A federal appeals court has ruled a judge can’t void Snapchat's user agreement simply because the user who signed it was a minor.
The U.S. Seventh Circuit Court of Appeals issued an opinion March 24 addressing a class action lawsuit with a minor lead plaintiff, identified only as K.F.C.
Seventh Circuit Judge Frank Easterbrook wrote the opinion; Judges Amy St. Eve and Thomas Kirsch concurred.
According to Easterbrook, Illinois resident K.F.C. was 11 when she opened an account on social media platforim Snapchat, even though the software’s enrollment terms require users must be at least 13. After using the service for a few years, K.F.C. sued Snap Inc., alleging Snapchat violated the Illinois Biometric Information Privacy Act by failing to obtain consent to use its facial recognition technology. The lawsuit also accuses Snap of failing to follow BIPA’s data disclosure and retention guidelines.
Snap argued K.F.C. ratified the user agreement through her continued use of the software and also said BIPA doesn’t apply to its service.
Although Snap is incorporated in Delaware and has its main office in California, K.F.C. lives in the Southern District of Illinois, where U.S. District Judge David Dugan dismissed her complaint in June 2021. Dugan ruled an arbitrator instead should resolve the argument of whether the user agreement’s arbitration clause applies to a minor, and whether she should be allowed to lead the BIPA class action. The outright dismissal allowed K.F.C. to appeal.
“K.F.C. acknowledges that she accepted these terms but denies that the arbitration clause (or any other part of the agreement) binds her,” Easterbrook wrote. “She concedes that she continued using Snapchat after turning 13 but maintains that this is irrelevant, because she was (and still is) under 18.”
According to the panel, K.F.C. argued arbitration is a matter of contract, and a judge has to determine if a contract exists before mandating a dispute can head to an arbitrator. The panel said that position is rooted in a 1986 U.S. Supreme Court opinion in AT&T Technologies v. Communications Workers, but explained the question on appeal hinges on K.F.C.’s premise a child can’t form a contract.
“State law governs the power to form a contract,” Easterbrook wrote.
He said the parties agree California and Illinois laws are materially identical on this subject.
“Illinois does not think that agreements between adults and children are void — that they must be ignored, no matter what. Illinois treats such agreements as voidable, which means that children may elect how to proceed once they come of age," Easterbrook wrote.
Because Illinois law allows a child to accept an agreement and claim its benefits, the panel continued, such a child also is bound by any of the deal’s detriments. And since a voidable agreement is not automatically applied, Illinois law allows age to be a potential defense against enforcing the agreement. But while the question of whether a contract exists rests with a judge, an arbitrator must decide whether the contract is valid.
The panel said it found only one relevant federal appellate decision, a 2021 U.S. Sixth Circuit Court of Appeals opinion in I.C. v. StockX, which “is all but identical.” That majority said Michigan law stipulates youth is a defense of contract enforcement, but not an impediment to forming a contact.
Although on appeal K.F.C. cited her age when she accepted the user agreement as a reason the agreement is invalid, the panel said she only presented that argument in passing before Judge Dugan, therefore forfeiting the right to use it on appeal.
Plaintiffs are represented in the action by attorneys Mark R. Sigmon, Matthew E. Lee, Erin J. Ruben and Caroline R. Taylor, of the firm of Milberg Coleman Bryson Phillips Grossman, of Raleigh, North Carolina; and Gregory F. Coleman, of Knoxville, Tennessee.
Snap is represented by attorneys Elizabeth B. Herrington and James D. Nelson, of Morgan Lewis & Bockius, of Chicago and Washington, D.C.