Children As Chattels

The Disturbing Plight of Child Performers
by . and .

About the authors

Marc R. Staenberg practices entertainment and business/transactional law in Century City. He is a member of the Board of Governors of the Beverly Hills Bar Association and served for four years as Chairman of the BHBA Entertainment Law Section. Staenberg is a graduate of the University of Wisconsin (B.A. 1969), Rutgers Law School-Newark (J.D. 1973) and Georgetown University Law Center (L.L.M. 1977).

Daniel K. Stuart practices labor and entertainment law with the Law Offices of Marc R. Staenberg, A Professional Corporation. He received his J.D. at Loyola Law School where he earned the American Jurisprudence Bancroft-Whitney Award for Trial Advocacy. Prior to practicing law, Stuart was an award-winning print and broadcast journalist. His articles have appeared in Billboard and other magazines, and he has written and created several syndicated radio programs.

Introduction

;Macauly Culkin. River Phoenix. Gary Coleman. Todd Bridges. Danny Bonaduce. Rusty Hamer. Shirley Temple. Jackie Coogan. It seems that every era produces a consistent stream of child performers who wind up dead, addicted, depressed, in financial distress or in trouble with the law. How many of these vulnerable performers must suffer before Hollywood and lawmakers unite to take action to protect them?

The deaths of teenage film star River Phoenix (drug overdose) and former child actor Rusty Hamer of "The Danny Thomas Show" (suicide) are extreme examples of the adverse effect early stardom can have on young people who are not adequately counseled and protected under current laws and industry policies. The arrests of Danny Bonaduce of "The Partridge Family" (assault), Todd Bridges of "Diff'rent Strokes" (attempted murder at a crackhouse) and his co-star Dana Plato (robbery), provide more evidence of a disturbing pattern of severe coping difficulties among child performers.

Theories abound about why so many child performers seem to have such difficulty adjusting to life as adults. Stan Ziegler, a Los Angeles psychologist specializing in child performers, offered that "instead of a natural childhood of acne and budding breasts, they are pampered, protected and catered to. Suddenly, that world ends and they are forced to make this adjustment to the real world. Most can't."

The problems of child performers are not limited to coping with transition to an adulthood out of the public eye. Some suffer greatly during their childhood pursuit of fame and success. The murder of six-year-old beauty queen Jon-Benet Ramsey focused new attention on the exploitation of child performers and the sometimes obsessive drive of the "stage parent". Former child star Paul Petersen, now a leading activist for child performers, knows of "parents who underwrite oral surgery to correct teeth in eight, nine, 10-year-old children [and] breast augmentation in 14-year-old girls so that they can compete with 18-year-old actresses." Sports psychologist Jennifer Mann noted that child performers coping with pushy parents can suffer several long-term effects including "depression, anxiety [and] eating disorders" and, occasionally, suicide.

The psychological distress suffered by so many child performers should be of significant concern to both the entertainment industry and to lawmakers. While the issues are difficult and complex, with a bit of ingenuity these two power bases could and should work together to develop laws and systems to provide legal protection and require psychological and career transition counseling to child performers.

Those young actors, singers and models who manage to survive the transition to adulthood without losing themselves in drugs, criminal activity, depression or despair often find themselves on the losing end of a different battle: the fight to retain the fruits of their own labor. According to Petersen, Shirley Temple supported a household of twelve, including her parents, throughout her film career. When that career wound to a close, her only assets were a few thousand dollars and the deed to her dollhouse in the back yard of her parents' Beverly Hills home.

Like Temple, child actor Macauly Culkin (star of high-grossing films "Home Alone" and "Home Alone 2") was the primary source of financial support for his family until the New York courts wrested control of his earnings from his parents. For years, Culkin's unmarried parents' only source of income had been "management fees" generated by their children's acting careers. Since June 1995, however, much of his parents' energies and income have been spent on a bitter and expensive battle for custody of Culkin and his five minor siblings. In March 1997, Manhattan Supreme Court Justice David Saxe transferred control of Culkin's finances from his parents to his longtime accountant. Saxe noted that the custody battle had caused the family's financial situation to deteriorate so much that "there is a real possibility of this millionaire and his family being evicted and left without any home."

Other examples of the parental squandering of a child actor's earnings abound. Lee Aaker ("Rin Tin Tin") abound. Lee Aaker ("Rin Tin Tin") earned hundreds-of-thousands of dollars during his career. When he stopped acting, there was only $20,000 remaining, and his mother "doesn't know" what happened to the remainder. Beverly Washburn ("Old Yeller") was worth only $250 when she became an adult. When her mother sold the house she had purchased with Beverly's earnings, she gave Beverly fifty dollars to buy some new clothes.

