ERIC GRUBER et al., Plaintiffs and Appellants, v. YELP INC., Defendant and Respondent.
A155063
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA FIRST APPELLATE DISTRICT DIVISION THREE
Filed 10/7/20
Super. Ct. No. CGC-16-554784
CERTIFIED FOR PUBLICATION
FACTUAL AND PROCEDURAL BACKGROUND
Yelp operates an Internet-based business that publishes ” ‘crowd-sourced reviews about local businesses’ ” on its Web site and mobile app. Yelр also allows business owners to advertise their businesses on Yelp‘s Web site and mobile app by purchasing advertisement space. To promote this aspect of the business, Yelp employs over 2,000 sales representatives to contact business owners by phone and email to solicit sales of its advertisement space. These sales representatives generally make about 55 to 70 outbound sales calls to customers and potential customers each day.
Gruber is a solo attorney practitioner and law firm owner who was contacted by phone a dozen times or more by Yelp sales representatives between March 2014 and July 2016 “attempting to sell him advertisement space.” These calls, which took place between Gruber and three Yelp sales representatives, Spencer Fossen, Monica Page and Corey Young, sometimes lasted seconds and other times lasted up to 24 minutes. During thesе calls, in which the sales representatives’ voices were recorded, Gruber discussed confidential and financial information regarding his law firm, which opened in 2012. In addition, when conversing with Young, who happened to be his friend, Gruber sometimes joked, discussed private topics including beer drinking, and used profanity or other colorful language. Gruber did not recall that any of the Yelp sales representatives notified him that their phone conversations were being recorded, and he therefore believed their conversations ” ‘were, and would remain, private to the parties on the telephone.’ ”
I. The Complaint.
On October 12, 2016, Gruber filed a complaint asserting three causes of action: (1) unlawful recording and intercepting of communications (
On or about December 19, 2016, Yelp filed an answer in which it denied each of Gruber‘s allegations and asserted 24 separate affirmative defenses.
II. Yelp‘s Summary Judgment Motion.
Yelp moved for summary judgment or, in the alternative, summary adjudication (hereinafter, summary judgment motion) on the primary ground that its investigation had revealed none of the sales calls between Gruber and Yelp sales reprеsentatives had been monitored or recorded in their entirety. Yelp also presented evidence regarding its policy and practice of recording phone calls between its sales representatives and prospective clients. Specifically, evidence revealed that Yelp engages in both “two-way” and “one-way” recordings. For two-way recordings, Yelp records the voices of both the sales representative and the prospective client. For one-way recordings, Yelp records only the sales representative‘s voice. Moreover, Yelp‘s one-way and two-way recordings follow different protocols.
A. Two-way Recordings.
Two-way recorded calls are made through Yelp‘s phone system and are used for training and quality purposes.3 A sales representative must activate this system manually with a recording feature located on his or her desktop computer.
Two-sided recоrdings are automatically saved as voicemails accessible from the sales representative‘s desk phone. A file is automatically created and stored on one of two Yelp servers once the recording or call ends.4 A separate feature of Yelp‘s phone system, which also requires manual activation by the sales representative, automatically generates an email to the representative after a call ends attaching a copy of the two-way recording voicemail. According to Yelp systems engineer Zachary Pleau, to his knowledge all sales representatives utilize this “voicemail-email” feature so that all of their incoming voicemails can be accessed through email. On the other hand, while Yelp sales representatives have discretion to use the two-way recording feature during their sales calls, both Fossen and Kinsey Livingston, Yelp‘s senior sales training mаnager, testified that in actuality they “rare[ly]” did.
Yelp also uses customer relationship software to manage and store all client interactions. Yelp‘s implementation of this software automatically creates and maintains records of all calls made to and received from a potential client and indicates whether a particular call was silently monitored, coached by a supervisor, or recorded.
Yelp has a corporate policy that requires all sales representatives to provide notice to a phone call participant and obtain his or her consent before recording the phone call. All sales representatives receive education and training on this notice policy during their initial orientation and training and, afterward, receive regular reminders from their supervisors.
Discovery yielded no evidence of two-way recordings made of Gruber‘s phone calls with Yelp sales representatives. After searching the information from its customer relationship software relating to Gruber‘s call history, Yelp confirmed that no call between Gruber and any sales representative had been monitored, coached or two-way recorded.
