Wednesday, May 1, 2013
Danielle Ayalon (J.D. Candidate 2013, University of California, Hastings College of the Law) recently published a student comment entitled, Minor Changes Altering Coogan Law To Better Protect Children Working In Entertainment, 35 Hastings Comm. & Ent. L.J. 353 (Winter 2013). Provided below is the introduction to her article:
It’s a story heard time and again. A child, once famous, now broke. Fame, money, and youth equal problems: Michael Jackson, Gary Coleman, Macaulay Culkin, Corey Haim, Shirley Temple. The list goes on and on: Children whose parents forgot that they are supposed to protect their children--emotionally and financially. When children earn substantial amounts of money, parents have something to gain. They frequently manage their children’s money, and with the desire for personal gain, they face an enormous temptation to disregard their fiduciary responsibilities. To protect children against these potential problems caused by their parents, the California legislature has adopted a statutory scheme known as Coogan Law.
Coogan Law is a popular name for sections 6750 through 6753 of the California Family Code. Before the enactment of Coogan Law, common law did not help ease the financial tension between parent and child because a minor’s earnings belong to his or her parents. Children were at the mercy of their parents, who often mismanaged the money earned by their children. As Marc Staenberg and Daniel Stuart point out, “instances of financial exploitation of child performers by their own parents cr[ied] out for legislative intervention.”
Coogan Law provides statutory authority designating income earned by a minor under an entertainment contract as the minor’s property, rather than the property of the minor’s parents. These statutes were first enacted in 1939, substantially revised in 2000, and subsequently amended in 2004. But despite these ongoing efforts to provide financial protection, the adverse interests of parents and their children persist. The concern that many child entertainers are not yet adequately protected invites close scrutiny of the law to assess whether changes are still required to assure children in the entertainment business have optimal protection.
This note examines the current Coogan Law and proposes changes to afford greater protection to children working under entertainment contracts. Part II of this note explains the history of Coogan Law from its inception to its most recent revision. Part III examines the current law and its loopholes: (1) the problems associated with court approval; (2) the inadequacy of the fifteen-percent requirement; (3) the inherent problems with parents as trustees; and (4) the statutory termination of the trust at the age of majority. Finally, part IV of this note proposes changes to the existing laws, aimed at curtailing each of the problems above and ultimately increasing the financial protection available to children working as performers in the entertainment industry.