In one of the more famous recent cases of child actor exploitation, Gary Coleman ("Diff'rent Strokes") had to sue his own parents to recoup millions of dollars of earnings. Coleman's parents had money set aside under California's "Coogan Law" (discussed infra) to create a pension fund, ostensibly to protect Coleman's interests in the income he generated. However, Coleman's parents structured the arrangement to name themselves as paid employees of Coleman's production company. When the court finally dissolved the pension fund, the parents' share was worth $770,000, while Coleman himself had only $220,000. According to Newsday, Coleman successfully sued his parents and managers for $3.8 million.

These instances of financial exploitation of child performers by their own parents cry out for legislative intervention. The current legal framework is woefully inadequate to prevent the unscrupulous or negligent parent from squandering their child's earnings.

Hollywood and the public have long recognized the special risks child performers are exposed to, but the California legislature has not meaningfully amended the laws to protect children from these risks since 1939. That year, in response to the news that the mother of child star Jackie Coogan had spent all of his movie earnings, the legislature enacted the "Coogan Law" (discussed infra). This law was designed to give child actors a modest measure of protection, but the entertainment industry has changed so much since 1939 that the "Coogan Law" has been rendered virtually impotent. So much about the industry has changed that in 1985, one U.S. District Court Judge described the "Coogan Law" as one that exists "for the protection of the employer." If there is any truth to this point of view, then who or what protects the child employee?

History of California's Coogan Law

Children are so much more vulnerable to exploitation than adults that, in order to protect them from being exploited, the common law allowed all minors the right to disaffirm or void contracts at will. The public policy reason behind this common law principle was "to protect minors against their own improvidence."

Today's "Coogan Law" is an outgrowth of the original version of Civil Code sections 35 and 36 that the legislature passed in 1872 to protect employers from the common law and statutory rights of minors to disaffirm contracts. Section 35 codified minors' common law right to disaffirm contracts. Section 36 carved out a huge exception to the common law rule.

Section 36 proscribed minors from disaffirming otherwise valid contracts that provided income the minors would use to pay for things necessary for the support of themselves or their families, but only when those contracts were "entered into by him when not under the care of a parent or guardian able to provide for him." (emphasis added) There was nothing in this statute that sought to offer minors any protection from exploitation. To the contrary, this statute stripped away the very powerful rights of minors to disaffirm contracts.

On the other hand, during this pre-welfare era, the plight of children who did not have the benefit of a responsible adult provider made the original version of Section 36 a virtual necessity. Without this statute, children in this unlucky circumstance would have likely faced great difficulty in obtaining goods and services necessary to survive, as merchants and landlords would be wary of entering into contracts that could be easily disaffirmed. In this narrow circumstance, the best interests of the minor may well have been served by this statute that eliminated the minor's right to disaffirm contracts. Indeed, the California Supreme Court held that the "law implies an obligation on the part of an infant to pay for necessaries furnished to him and his family on his own credit [because] . . . the law recognizes that minors must have their needs provided for."

This 1872 statute clearly did not contemplate that some children could earn significant sums of money as performers. Therefore, as the movie industry produced child actors, a legislative void was created. By 1927, the movie industry typically operated under the "studio system," in which studios signed actors to exclusive contracts with options that could extend the contract for several years. Child actors were an important part of the movie industry, but were allowed by law to disaffirm contracts that provided for more than just their basic care and support. Studios were understandably reluctant to sign minors to lucrative contracts and invest time and dollars into developing their careers while there was a significant risk that they could disaffirm the contract at the peak of their popularity and jump to a competitor.

To avoid the minors' ability to disaffirm contracts, film makers often contracted with the minors' parents, but this caused several problems: How could the film makers compel a stubborn child to conform? How could the film makers protect themselves from the rule that such contracts would expire when the child reached the age of majority (which then was 21)?

The legislature resolved the studios' concerns by adding a second paragraph to Section 36 that specifically removed the minor's common law rights to disaffirm contracts "otherwise valid to perform or render services as actor, actress, or other such dramatic service where such contract has been approved by the superior court of the county where such minor resides or is employed." This revision offered some measure of protection for child performers by requiring court approval before exempting an entertainment contract from the minor's right to disaffirm.

The 1927 revision fell far short of securing reasonable protection for the child performer because of its absence of specific instructions to the judiciary. The law allowed but did not require judges to approve these contracts, and set no criteria for determining whether or not a contract with a child should be approved. There was no requirement that the contract adequately protect the child's interests such as establishing a trust fund to protect the child's earnings. Many judges apparently provided rubber stamp approval on many of these contracts, as the judicial reaction to the Coogan scandal would soon prove.

