Kight v. Cashcall, Inc.
200 Cal. App. 4th 1377
Cal. Ct. App.2011Background
- CashCall monitored telephone conversations between its employees and plaintiffs for quality control during debt collection.
- The class was certified on a claim under Penal Code section 632, alleging eavesdropping without all-party consent.
- The trial court granted summary adjudication against plaintiffs on section 632, based on the theory that only two parties were present to the conversation and a corporation cannot eavesdrop.
- The court declined to address other grounds for summary adjudication, including confidentiality and notice defenses.
- The appellate court reversed the summary adjudication on the ground that a corporation can be liable under section 632 for eavesdropping when a supervisor secretly monitors a conversation between a customer and another employee, and remanded for triable issues on confidentiality and reasonable expectations.
- On remand, the court emphasized that material issues remain regarding whether the conversations were confidential and whether plaintiffs reasonably expected monitoring, as well as whether adequate notice of monitoring was provided.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether section 632 prohibits corporate eavesdropping | CashCall's two-party view defeats section 632 | Section 632 requires a third listener; a corporation cannot be liable in this setup | Section 632 applies; corporation can be liable |
| Whether conversations were confidential communications | Conversations were confidential and publicly unknown listeners violated privacy | Monitoring by a corporate supervisor may not render conversations confidential | Issues of confidentiality triable |
| Whether plaintiffs reasonably expected monitoring | Plaintiffs had a reasonable expectation of privacy from unannounced monitoring | Disclosures and company practices negate a reasonable expectation | Issues of reasonable expectation triable |
| Whether adequate notice of monitoring was provided | Not all calls disclosed monitoring; disclosures were not universal | At least some disclosures occurred; others provided via general borrower notices | Notice adequacy triable |
Key Cases Cited
- Flanagan v. Flanagan, 27 Cal.4th 766 (Cal. 2002) (interprets confidentiality to require reasonable expectation of no listening)
- Frio v. Superior Court, 203 Cal.App.3d 1480 (Cal. App. 1988) (confidentiality defined by expectation of no overhearing)
- O’Laskey v. Sortino, 224 Cal.App.3d 241 (Cal. App. 1990) (alternative view on confidentiality historically conflicting with Frio)
- Warden v. Kahn, 99 Cal.App.3d 805 (Cal. App. 1979) (treatment of confidentiality and third-party listening)
- Lieberman v. KCOP Television, Inc., 110 Cal.App.4th 156 (Cal. App. 2003) (confidentiality and simultaneous dissemination concepts)
- Coulter v. Bank of America, 28 Cal.App.4th 923 (Cal. App. 1994) (eavesdropping and confidentiality considerations for corporate actors)
- Kearney v. Salomon Smith Barney, Inc., 39 Cal.4th 95 (Cal. 2006) (notice and strict enforcement of section 632; choice-of-law considerations)
- Maury, 30 Cal.4th 342 (Cal. 2003) (Fourth Amendment discussion contextualized; irrelevant to civil section 632 scope)
- Thomasson v. GC Services Limited Partnership, 321 Fed.Appx. 557 (9th Cir. 2008) (unpublished federal decision cited for contrast; discusses third-party listening concept)