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California Invasion of Privacy Act Prohibits Recording Cellphone Communications Without Consent

The California Supreme Court recently held that Section 637.2 of the California Invasion of Privacy Act, Pen. Code, § 630, et seq. (“CIPA”) prohibits parties as well as nonparties from intentionally recording a communication transmitted between a cellular or cordless phone and another device without the consent of all parties to the communication. The California Supreme Court reversed a contrary interpretation by the California Court of Appeal, Fourth District, that Section 632.7 applies only to nonparties and does not forbid a party to a phone call from recording the conversation without the consent of the other party or parties. In so ruling, the California Supreme Court held that a party to a conversation involving a cellular or cordless telephone violates Section 632.7 when that party records the conversation, without the other party’s consent.


A copy of the California Supreme Court’s opinion in Smith v. LoanMe, Inc. may be found here.


In Smith, a lender called a borrower to discuss an outstanding loan. The borrower’s husband, the class action plaintiff, took the call on a cordless telephone. Three seconds into the call the lender caused a beep to sound. The lender did not orally advise the class action plaintiff that the call was being recorded. The class action plaintiff did not sign a contract granting the lender consent to record calls.


After a bifurcated trial, the trial court concluded that the beep tone provided sufficient notice under section 632.7 that the call was being recorded and that the class action plaintiff implicitly consented to being recorded by remaining on the call.


As you may recall, the CIPA criminalizes (with certain exceptions) anyone who:


· Intentionally and without the consent of all parties to a confidential communication, uses an electronic amplifying or recording device to eavesdrop upon or record the confidential communication, whether the communication is carried on among the parties in the presence of one another or by means of a telegraph, telephone, or other device, except a radio … (Pen. Code, § 632(a), emphasis added.)

· Maliciously and without the consent of all parties to the communication, intercepts, receives, or assists in intercepting or receiving a communication transmitted between cellular radio telephones or …, between any cellular radio telephone and a landline telephone … (Pen. Code, § 632.5, emphasis added.)

· Maliciously and without the consent of all parties to the communication, intercepts, receives, or assists in intercepting or receiving a communication transmitted between cordless telephones …, between any cordless telephone and a landline telephone, or between a cordless telephone and a cellular telephone … (Pen. Code, § 632.6, emphasis added.)

· Without the consent of all parties to a communication, intercepts or receives and intentionally records, or assists in the interception or reception and intentional recordation of, a communication transmitted between two cellular radio telephones, a cellular radio telephone and a landline telephone, two cordless telephones, a cordless telephone and a landline telephone, or a cordless telephone and a cellular radio telephone … (Pen. Code, § 632.7, emphasis added.)


Any person injured by a violation of the CIPA may bring an action against the person who committed the violation for five thousand dollars ($5,000) per violation or three times the amount of actual damages (whichever is greater).


On appeal, the Court of Appeal affirmed the trial court, but did not address whether the plaintiff implicitly consented to the recording. Instead, the Court of Appeal held that Section 632.7 applies only to nonparties and does not forbid a party to a phone call from recording the conversation without the consent of the other party or parties. The Court of Appeal reasoned that Section 632.7’s condition “without the consent of all parties to the communication” modified “intercepts or receives.” As a result, the Court of Appeal determined that a party to a conversation who receives a communication with the consent of the communicator and then records that communication without the communicator’s consent does not violate Section 632.7 because the statute cannot be violated if the communication was received with all parties’ consent. The Court of Appeal’s analysis is more fully described here.


The California Supreme Court reversed the Court of Appeal’s ruling and held that Section 632.7 applies to parties as well as nonparties. The California Supreme Court read Section 632.7’s consent language as directed at the recording component of the offense, with the section’s “intercepts or receives” phrasing as specifying the circumstances in which a person may become privy to a covered communication. As a result, a party would not necessarily convey their consent to being recorded, simply because they consented to the other party’s receipt of their communication.


In reaching its decision, the California Supreme Court first observed that the Court of Appeal’s interpretation departed from the majority view of federal district courts which had concluded that the text of Section 632.7 unambiguously prohibits a party from recording a protected communication without the consent of all other parties. (See Ades v. Omni Hotels Management Corp. (C.D. Cal. 2014) 46 F.Supp.3d 999, 1017-1018; Ronquillo-Griffin v. Telus Communs., Inc. (S.D. Cal. June 27, 2017) 2017 WL 2779329, at pp. *3-*4; Horowitz v. GC Services Ltd. Partnership (S.D. Cal. Apr. 28, 2015) 2015 WL 1959377, at p. *11; Montantes v. Inventure Foods (C.D. Cal. July 2, 2014) 2014 WL 3305578, at p. *3; Simpson v. Best Western Intern., Inc. (N.D. Cal. Nov. 9, 2012) 2012 WL 5499928, at p. *8; Brown v. Defender Sec. Co. (C.D. Cal. Oct. 22, 2012) 2012 WL 5308964, at pp. *4-*5.)


The California Supreme Court also noted its prior determination that under the CIPA “a conversation is confidential if a party to that conversation has an objectively reasonable expectation that the conversation is not being overheard or recorded.” (See Flanagan v. Flanagan (2002) 27 Cal.4th 766, 768.) Thus, in CIPA’s legislative scheme, Section 632(a) protects against interception or recording of any communication in which a party reasonably expected it was not being overheard or recorded. However, the Legislature determined that there was no practical means of protecting cordless and cellular conversations from accidental eavesdropping. Therefore, in order to protect these communications that might not be “confidential,” the Legislature chose to protect all such conversations from malicious or intentional eavesdropping or recording.


The California Supreme Court rejected the Court of Appeal’s position that Section 632.7 should be similarly construed as limited to nonparties because Sections 632.5 and 632.6 do not have parties in mind. The California Supreme Court explained that the additional language regarding recordation within Section 632.7 and Section 632.7’s lack of a malice requirement function to describe a class of potential perpetrators that includes parties, even if Sections 632.5 and 632.6 do not.


The California Supreme Court observed that its reading of Section 632.7 aligns with the Legislature’s purpose in enacting Section 632.7 – i.e., to plug a hole in the statutory scheme that left communications involving cordless and cellular telephones unprotected from recording. Likewise, the California Supreme Court determined that its reading of Section 632.7 better promoted the Legislature’s stated intent to protect privacy rights in response to new devices and techniques used for eavesdropping upon private communications. (Pen. Code, § 630.)


Finally, the California Supreme Court rejected the Court of Appeal’s concern that it would be absurd if the recorder’s liability hinged on whether a party answered using a cellular phone, as opposed to a landline phone. The California Supreme Court explained that this difference stems from the Legislature’s apparent sense, decades ago, that cellular and cordless communications are incapable of being cast as confidential.


The California Supreme Court remanded the case to the Court of Appeal to determine whether the lender’s activation of a beep tone gave the plaintiff notice that the conversation was being recorded, which the Court of Appeal had not addressed in its prior opinion.


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