The new clause arguably resulted in expanding opportunities for child performers, as producers were now more willing to recruit, sign and develop these young talents. However, such a benefit to child performers is purely speculative. We can never know how Hollywood would have adapted itself to its dilemma if the legislature had not been so accommodating in 1927.

The gaping holes in the 1927 law were publicly exposed in 1938 when the movie industry was rocked by the news that beloved child star Jackie Coogan was flat broke. Apparently, Coogan's mother had spent nearly all of his earnings. This public scandal exposed the inadequacies of the then-current law. In an extraordinary indictment of the fallibility of the law, at least one Superior Court judge announced that he would exercise the discretion granted to him under Section 36 by refusing to approve any entertainment contracts with minors unless the contract "contained provisions whereby substantial portions of the child's earnings would be set aside, in trust, for the benefit of the child." One can only wonder why the judges failed to exercise such discretion from 1927 through 1938.

In response to the Coogan scandal, the California Legislature added Sections 36.1 and 36.2 to the Civil Code the following year, and the "Coogan Law" was born. Section 36.1 specifically granted the court the power (but, again, not the obligation) to:

require the setting aside and preservation for the benefit of the minor, either in a trust fund or in such other savings plan as the court shall approve, of such portion of the net earnings of the minor, not exceeding one-half thereof, as the court may deem just and proper . . .

Section 36.2 provided the court with continuing jurisdiction over funds set aside under 36.1 and gave the court "power at any time upon good cause shown, to order that any such trust or other savings plan shall be amended or terminated." Sections 36.1 and 36.2 have since been restated without substantive change as Family Code sections 6752 and 6753, respectively.

The Coogan law did provide some limited measure of relief to child stars under the old "studio system," where long-term contracts were then the industry norm. Judges had vast discretion to determine whether a trust fund should be established and to define the terms of those arrangements. They could never set aside more than half the child's earnings, no matter how generous his income. A child actor's financial future was not guaranteed by the law, but was placed at the mercy of both the judge that reviewed his contract, and his parents who controlled whatever moneys were not set aside.

The limited body of case law on the subject suggests that the Coogan law provided far more protection to film makers than to child actors. The California Supreme Court reviewed the Coogan law in two cases in 1948: Warner Bros. Pictures v. Brodel (1948), 31 Cal.2d 755, and Loew's Inc. v. Elmes (1948) 31 Cal.2d 782.

In Brodel, Warner Bros. Pictures entered into an agreement with Joan Brodel, a seventeen year old actress. The initial duration of the contract was for one year, but provided Warner Bros. with options to extend the agreement, one year at a time, to a maximum of seven years. The contract was submitted to and approved by the court. (During this era, the age of majority was 21.)

Brodel's contract, although entered into during minority, bound her to Warner Bros. until she was twenty-four years old. After her twenty-first birthday, she sought to disaffirm the contract. The California Supreme Court reversed a lower court ruling in Brodel's favor and held that actors who sign contracts under Section 36 may be bound into their adulthood, so long as the contract does not exceed the seven-year limitation set forth in Labor Code Section 2855.

The Court's reasoning is noteworthy in that it displays the Court's sympathy for the film maker's business interests. The Court reasoned that studios need this protection because "frequently the employer is contracting with persons of no tested ability . . . who may prove to have no appeal to the public. . . . Without such an expedient, few employers would risk the costly sponsorship of such talent." The Court suggested that their ruling would help child actors by reasoning that "[i]f the court were precluded from approving contracts with such option clauses . . . the employers deprived of the protection of such [option] clauses would unquestionably offer contracts less favorable to the minors."

By accepting this wholly speculative rationale, the court drifted even further away from the common law principle that minors should retain the right to disaffirm contracts to "protect [them] against their own improvidence." The original 1872 exception to this rule was narrowly tailored to permit children to make contracts only to provide for their own necessities and those of their families. The 1927 rule expanded the exception to apply to child performers in general. In 1948, the California Supreme Court's ruling enlarged that exception to allow twenty-four-year-old adults to remain bound to agreements they entered into while still a child.

On the same day it decided Brodel, the Court reversed an order by a Superior Court Judge facing a similar fact pattern. In Loew's Inc. v. Elmes a film maker contracted with a fourteen-year-old actor for an initial term of one year, but with options for up to six consecutive one-year extensions. When the parties submitted the agreement to the Superior Court for approval, the judge approved the initial one year term, but withheld approval of the options. The California Supreme Court reasoned that the judge must have concluded that he did not have the right to approve these "options" which are legally distinct from an agreement to work. Because the Court had held in Brodel that courts may approve contracts with these options, it reversed the order and approved the entire contract, options and all. Apparently the California Supreme Court failed to adequately consider that it might not be in the best interests of a fourteen-year-old child to bind himself to a performance contract that he would have to endure for up to seven years.