B. One-way Recordings.
Unlike two-way recordings, every outbound Yelp sales call is one-way recorded, meaning the sales representative‘s voice is captured. This type of recording is done through a system called Trivium SonicView. Similarly to every two-way recorded call, every one-way recorded call is documented in Yelp‘s “customer relationship platform.”
Discovery revealed that Yelp sales representatives made several one-way recordings of their calls with Gruber, capturing their voices but not Gruber‘s voice. According to Gruber, he did not receive notice from the Yelp representatives that any of his calls were being recorded. This would have been consistent with Yelp‘s corporate policy of only providing notice in advance of engaging in two-way recordings. Gruber thus spoke freely on a variety of topics, including his need for funds to hire a bookkeeper to straighten out his law firm‘s business accounts and the fact that he answered his own phone because he did not have a receptionist. Further, Gruber had a personal friendship with Corey Young, and therefore spoke with particular ease during their sales calls. For example, Gruber revealed personal information to Young, including information regarding his beer drinking habits; used profanity and other colorful language; and made off-color jokes. According to Gruber, had he known these phone calls were being monitored or recorded, he would not have spoken in this casual manner and would have altered both the substance and the tenor of his words.
C. Voice over Internet Protocol or “VoIP.”
Pleau attested in his verified declаration that Yelp sales representatives use the Shoretel phone system to place and receive calls to and from business owners. This phone system uses Voice over Internet Protocol (VoIP) technology and is used for calls made by Yelp sales representatives, whether the call is one-way or two-way recorded.
III. The Trial Court‘s Order and Judgment.
On April 16, 2018, after a contested hearing, the trial court granted Yelp‘s motion for summary adjudication as to all causes of action after finding no triable issues as to whether Yelp violated
DISCUSSION
Gruber challenges the trial court‘s grant of summary adjudication in Yelp‘s favor with respect to his causes of action under
The rules governing our review of Gruber‘s challenge are well established.5 With respect to summary adjudication, a motion should be granted if the papers submitted show there is no triable issue as to any material fact and the moving party is entitled to prevail on a cause of action as a matter of lаw. (
We “independently assess the correctness of the trial court‘s ruling by applying the same legal standard as the trial court in determining whether any triable issues of material fact exist, and whether the defendant is entitled to judgment as a matter of law.” (Rubin v. United Air Lines, Inc. (2002) 96 Cal.App.4th 364, 372.) In making these assessments, we strictly construe the moving party‘s evidence and liberally construe the evidence favoring the party opposing the motion, resolving all doubts in the opposing party‘s favor. (Kight v. CashCall, Inc. (2011) 200 Cal.App.4th 1377, 1387 (Kight).) We affirm an order granting summary adjudication if it is legally correct on any ground raised in the trial court. (Ibid.)
Finally, where, as here, the issues on appeal require interpretation of statutory provisions, we independently review the statute, applying the well-established statutory construction principles set forth in detail below (pp. 13-17, post). (California Building Industry Assn. v. State Water Resources Control Bd. (2018) 4 Cal.5th 1032, 1041; Kight, supra, 200 Cal.App.4th at p. 1387.)
I. There is no triable issue of fact as to whether Yelp made two-sided recordings of Gruber‘s calls.
The trial court found there were no triable issues as to whether Yelp violated
First, the verified declaration of Yelp‘s systems engineer Zachary Pleau, in charge of Yelp‘s phone system, confirmed that after personally reviewing the automated system that archives all incoming and outgoing calls, none of the conversations between Gruber and Yelp sales representatives were monitored or two-way recorded. In addition, sales representative Fossen testified in deposition that he “[r]arely” two-way recorded his sales calls and never two-way recorded his calls with Gruber. The few times (a dozen or less) that Fossen used the two-way recording feature on his phone, he adhered to Yelp‘s policy of providing prior notice to the prospective client “100 percent of the time.” Consistent with Fossen‘s testimony, Kinsey Livingston, Yelp‘s most qualified witness with respect to certain corporate training policies, testified in deposition that all managers and new hires are trained during their first 60 days of employment on the practice of giving notification to business owners before monitoring or recording a call. Sales managers are also trained to regularly enforce this policy with reminders to their representatives.
In opposition to Yelp‘s showing, Gruber insists “there is substantial evidence that a majority of the calls with [him] were in fact ‘two-way’ recorded.” Gruber reasons that, although he had conversations with three Yelp sales representatives (Fossen, Young and Page), only Fossen submitted a declaration confirming that he never recorded Gruber‘s voice during a call (although he acknowledged sometimes two-way recording calls). In addition, Gruber points out that Pleau attested that he did not check the electronic files on the two servers that stored two-way recordings to confirm there were no recordings of Gruber‘s calls. Nor did Pleau deny the possibility that Gruber‘s voice could possibly have been recorded.
