By Amanda Bronstad, From The National Law Journal

A California appeals court has reinstated a class action filed on behalf of thousands of child actors and other young performers alleging Bank of America Corp. illegally charged monthly fees on trust accounts that protect their earnings.

California’s Coogan Law, named for Jackie Coogan, a child actor in silent films who sued his mother and stepfather for spending all his money, requires that employers set aside 15 percent of a minor’s gross earnings for “artistic or creative services” until he or she turns 18 years old.

The lawsuit was filed by the parents of two children, Alex Gonzales and Jadon I. Monroe, who worked as extras. The complaint says that the class could total more than 5,000 individuals.

The ruling on Tuesday by the Second District Court of Appeal found that banks weren’t excluded from the law’s requirement that withdrawals from so-called Coogan accounts “by the beneficiary or any other individual, individuals, entity, or entities” must get court approval.

“The policy of the Coogan Law is to preserve a portion of the money the child actors earns,” said plaintiffs attorney Daria Carlson, a partner at Markun Zusman Freniere Compton, who brought the case in 2012 on behalf of the parents.

“Bank service fees take away child actors’ hard-earned money. The court of appeal held the bank service fees violated the law.”

Bank of America spokesman Bill Halldin and the bank’s attorney, James Martin, a partner at Reed Smith, declined to comment.

The ruling highlights the recurring problem in Hollywood of parents who spend money made by their children. Just this month, actress Mischa Barton, who starred in “The O.C.,” sued her mother for stealing money and kicking her out of a $7.8 million home paid for by her acting revenues.

In 2013, California’s legislature amended the Coogan Law to exclude extras and background performers, many of whom earn small paychecks that end up incurring bank charges because they fall below an account’s minimum balance. The earnings often end up in the hands of the Actors Fund of America, which has served as trustee of any unclaimed Coogan funds since 2003.

“There are lots of child actors who appear in commercials, and they get SAG minimum,” said Bruce Sires, a trusts and estates partner at Los Angeles-based Valensi Rose, referring to entertainment union SAG-AFTRA. A paycheck for that kind of work, he said, could result in only $40 being set aside—hardly enough for a trust account.

Los Angeles County Superior Court Judge John Shepard Wiley dismissed the class action in 2013 after concluding that service charges weren’t “withdrawals.” But the appellate panel reversed, finding that “when a bank debits an account, it necessarily withdraws money from that account.”

The panel also found, however, that the bank could get court approval or charge fees on the remaining 85 percent of a child actor’s earnings.

IMAGE: Charlie Chaplin, left, and Jackie Coogan, right, in the 1921 film The Kid. Coogan is the namesake of the Coogan Law in California, which requires that 15% of a child performer’s gross earnings goes into a specialized trust account. Credit: First National via Wikimedia Commons

For more on this story go to: http://www.nationallawjournal.com/id=1202725127886/Child-Actors-Class-Action-Reinstated-Against–BofA#ixzz3YtvhYn3Q