Court of Appeal:
One-Sided Phone Recordings Proscribed by Privacy Act
Entitlement to Private Calls Applies Even When Other Person’s Voice Is Not Recorded, Opinion Says
By Sandra Hong Staff Writer
The right to keep phone conversations private applies even when only one side of the conversation is being recorded, the First District Court of Appeal has held, reversing a judgment for the consumer reviews website Yelp in a lawsuit alleging it secretly recorded sales calls in violation of the state’s privacy act.
The opinion by Justice Teri L. Jackson of Div. Three, filed Wednesday, reverses an April 27, 2018 summary judgment by San Francisco Superior Court Judge Mary E. Wiss. Wiss found that the protections under the California Invasion of Privacy Act (“CIPA”), contained in Penal Code §630 et seq., apply only to entire phone conversations recorded between two or more persons, and not where just one voice is recorded.
Wiss also found Yelp’s phone system, using voice over internet protocol (VoIP) technology, is not subject to CIPA.
On appeal, the plaintiff, Sacramento attorney Eric Gruber, argued Yelp violated Penal Code §§632 and 632.7 of CIPA even if it only recorded the voices of its sales representatives, soliciting advertising by him, in the more than a dozen conversations he had with them in which he divulged confidential and financial information about his solo personal injury law practice. He alleges that he believed the phone conversations were private and not being recorded.
Gruber contended Yelp’s recordings, regardless of whether his voice was captured or not, reflected his private communications through the statements made by Yelp’s sales representatives and were protected by CIPA.
“We agree with this reasoning,” Jackson said in her opinion, joined by Presiding Justice Peter J. Siggins and Justice Carin T. Fujisaki.
Jackson said the statutory language and previous court decisions support a finding that CIPA protections apply to one-sided recordings and require consent by all parties. She wrote:
“In setting forth this consent requirement, these statutes make no distinction between all or part of the communication. Further, they make no distinction between the speaker and the listener or between the caller and the call recipient. Rather, all are equally referred to as ‘parties.’ Thus, there is an implied recognition in sections 632 and 632.7 that all parties are participants in and necessary to the singular ‘communication,’ and that all parties stand on equal footing thereto.”
“Thus, given the statutory language, what it includes and what it omits, we hold that sections 632 and 632.7 prohibit recording a communication, in whole or part, without the consent of all parties, no matter the particular role or degree of participation that a party has in the communication.”
Section 632 imposes civil liability on anyone who records “intentionally and without the consent of all parties to a confidential communication” “by means of a telegraph, telephone, or other device, except a radio.”
“Confidential communication” is defined as anything that “may reasonably indicate that any party to the communication desires it to be confined to the parties thereto” and excludes statements made in public hearings.
Section 632.7(a) imposes civil liability on anyone who intentionally records “without the consent of all parties to a communication” between devices including cellular, landline, and cordless phones. “Communication” is defined as including transmissions made by voice, data, image, and facsimile.
Yelp argued that one-sided recordings of only its sales representatives does not amount to a “simultaneous transcription” of Gruber’s statements and isn’t expressly prohibited under CIPA.
Jackson said Yelp’s argument misconstrues a critical distinction made by the California Supreme Court, in its 2002 opinion Flanagan v. Flanagan, between “simultaneous disseminations” of firsthand conversations and “secondhand repetitions of contents of conversations.”
As argued by Gruber, the one-sided recordings of conversations with Yelp sales representatives revealed their reactions to Gruber’s statements “firsthand and in real time,” Jackson observed.
“This differs significantly from the ‘secondhand repetition’ that the California Supreme Court has deemed outside the scope of CIPA,” Jackson said.
Yelp insisted its phone recordings for business purposes of training and quality assurance fell outside of CIPA’s intended protections.
“Even if true, however, the legislative intent in this case is beyond question—to protect individuals’ privacy and, to that end, to prohibit business practices, whether legitimate or not, that unnecessarily infringe on that privacy,” Jackson wrote, adding:
“Our interpretation of CIPA does not preclude a corporation such as Yelp from engaging in one-way recordings for the indicated purpose of sales training or quality control. Our holding does, however, make such recording illegal under CIPA if consent is not first obtained from all participants of the call.”
Jackson also determined Wiss erred in finding §632.7 does not apply to Yelp’s VoIP technology based on its lack of regulation by the California Public Utilities Commission (“CPUC”).
“We, however, question the significance of the CPUC’s failure to regulate VoIP technology when it comes to the proper application of CIPA, a legislative scheme concerned with illegal recording of confidential communications,” Jackson wrote.
“Neither Yelp’s brief nor the trial court’s order squarely addressed this issue. Moreover, as Gruber and amici aptly note, several federal courts have refused to dismiss or summarily adjudicate a Penal Code section 632.7 claim based merely on the fact that the defendant used VoIP technology.”
An amicus brief filed by consumer and privacy rights groups argued against a finding that VoIP technology was not governed by §632.7, citing cases in which federal courts wrestled with the technology’s classification under the statute.
“In each of these nonbinding federal cases, the district court declined to decide as a matter of law that section 632.7 does not govern a defendant’s use of VoIP technology, reasoning that the issue warranted further factual development before a ruling could be made,” Jackson observed.
“We agree with this approach and adopt it for purposes of this appeal,” she wrote.
The case is Gruber v. Yelp Inc., A155063.
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