United States: Call Recording Class Actions: Why Your Business Should Care

There has been a recent upswing in telephone call recording actions across the U.S., so businesses should be mindful of their call-recording practices, be on the alert for future litigation, be proactive in training employees and providing them manuals that address proper call-recording protocols and practices, the author writes.

 Imagine being served with a putative class action complaint that seeks millions in damages against your company for ''illegal recordings.'' Whether you are a sophisticated general counsel of a large corporation or an in-house lawyer at a small mom-and-pop shop, this is unwelcome news. Class actions inevitably disrupt business operations, and they are very expensive to litigate and often are even more expensive to settle. You skim the complaint and discern quickly that this is a callrecording class action, based on another state's law, such as, for example, California Invasion of Privacy Act (CIPA), Penal Code sections 631 et seq. And at first, you are not in the least concerned because you do not actually do business in that other state.

''My company is incorporated in Delaware and based in Texas,'' you may say. ''We have a small base of California customers and no offices in California.'' ''Our calls are recorded in a small town in Texas, and our employment agreements authorize all such recordings.'' Be it as it may, CIPA does not excuse out-of-state businesses from compliance even in these circumstances. Instead, the law broadly prohibits unconsented recordings of any calls to or from unsuspecting California residents—regardless of where the recordings actually occur, or where your business operations are, or if those who push the record button have themselves consented. What's more, you may be completely unaware that the customer you are recording has the protection of CIPA. Suffice it to say, CIPA is as unique as it is farreaching, similarly to a handful of similar laws in other states.

Enacted in the 1960's, CIPA is a somewhat unusual law, which prohibits unconsented recordings, unless all the parties to the conversation are informed and agree to be recorded. These types of statutes are known as a ''two-party-consent'' law. Although most states are ''one-party-consent states''—which broadly authorize secret recordings, as long as at least one party to the conversation agrees to being recorded—the regulations of recorded conversations in a handful of ''two-party'' consent states are much stricter. These states, which appear to include California, Connecticut, Florida, Illinois, Maryland, Massachusetts, Montana, Nevada, New Hampshire, Pennsylvania, and Washington, require that all parties understand and agree to be recorded at the outset of the recording.

Recently, there has been an upswing of call recording actions brought by residents of these states. While the exact reason for this increase of call-recording cases in states like California is difficult to pinpoint, several factors may be to blame.

First, unlike other privacy class actions, CIPA plaintiffs do not need to show an actual injury or concrete harm to prevail. Rather, statutory damages are available to plaintiffs on an almost ''automatic'' basis, without proof of actual harm. This allows plaintiffs to navigate around the ''particularized harm'' bar that often has been successfully utilized by defense lawyers in other types of privacy cases (at least until the most recent Ninth Circuit's 2017 ruling in Spokeo, which has somewhat relaxed this standard).

Second, CIPA is a very plaintiff-friendly law. As such, its statutory requirements, high damages per each recorded call, and the fact that it is more difficult to defeat certification in these cases on commonality and typicality grounds all make this an attractive case for plaintiffs' law firms.

Third, a wave of recent state and federal court decisions produced some inconsistencies in how CIPA laws are interpreted. Many such cases culminated in plaintiff-friendly ruling. Inevitably, this emboldened the plaintiffs' class action bar and helped revive this wave of cases.

Lastly, CIPA class actions are expensive for companies to litigate, and class damages can be significant. This again means that any businesses that secretly or even unwittingly record calls in two-consent states are a very easy target for the plaintiffs' bar.

Of particular interest to these plaintiffs' lawyers and to businesses defending call-recording cases are two statutes: California Penal Code section 632, which prohibits recordings of confidential communications and section 632.7, which prohibits recordings of calls on cellphones and wireless phones.

Section 632(a) provides that a ''person who, intentionally and without the consent of all parties to a confidential communication, uses an electronic amplifying or recording device to eavesdrop upon or record the confidential communication, whether the communication is carried on among the parties in the presence of one another or by means of a telegraph, telephone, or other device, except a radio, shall be punished by a fine not exceeding two thousand five hundred dollars ($2,500) per violation, or imprisonment in a county jail not exceeding one year, or in the state prison, or by both that fine and imprisonment.''

Section 632.7(a) states that any ''person who, without the consent of all parties to a communication, intercepts or receives and intentionally records, or assists in the interception or reception and intentional recordation of, a communication transmitted between two cellular radio telephones, a cellular radio telephone and a landline telephone, two cordless telephones, a cordless telephone and a landline telephone, or a cordless telephone and a cellular radio telephone, shall be punished by a fine not exceeding two thousand five hundred dollars ($2,500) . . . .''

Although there has been a great deal of disagreement over how these statutes should be interpreted, the general—albeit oversimplified—consensus is that section 632 applies to landline calls that are confidential in nature; while section 632.7 bars recordings of any calls (confidential or not) that take place over a wireless phone. Interestingly, courts have not yet expressly ruled on whether VOIP calls, which are neither landline, nor cellular phones but are an internet-based application, are prohibited by CIPA.

Lack of landline phones or utilization of VOIP services for call recording are not the only potential defenses, however. Businesses often record calls for quality assurance and service-monitoring purposes. Arguably, these legitimate reasons for recording customer calls should fall outside of the scope of statutes like CIPA. Responding to this concern, at least some courts have found this to be a viable defense in CIPA cases.

All valid defenses must come into play in callrecording class actions. After all, legitimate business recordings should be encouraged because they help provide better customer experience, verify disputes, and improve the quality of service. Undisputedly, the lawmakers' goal was not to prohibit such service monitoring—it was to prevent unlawful third-party interceptions of calls and eavesdropping, as the legislative history of CIPA readily demonstrates.

Unfortunately, while some courts have adopted this reasoning, many others have rejected it. The outcome of any new case will depend on the judge who ultimately decides these issues and on whether knowledgeable and skilled privacy class action lawyers represent the company's interests.

It cannot be underscored enough that relying on general litigation attorneys without CIPA experience to defend privacy class actions will not only expose the company to risks, but it will also potentially generate more unfavorable law and create plaintiff-friendly precedential rulings in California and across the nation. Inevitably, this will lead to yet another increase in the number of call-recording class actions, affecting more and more businesses down the road. So it is imperative to work with a knowledgeable legal team and to build a strong defense strategy at the outset of the case.

Looking ahead, businesses should be mindful of their call-recording practices long before the problems arise. The number of filings of call-recording class actions will likely steadily increase in the next few years. Companies facing the biggest risk of lawsuits in this area are those that conduct their business in one-party-consent state but occasionally or frequently interact with the residents of two-party-consent states such as California, Florida, or Washington, to name a few.

Inevitably, this situation will result in unconsented recordings and will potentially provide a sufficient basis for class action allegations. With a large enough customer base, the class can be deemed sufficiently numerous and may be quickly certified. To avoid litigation, companies that record calls should provide a disclaimer at the outset of the call, whether or not their home state requires such a disclaimer. Businesses should also be on alert for future litigation and be proactive in their housekeeping, including training employees and providing manuals that address proper call-recording protocols and practices. It remains to be seen if VOIP, service-monitoring, and other defenses will prove fruitful, as federal courts around the country tackle these issues. But the best way to defend against costly callrecording class actions is to avoid them in the first place—by taking the steps to train employees, write good policies, provide valid disclaimers, or cease recordings altogether.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Natalie A. Prescott
In association with
Related Topics
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions