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Inside Privacy Updates on Developments in Global Privacy & Data Security from Covington & Burling LLP

Ninth Circuit Revives Privacy Class Action Over ADT Call Recordings

Posted in Litigation, United States

The Ninth Circuit revived a putative class action alleging that ADT Security Services violated the California Invasion of Privacy Act (“CIPA”) by recording the plaintiff’s phone call to the company without consent, remanding the case to allow the plaintiff to file an amended complaint. In a published opinion, the panel wrote that while it agreed with the district court that plaintiff’s complaint failed to state a plausible claim upon which relief could be granted, it would nevertheless remand the case in order to give the plaintiff an opportunity to allege that he reasonably expected that his call was confidential. “In an abundance — perhaps an overabundance — of caution, we remand this case to the district court for it to consider allowing the plaintiff to amend his complaint in a manner that would satisfy federal pleading standards,” the opinion said.

John Faulkner brought his putative class action in California state court in February 2011, alleging that ADT recorded his phone conversation with a company representative without his consent in violation of CIPA, Cal. Penal Code § 632. The plaintiff specifically alleges that he called ADT in March 2010 to dispute a charge the company assessed, and that, when he was transferred to the company’s technical line, he heard periodic beeping sounds during his conversation. When he inquired about the sounds, he was told that the conversation was being recorded, according to his complaint.

A judge in the Northern District of California dismissed the case in May 2011, holding that Faulkner’s conversation was not “confidential” because he had no objectively reasonable expectation that the call would not be overheard or recorded, and that he had failed to allege circumstances that would support an expectation of privacy in his call. 

Section 632(a) provides, in relevant part, that “[e]very person who, intentionally and without the consent of all parties to a confidential communication, by means of any electronic amplifying or recording device . . . records the confidential communication” violates the statute. The statute also provides that “[t]he term ‘confidential communication’ includes any communication carried on in circumstances as may reasonably indicate that any party to the communication desires it to be confined to the parties thereto . . . .”  The statute does not reach a communication made “in any other circumstance in which the parties to the communication may reasonably expect that the communication may be overheard or recorded.”  

The California Supreme Court has held that a conversation is “confidential” within the meaning of § 632 “if a party to that conversation has an objectively reasonable expectation that the conversation is not being overheard or recorded.”

The Ninth Circuit wrote Thursday that to survive ADT’s motion to dismiss, Faulkner would have to allege facts that would lead to the “plausible inference” that his communication was confidential. Faulkner’s present allegation that his conversation was “confidential” because it was carried on “in circumstances as may reasonably indicate that any party to the communication desires it to be confined thereto” is nothing more than a “bald legal” conclusion that could not defeat a motion to dismiss, the Ninth Circuit held.

Senior Judge Robert D. Sack of the Second Circuit, sitting by designation, authored the opinion.