to the complaint, however, "at no time does Facebook seek or obtain the consent of any parent or guardian of its minor users to use or sell the name and likeness of the child for commercial use by Facebook or third-party advertisers."

Thus, according to the complaint, Facebook is using minors' names and likenesses for "commercial and marketing purposes" without the consent of their parents or legal guardians. This, according to the complaint, violates New York Civil Rights Law Sections 50 and 51, which provide civil and criminal penalties for using minors' names or likenesses without such consent.

Creative lawyering, for sure. Who could have predicted that a kid expressing his fondness for a product could give rise to a class action? A Facebook spokesman has been quoted as saying, "We believe this suit is completely without merit and we will fight it vigorously."

Lawyers representing Ryerson, Inc., a metal roofing company, were called upon recently to defend the company against the claims of two homeowners who alleged that Ryerson failed to honor the warranty on its roofing system and that such failure violated the Virginia Consumer Protection Act ("VCPA"). The lawyers argued that Ryerson could not be liable under the VCPA because all statements made in its warranty were statements of opinion rather than factual misrepresentations. The Eastern District of Virginia disagreed.

The VCPA was enacted to promote fair and ethical standards of dealings between suppliers and the consuming public. (See Va. Code § 59.1-197). It contains provisions that make it unlawful for a supplier to misrepresent that goods and services are of "a particular standard, quality, grade, style, or model," and prohibits suppliers from using "any other deception, fraud, false pretense, false promise, or misrepresentation in connection with a consumer transaction." (See Va. Code § 59.1-200(A)(6), (14)).

In Gottlieb v. Ryerson, the Gottliebs (according to the Complaint) hired a contractor to install a Ryerson steel roof on their gazebo and house. The roof came with a 20-year warranty, which assured the Gottliebs that the warranty was "low-risk, no-nonsense, [and] ironclad." The warranty materials also stated that Ryerson would honor the warranty "at any time and as often as needed within the 20-year period" from the installation date, and that the warranty entitled the homeowners to "complete repair or replacements of any covered problem--freight and labor included."

Approximately 10 years into the warranty, the Gottliebs claim the roof began to peel away and show signs of deterioration. They claim they placed several calls and sent several emails to Ryerson to discuss the roof issues, but say their attempts to communicate were largely ignored. A roofing contractor was hired to determine the cause, and he concluded that the finish coat had failed and that the roof needed to be replaced. Ryerson refused to replace the roof.

The court noted that "puffing" will usually not constitute fraud because "statements of this nature are generally regarded as mere expressions of opinion which cannot rightfully be relied upon" when the parties deal on equal terms. The court agreed with Ryerson that its statement that the warranty was "low-risk, no-nonsense, ironclad" was a mere statement of opinion and not actionable. On the other hand, however, the plaintiffs stated a plausible claim for relief under the VCPA because the statements that the warranty would be honored "at any time and as often as needed within the 20-year period" and that it would cover "complete repair or replacements of any covered problem" were unequivocal, specific, and factual.