The Coogan Law, as written, is greatly flawed. Too much unfettered discretion remains in the hands of the judges. Even more importantly in today's entertainment industry, the law fails to protect child actor's earnings that are the result of short-term contracts. Many child actors earn tremendous sums of money acting in commercials or films without ever entering into a contract that extends beyond that single project. Their employers have no incentive to seek court approval of these contracts because, due to their short-term nature, there is very little risk of disaffirmance.

The Coogan Law has not been meaningfully updated since its enactment nearly six decades ago. The law had serious shortcomings then, and whatever limited effectiveness it may have had under the old studio contract system has been rendered virtually obsolete by today's industry practices. The law only protects children with long-term contracts, so it provides some protection for the small number of child actors cast as "regulars" on television shows, but does nothing for the overwhelming majority of child television actors who work under short-term agreements to appear in commercials or single television or film projects.

Another major flaw in the current law is that when a child actor's parent(s) wish to control all of their child's earnings, they may do so by avoiding the court contract approval process. If neither the producer nor the parent seeks court approval of a contract, there is no advocate to protect the child's interests by insisting the contract be reviewed by the courts. If their contracts are not even presented to the court for review and approval, the child performers are denied any of the slim protections afforded them by the Coogan Law, leaving them vulnerable to financial exploitation by their employers, managers, and their own parents.

Whose Money is it Anyway?

Child performers need new and enhanced protections not just from their employers and their parents, but from the law itself. Many laypersons are surprised to learn that under California law, the earnings of minor children legally belongs to their parents. There is an odd conflict in California Law that appears to be a relic of a bygone era. On the one hand, parents have an absolute statutory obligation to unconditionally provide for the maintenance and education of their children. On the other hand, current statutes reflect an ancient belief system that grants parents control over their children's earnings as "compensation" for providing them with support.

The United States absorbed the common law prerogative of the father to own the earnings of his children as part of the traditional law of England. Today, California Family Code Section 7500, states that parents are absolutely entitled to their childrens' earnings:

§ 7500. Services and earnings of child

(a) The mother of an unemancipated minor child, and the father, if presumed to be the father under Section 7611, are equally entitled to the services and earnings of the child.

(b) If one parent is dead, is unable or refuses to take custody, or has abandoned the child, the other parent is entitled to the services and earnings of the child.

California Family Code Section 771 further states that the "earnings and accumulations of a spouse and the minor children living with, or in the custody of, the spouse, while living separate and apart from the other spouse, are the separate property of the spouse."

These laws place children in a condition of virtual economic slavery and are outgrowths of an earlier era that never contemplated the possibility that a child's earnings may be as substantial as that of today's child performers. Historically, the rule entitling parents to the fruits of their children's labor is rooted in the parents' reciprocal obligation to support their children. In a 1921 case, Wardrobe v. Miller, the California Appellate court offered this explanation:

The right to a child's services and earnings is reciprocal to the [parents'] duty to support . . . . [But] it can be of little consequence, because the child's labor and services are for that period of little value . . . . [The father's right to his children's] services, like his right to their custody, rests upon the parental duty of maintenance, and it is said [that the right to his child's earnings is] to furnish some compensation to him for his own services rendered to the child. (emphasis added)

A great deal has changed since 1921. The notion that parents should own and control the token earnings of their children might have been appropriate at the turn of the century when a child's earnings would be of "little value". Such a notion hardly seems applicable today when a child is capable of earning very significant sums of money. The logic of Wardrobe does not apply to circumstances where a child generates earnings of significant value. The spirit of Sections 7500 and 771 is inconsistent with that of a significant body of law that defines parental obligations.

The Family Code contains several statutes that address the obligations of parents to provide for their children. None of these statutes contain language that suggests that this parental duty is in any way mitigated by the child's ability to earn income. Section 3900 states that the "father and mother of a minor child have an equal responsibility to support their child in a manner suitable to the child's circumstances." Section 3901 defines the duration of that duty to support as extending until the unmarried child "completes the 12th grade or attains the age of 19 years, whichever comes first." For the purposes of Section 3901, "support" includes maintenance and education.

