654 F.Supp.3d 1075
S.D. Cal.2023Background
- Plaintiff Cecelia Lahr (California resident) sued Fidelity Brokerage Services, LLC under California Penal Code § 637.3 (CIPA) alleging Fidelity’s “MyVoice” system creates and stores biometric voiceprints and examines callers’ voice stress patterns without express written consent.
- Lahr alleges Fidelity began recording voiceprints as early as 2017, advertised MyVoice publicly in 2018, and did not provide adequate written notice/consent; she seeks statutory damages and injunctive relief on behalf of a California class.
- Fidelity moved to dismiss, arguing (1) a Massachusetts choice-of-law clause in the customer agreement preempts CIPA; (2) Lahr gave express written consent by accepting the account agreement; (3) CIPA’s one-year statute of limitations bars the suit; (4) § 637.3 applies only to lie-detection (not identity authentication) and the conduct did not occur in California.
- The court rejected application of the Massachusetts choice-of-law clause to Lahr’s statutory (non‑contract) CIPA claim, and found statute‑of‑limitations and consent issues are fact questions not resolvable on Rule 12(b)(6) on the pleadings.
- The court concluded § 637.3 is limited to systems that examine voice stress patterns to determine the truth or falsity of statements (i.e., lie detection), and that MyVoice, as pleaded, functions as biometric authentication (a ‘‘voice passcode’’), not a lie detector. The complaint was dismissed with leave to amend.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Choice of law | Massachusetts clause governs account enforcement only; CIPA claim is non‑contractual. | Account agreement’s Massachusetts law clause bars CIPA claim. | Clause applies to contract interpretation/enforcement only; does not preclude statutory CIPA claims. |
| Express written consent under §637.3 | Lahr did not provide written consent; any oral/on‑call consent is insufficient; disclosure timing supports lack of consent. | Lahr electronically accepted the customer agreement in 2020, which disclosed MyVoice, constituting express written consent. | Whether written consent was given is a factual question; cannot be resolved on 12(b)(6). |
| Statute of limitations (one year) | Delayed discovery tolls limitations; multiple discrete examinations each trigger new limitations periods. | Plaintiff’s claim is time‑barred because account acceptance occurred >1 year before filing. | Dismissal on statute‑bar ground denied at pleading stage; separate/recurring invasions and delayed discovery are factual issues. |
| Scope of §637.3 (lie detection vs. identification) | MyVoice analyzes stress patterns and thus functions as a lie detector used without consent. | §637.3 targets lie‑detectors; MyVoice is biometric ID/authentication, not for truth‑falsity determination. | Court interprets §637.3 as limited to lie‑detection; MyVoice, as pleaded, is biometric authentication, so plaintiff failed to plausibly allege a §637.3 violation. Complaint dismissed with leave to amend. |
| Geographic scope (California conduct) | Injury occurred in California; Fidelity operates CA locations and calls could be processed in CA. | MyVoice processing occurs outside California; §637.3 applies only to use in California. | Whether examination/recordation occurred in California is factual; dismissal on this ground denied at pleading stage. |
Key Cases Cited
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (pleading must state a plausible claim to survive a motion to dismiss)
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (court must accept well‑pleaded factual allegations but not conclusory assertions)
- Dollar Sys., Inc. v. Avcar Leasing Sys., Inc., 890 F.2d 165 (9th Cir. 1989) (choice‑of‑law clause construed to govern interpretation and construction of the agreement itself)
- In re Sony Gaming Networks & Customer Data Sec. Breach Litig., 903 F. Supp. 2d 942 (S.D. Cal. 2012) (choice‑of‑law provision governing contract interpretation does not bar non‑contractual statutory claims)
- Von Saher v. Norton Simon Museum of Art at Pasadena, 592 F.3d 954 (9th Cir. 2010) (statute‑of‑limitations dismissal on Rule 12(b)(6) appropriate only if bar is apparent on the face of the complaint)
- Aryeh v. Canon Bus. Sols., Inc., 292 P.3d 871 (Cal. 2013) (separate, recurring invasions can each trigger their own statute of limitations)
- Bliss v. CoreCivic, Inc., 978 F.3d 1144 (9th Cir. 2020) (statutory text controls whether multiple acts constitute separate violations)
- Calhoun v. Google LLC, 526 F. Supp. 3d 605 (N.D. Cal. 2021) (discussing separate violations and limitations analysis)