California Appeals Court Ruling Against Yelp Bars Recording of Phone Conversations Without Both Parties’ Consent

On Wednesday, October 7, 2020, the First District Court of Appeal in California ruled that California law prevents anyone from recording either side of a phone conversation without both parties’ consent. San Francisco attorney Eric Gruber previously filed suit against Yelp, Inc., alleging violations of the California Invasion of Privacy Act (“CIPA”) (Pen. Code, § 630 et seq.) for recording conversations between himself and Yelp sales representatives without his notice or consent. The trial court ruled in Yelp’s favor on a motion for summary judgment, finding no triable issues as to whether Yelp violated CIPA. The First District Court of Appeal reversed and remanded the trial court’s decision.

The lawsuit stems from at least a dozen phone calls between Gruber and Yelp’s sales representatives, where Gruber and the sales representatives discussed purchasing advertisement space on Yelp. The calls recorded the sales representatives’ voices, and Gruber “discussed confidential and financial information regarding his law firm.” Gruber sometimes joked and used profanity or other colorful language when on these calls with one of the representatives, Corey Young, who is Gruber’s friend. Gruber did not recall receiving notification by the Yelp sales representatives that their phone conversations were being recorded and, as such, thought that the conversations “were, and would remain, private to the parties on the telephone.”

The second issue addressed by the appeals court was a purely legal issue concerning CIPA: “Does section 632 or section 632.7 [of CIPA] apply where, as here, a defendant records its voice but not the voice of the other party to the call?” After looking at the language of the CIPA sections, the appeals court presumed that the California Legislature intended reasonable results consistent with the express purpose of the statute. Furthermore, the appeals court looked to the case law interpreting CIPA and found the case law was consistent with the language of the statute. As such, the appeals court agreed with Gruber, holding that “sections 632 and 632.7 prohibit recording a communication, in whole or in part, without the consent of all parties, no matter the particular role or degree of participation that a party has in the communication.” The appeals court specifically acknowledged “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” in order to strike down Yelp’s arguments.

The appeals court ruling makes clear that this 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. [The] holding does, however, make such recording illegal under CIPA if consent is not first obtained from all the participants of the call.” Further, the ruling applies to all recordings, whether one-sided or two-sided, in order to protect the privacy interest that CIPA was enacted to protect.

Additional Reading

Ruling against Yelp in S.F. court bars recording either side of phone conversation without both parties’ consent, San Francisco Chronicle (October 8, 2020)

Order in Gruber v. Yelp Inc. (Case No. A155063) (City & County of San Francisco Super. Ct. No. CGC-16-554784)

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