So serious is the parental duty to support minor children that, under Section 4000, "[i]f a parent has the duty to provide for the support of the parent's child and wilfully fails to so provide, the other parent, or the child by a guardian ad litem, may bring an action against the parent to enforce the duty."

When do children have a legal obligation to support their parents? Under Section 4400, that duty is imposed only on "adult children" to provide support "to the extent of his or her ability," and then only when they have "a parent who is in need and unable to maintain himself or herself by work."

Clearly, Section 4400 conflicts directly with the notion that an able-bodied parent of a child actor should have the absolute right to his child's earnings. If the funds earned by a child are used to pay for his own support, then the parents are in derogation of their statutory duty to support their child. If the funds earned by a child are used for the parent's economic benefit, then the parents are imposing a false duty on the child that conflicts with Section 4400. If the legislature intended to impose a duty on minor children of independent means to support their able-bodied parents, that intent should have been expressed in Section 4400.

The legislature must address this conflict in the letter and the spirit of these sections of the California Family Law Code. The laws should make it clear that parents have an absolute and unconditional obligation to provide support for their children, regardless of how much money their children earn, and that all moneys earned by minors belong to the minors. Indeed, a recently enacted statute in Florida provides that, when a minor is a party to an entertainment performance contract that is submitted to the court for approval, "all earnings, royalties, or other compensation earned or received by the minor pursuant to said approved contract shall become the property of the minor."

Other State's Laws Regarding Child Performers

There is a compelling need for standardization of child actor laws throughout the United States. The current mix of statutes applying to child performers is complex, inconsistent and invites such unwelcome activities as forum shopping, excessive travel, and family relocation as parents and studios vie for access to laws that suit their own financial interests.

Virtually all states have statutes designed to protect child laborers from exploitation. Incredibly, a majority of states have granted specific statutory exemptions to the entertainment industry so that child labor laws do not apply to them. Some of these states require permits or administrative authorization in order for the exemption to be exercised. However, in many states, the exemption is unconditional!

Many of these exemption statutes are clearly outdated and obsolete, such as Rhode Island's State Statute 28-3-8, originally enacted in 1943, which refers to many modes of entertainment that are rarely, if ever, seen today:

. . . [certain] provisions [of the Labor Code that govern child labor] shall not apply to the employment of children in the vocation, occupation, or service of rope or wire walking, or as gymnasts, wrestlers, contortionists, equestrian performers, or acrobats, riders upon bicycles, or mechanical contrivances, or in any dancing, theatrical or musical exhibition . . .

Only a handful of states, including Florida, California, New York and Missouri, have attempted to address these issue in comprehensive independent statutes. At the other end of the spectrum, a few states still have old laws on the books which apparently would ban child employment as entertainers altogether, unless their work falls within some stringent and wholesome exceptions. For example, § 104 of Maryland's Labor and Industries Code prohibits children under fifteen from appearing in a "theater, circus or any other public exhibition as a singer, dancer, acrobat, actor or in any other entertainment capacity" except for their "participation in a church, chapel, school or social exhibition" or a licensed "festival, concert or other non-commercial exhibition."

The disparate range and content of statutes affecting child performers begs for legislative intervention. In some states, talented child performers are apparently not permitted to ply their craft, while in most others, they are vulnerable to exploitation due to the lack of effective statutes. Many of these statutes date back well into the first half of this century and have not been redrawn to reflect the realities of the modern entertainment industry.

Conclusion

Every state has a compelling interest in the care and welfare of its children, even when the children are pampered stars who, at the peak of their careers, earn tremendous sums of money. These interests would be best served by the development of a Model Code which recognizes the exigencies of the modern entertainment industry and provides adequate protections, financial and otherwise, to all involved parties -- child performers, their parents and employers. Such a Model Code could then be adapted and adopted by each state so that child performers would receive similar protections throughout the nation.

The areas that need to be addressed in such a Model Code include the following: educational requirements, psychological and emotional counseling, appropriate working conditions and safety, financial management and control, compensation for parents and income tax reform. Many of these issues can be immediately addressed by other entities such as entertainment labor unions and industry organizations.

By thoughtfully balancing the interests of entertainment employers, child performers, and their parents, these parties could shape laws and policies to protect the interests of everyone involved. Ideally, under such laws and policies, child performers could enjoy the fruits of their own labor, but would be compelled to maintain their commitment to education to prepare themselves for a life after show business. Their parents would be compensated for their time and effort, but could not be unjustly enriched at their child's expense by squandering their child's earnings. Employers could easily incorporate any added expenses of this system into the cost-benefit analysis of new contracts, so their bottom line would not be affected, and they would gain the added benefit of knowing that their employees' interests are being adequately protected.

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