In addition to this witness testimony, Gruber relies on evidence that Yelp sales representatives are generally not required to keep track of their two-way recordings, to store them in any particular location to ensure they remain accessible, or to log whether a particular customer received the requisite notice for two-way recording. Moreover, Yelp managers do not review two-way recorded calls to confirm proper notice was given. Finally, Gruber makes much of the fact that the two-way recording files on Yelp‘s servers are subject to retention for only one year before being deleted. Under this retention policy, Yelp had no files of two-way recordings made prior to November 2016.
We agree with the trial court that Gruber‘s evidence is insufficient to raise a triable issue of fact with respect to whether Yelp two-way recorded his phone calls. First, Gruber correctly notes that, of the three sales representatives with whom he had conversations, only Fossen attested to the fact that no two-way recordings were made. However, Yelp offered other evidence to еstablish there were no two-way recordings of Gruber‘s calls with the other two representatives with whom he spoke (Young and Page).6 Zachary Spector, Ryan Flannigan and Nicholas Cunningham, the sales managers who supervised Page and Young, signed sworn statements that
they had no recollection of or reason to believe the phone calls between Page or Young and Gruber were monitored. These managers also swore that they strictly enforced Yelp‘s policy requiring all sales representatives to notify clients before monitoring or recording calls.
In addition, while Gruber faults Yelp for not conducting searches for two-way recordings stored on its two servers, Pleau testified that he searched the email histories of all sales representatives who communicated with Gruber in relation to this case. Although Pleau found about a dozen emails with voicemail attachments in these histories, which indicated the representatives hаd activated the “automated voicemail to email” feature on their desktops, none of the emails contained voicemails with two-way recordings of Gruber‘s voice.7 Pleau also confirmed that, because all emails of Yelp employees are archived indefinitely on the computer servers of Yelp‘s email service provider, Google, his search would have revealed any two-way recordings if they had existed.
This record reflects that, despite a reasonable search of the locations where any two-way recordings of Gruber‘s voice would likely have been found (to wit, the email histories of all the sales representatives likely to have communicated with him in connection with a Yelp sales pitch), no such recordings were identified. Moreover, as Pleau attested, searching Yelp‘s two servers for any potential two-way recordings would necessarily have been a manual, multisteр process “highly susceptible to error” and fraught with “serious privacy concerns . . . .” Since Yelp employs about 2,300 sales representatives who each make 55 to 70 sales calls a day, this multistep process would likely take well over a year to complete and cost several million
dollars. Thus, even accepting Gruber‘s claim that a remote possibility exists that Yelp‘s servers could store, or could have stored, two-way recordings of Gruber‘s voice, this remote possibility, without specific facts, does not enable him to survive summary adjudication. (See
Accordingly, on this record, the trial court‘s factual finding that there are no two-way recordings of Gruber‘s voice stands.
II. CIPA governs “one-sided recordings.”
The fact that plaintiff‘s voice was not recorded, however, does not necessarily defeat his CIPA claims. On the contrary, the second issue at hand is purely legal: Does
“Under settled canons of statutory construction, in construing a statute we ascertain the Legislature‘s intent in order to effectuate the law‘s purpose. [Citation.] We must look to the statute‘s words and give them ‘their usual and ordinary meaning.’ [Citation.] ‘The statute‘s plain meaning controls the court‘s interpretation unless its words are ambiguous.’ [Citatiоns.] ‘If the statutory language permits more than one reasonable interpretation, courts may consider other aids, such as the statute‘s purpose, legislative history,
and public policy.’ [Citation.]” (Imperial Merchant Services, Inc. v. Hunt (2009) 47 Cal.4th 381, 387-388.) However, “resort to legislative history is appropriate only where statutory language is ambiguous.” (Kaufman & Broad Communities, Inc. v. Performance Plastering, Inc. (2005) 133 Cal.App.4th 26, 29.)
