43 Cal.App.5th 844
Cal. Ct. App.2019Background
- Plaintiff Jeremiah Smith answered an outbound LoanMe call on a cordless telephone; the ~18‑second call was recorded and a beep tone sounded 3 seconds in; LoanMe did not orally notify Smith and he did not sign consent.
- Smith filed a putative class action asserting Penal Code § 632.7 (cordless/cellular recording) was violated; the trial court conducted a bifurcated bench trial on the "beep tone" issue and found the beep provided notice and that Smith implicitly consented by remaining on the call.
- The trial court entered judgment against Smith; Smith appealed.
- The Court of Appeal requested supplemental briefing on whether § 632.7 applies to participants in a call or only to third‑party eavesdroppers, considering statutory language, legislative history, and related Privacy Act provisions.
- The court held § 632.7 applies only to third‑party eavesdroppers (not to parties who record calls they participate in) and affirmed the judgment for LoanMe because Smith failed to state a claim under § 632.7.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does Penal Code § 632.7 prohibit a party to a cordless/cellular call from recording the call without consent? | §632.7 forbids recording by parties as well as third parties; the statute's words “intercepts or receives” show parties can be covered. | §632.7 applies only to third‑party eavesdroppers because it prohibits intercepting/receiving communications “without the consent of all parties,” which parties cannot do to each other. | §632.7 applies only to third‑party eavesdroppers, not to participants who record calls. |
| Did the beep tone provide constitutionally or statutorily sufficient notice/consent to recording? | Beep tone was insufficient notice; Smith did not consent. | The beep tone (and Smith remaining on the call) provided notice and implied consent. | The trial court found the beep tone gave notice and implied consent, but the Court of Appeal resolved the case on the statutory‑scope ground and held Smith failed to state a §632.7 claim. |
Key Cases Cited
- Kearney v. Salomon Smith Barney, 39 Cal.4th 95 (Cal. 2006) (describing the Privacy Act and § 632’s consent rule)
- Meza v. Portfolio Recovery Associates, LLC, 6 Cal.5th 844 (Cal. 2019) (statutory interpretation principles and context)
- Flanagan v. Flanagan, 27 Cal.4th 766 (Cal. 2002) (background on the Cellular Radio Telephone Privacy Act)
- Lungren v. Deukmejian, 45 Cal.3d 727 (Cal. 1988) (statutory language must be read in context and harmonized)
- Tuolumne Jobs & Small Bus. Alliance v. Superior Court, 59 Cal.4th 1029 (Cal. 2014) (avoid statutory interpretations producing absurd results)