Federal judge limits California call-recording law to traditional phones

In a win for defendants facing California Invasion of Privacy Act claims, U.S. Magistrate Judge Laurel Beeler ruled that recording a voice-over-internet call is not subject to the same consent requirements as a traditional phone call, granting summary judgment to Papa John's and call center operator Cognizant in a proposed class action.

Beeler found that Section 632.7 of the California Penal Code applies only when both parties to a recorded call use one of the three devices named in the statute: landline, cellular or cordless telephones.

"There is no genuine dispute that Cognizant call centers do not use landline, cordless, or cellular telephones, a requirement for liability under the plain language of Cal. Penal Code § 632.7," Beeler wrote.

The plaintiffs claimed Papa John's routes customer service calls to a Cognizant-operated call center, where the calls are recorded without customers' consent. Section 632.7 requires consent from all parties before recording calls between certain types of phones and carries a $2,500 statutory penalty for each violation.

The dispute turned on whether the statute applies when one party uses a landline, cordless phone or cell phone but the other uses a different technology. The plaintiffs argued CIPA still applies, a position that would extend the statute to voice-over-internet protocol systems amid a broader wave of privacy litigation over companies' use of technology to monitor customer interactions.

Beeler sided with the defendants, who argued the law requires two-party consent only when both ends of the call involve devices covered by the statute. Because Cognizant uses a VoIP system, they argued, it did not need consent to record the calls.

Beeler agreed, relying on the statute's text.

"Section 632.7(a) lists five specific device pairings: (1) two cellular radio telephones, (2) a cellular radio telephone and a landline telephone, (3) two cordless telephones, (4) a cordless telephone and a landline telephone, or (5) a cordless telephone and a cellular radio telephone," Beeler wrote. "By identifying a specific device on each side of each pairing, the statute requires a covered device at both ends of the communication."

Papa John's is represented by Duane Morris LLP. Cognizant is represented by Mayer Brown LLP. The plaintiffs are represented by Keller Grover LLP.

The plaintiffs argued that excluding VoIP would create a loophole in the law. But Beeler concluded that the Legislature has addressed VoIP elsewhere and could have done so in Section 632.7 if it intended the statute to apply to internet-based calls.

The plaintiffs also argued that Cognizant's VoIP system falls within the landline category because, in everyday usage, a landline can mean any fixed-location telephone. They noted that Cognizant's system uses a wired connection, making it analogous to a landline.

The court rejected that argument, finding the statute uses the term "landline telephone," not merely "landline," and that Cognizant's system "lacks every characteristic of a traditional landline telephone."

"Section 632.7 focuses on the devices used at each end of the communication, not on the transmission path between them. That VoIP systems use Ethernet cables (twisted-pair wires) does not make them landline telephones any more than a laptop connected to the internet via an Ethernet cable becomes a telephone," Beeler wrote.

The case is Guerra v. Papa John's International Inc., 3:23-cv-01933 (N.D. Cal., filed April 21, 2023).