Relevant here, CIPA was enacted in 1967 for the purpose of “protect[ing] the right of privacy by, among other things, requiring that all parties consent to a recording of their conversation.” (Flanagan v. Flanagan (2002) 27 Cal.4th 766, 769 (Flanagan).) ” ‘In enacting [CIPA], the Legislature declared in broad terms its intent “to protect the right of privacy of the people of this state” from what it perceived as “a serious threat to the free exercise of personal liberties [that] cannot be tolerated in a free and civilized society.” (
To this end,
Based on the language of both
We agree with this reasoning. “[W]hen statutory language does not explicitly address a subject and the language is potentially susceptible of differing constructions, we must presume the Legislature intended reasonable results consistent with its expressed purpose.” (Kight, supra, 200 Cal.App.4th at p. 1392, citing People v. Zambia (2011) 51 Cal.4th 965, 972.) Relevant here, “California must be viewed as having a strong and continuing interest in the full and vigorous application of the provisions of
This case law reflects an understanding that the term “communication” for purposes of CIPA connotes a singular conversation or exchange shared between two or more participants. This is consistent with the statutory language. Both
Thus, given the statutory language, what it includes and what it omits, we hold that
In reaching this conclusion, we acknowledge that the California Supreme Court has recognized a “critical distinction” for CIPA purposes between recording a conversation and subsequently repeating the contents of the conversation. (Flanagan, supra, 27 Cal.4th at p. 775.) “While one who imparts private information risks the betrayal of his confidence by the other party, a substantial distinction has been recognized between the secondhand reрetition of the contents of a conversation and its simultaneous dissemination to an unannounced second auditor, whether that auditor be a person or mechanical device. [Citation.] [¶] As one commentator has noted, such secret monitoring denies the speaker an important aspect of privacy of communication—the right to control the nature and extent of the firsthand dissemination of his statements. (Comment, Electronic Surveillance in California: A Study in State Legislative Control (1969) 57 Cal.L.Rev. 1182, 1232.)” (Ribas, supra, 38 Cal.3d at pp. 360-361; see Shulman v. Group W Productions, Inc. (1998) 18 Cal.4th 200, 234-235 [same].)
Yelp alludes to this distinction when arguing that “[b]ecause there is no recording of Mr. Gruber‘s words, the one-sided recording is not a ‘simultaneous transcription’ of his statement.” Yelp‘s argument, however, assumes the same false dichotomies that we have already rejected. As just explained,
Further, notwithstanding Yelp‘s argument, when the Yelp salespeople spoke during the one-sided recordings of their conversations with Gruber, the recordings revealed firsthand and in real time their understanding of or reaction to Gruber‘s words. This differs significantly from the “secondhand repetition” that the California Supreme Court has deemed outside the scope of CIPA. (See Dietemann v. Time, Inc. (9th Cir. 1971) 449 F.2d 245, 249 [“One who invites another to his home or office takes a risk that the visitor may not be what he seems, and that the visitor may repeat all he hears and observes when he leaves. But he does not and should not be required to take the risk that what is heard and seen will be transmitted by photograph or recording, or in our modern world, in full living color and hi-fi to the public at large” (italics added)].)
Yelp also insists that the “legislative intent [of CIPA] was not to prevent businesses from recording statements made by their employees for purposes of training and quality assurance.” 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. As stated above: ” ’This philosophy appears to lie at the heart of virtually all the decisions construing the Privacy Act.’ ” (Flanagan, supra, 27 Cal.4th at p. 775, italics added.) Further, as one means to address these concerns, the Legislature enacted
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 the participants of the call. The Califоrnia Supreme Court reached the same conclusion under comparable circumstances: “As made clear by the terms of section 632 as a whole, this provision does not absolutely preclude a party to a telephone conversation from recording the conversation, but rather simply prohibits such a party from secretly or surreptitiously recording the conversation, that is, from recording the conversation without first informing all parties to the conversation that the conversation is being recorded. If, after being so advised, another party does not wish to participate in the conversation, he or she simply may decline to continue the communication. A business that adequately advises all parties to a telephone call, at the outset of the conversation, of its intent to record the call would not violate the provision.” (Kearney, supra, 39 Cal.4th at pp. 117-118 [applying section 632 to out-of-state businesses].)
Accordingly, because it is beyond question that
As aptly explained by our high court, “California decisions repeatedly have invoked and vigorously enforced the provisions of
Adhering to these important principles and for the reasons stated, we conclude the trial court erred in granting summary adjudication on Gruber‘s
III. Yelp failed to meet its burden of production regarding whether its use of VoIP technology precludes application of section 632.7.
The only remaining issue raised on appeal is whether a triable issue exists as to whether
We find several flaws in the trial court‘s conclusion. First, as Gruber notes, the burden of production on this issue was Yelp‘s, as the party moving for summary adjudication. (See Aguilar, supra, 25 Cal.4th at p. 850) [“the party moving for summary judgment bears an initial burden of production to make a prima facie showing of the nonexistence of any triable issue of
material fact“].) As such, the trial court erred by relying on Gruber‘s “fail[ure] to present any evidence” on this issue when rejecting his claim on summary adjudication.
Moreover, while Yelp insists it met the burden of production on this issue, resulting in a shift of the burden back to Gruber to prove the existence of a triable issue (see Aguilar, supra, 25 Cal.4th at p. 850), the record belies Yelp‘s argument. The only evidence that Yelp produced with respect to the type of telecommunications device it used to place calls to Gruber and other prospective clients—a mandatory element under
This meager evidence did not suffice to meet Yelp‘s burden of production. It contains no information whatsoever regarding what type of phone or device VoIP actually is. A fortiori, it does not establish that a VoIP phone is not, and can never be, a landline, cellular or cordless device. “A summary judgment may not be granted when the moving party has failed to ‘refute [a] tenable pleaded theor[y].’ [Citation.]” (Teselle v. McLoughlin (2009) 173 Cal.App.4th 156, 161-162.)
Yelp nonetheless seems to assume that VoIP phones are not landline, cellular or cordless phones, and therefore are not covered by
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 (among other things). (See
In each of these nonbinding federal cases, the district court declined to decide as a matter of law that
Accordingly, we conclude the trial court further erred in summarily adjudicating Gruber‘s
DISPOSTION
The judgment in favor of Gruber and against Yelp is reversed, and the matter is remanded to the trial court for further proceedings consistent with this opinion. Gruber is entitled to reсover costs on appeal.
Jackson, J.
WE CONCUR:
Siggins, P. J.
Fujisaki, J.
A155063/Gruber v. Yelp Inc.
A155063/Gruber v. Yelp Inc.
Trial Court: Superior Court of the City and County of San Francisco
Trial Judge: Mary E. Wiss, J.
Counsel: Dakessian Law, Mardiros H. Dakessian, Zareh Jaltorossian; KP Law and Zareh Jaltorossian; Da Vega Fisher Mechtenberg, Matthew S. Da Vega, Matthew H. Fisher; Jaurigue Law Group, JLG Lawyers, Michael J. Jaurigue and Abigail Zelenski for Plaintiffs and Appellants.
Mintz Levin Cohn Ferris Glovsky and Popeo, Joshua Briones, E. Crystal Lopez, Nicholas Weiss and Matthew J. Novian for Defendant and Respondent.
Katie Townsend, Bruce D. Brown, Caitlin Vogus and Lindsie Trego for Reporters Committee for Freedom of the Press as Amicus Curiae on behalf of Defendant and Respondent.
Fletcher, Heald & Hildreth and Kevin M. Goldberg for American Society of News Editors and Association for Alternative Newsmedia as Amici Curiae on behalf of Defendant and Respondent.
Jim Ewert for California News Publishers Association as Amicus Curiae on behalf of Defendant and Respondent.
David M. Giles for The E.W. Scripps Company as Amicus Curiae on behalf of Defendant and Respondent.
David Snyder for First Amendment Coalition as Amicus Curiae on behalf of Defendant and Respondent.
Juan Cornejo for The McClatchy Company as Amicus Curiae on behalf of Defendant and Respondent.
Marshall W. Anstandig for MNG Enterprises, Inc. as Amicus Curiae on behalf of Defendant and Respondent.
Sheppard Mullin Richter & Hampton and James Chadwick for MediaNews Group Inc. as Amicus Curiae on behalf of Defendant and Respondent.
Mickey H. Osterreicher for
Davis Wright Tremaine, Laura R. Handman, Alison Schary and Thomas R. Burke for Online News Association as Amicus Curiae on behalf of Defendant and Respondent.
Wiley Rein and Kathleen A. Kirby for Radio Television Digital News Association as Amicus Curiae on behalf of Defendant and Respondent.
Baker & Hostetler, Bruce W. Sanford and Mark I. Bailen for Society of
Ignacio Hernandez for Consumer Federation of California, Consumers for Auto Reliability and Safety, Privacy Rights Clearinghouse, Consumer Action and The Utility Reform Network as Amici Curiae.