In Smith v. LoanMe, Inc. (2019) Super.Ct.No.RIC1612501, I am not impressed with the facts of the case; but, I am impressed with the reasoning and the conclusion. Jeremiah Smith filed a class action complaint against LoanMe, Inc. (LoanMe), alleging that LoanMe violated the California Invasion of Privacy Act (Privacy Act). Specifically, California Penal Code section 630, et seq. Smith alleged that LoanMe violated California Penal Code section 632.7 by recording a phone call with Smith without his consent while he was using a cordless telephone, and he claimed that a “beep tone” at the beginning of the call did not constitute sufficient notice that LoanMe was recording the call. (Id. at p.1)

California Penal Code section 632.7 states:

(a)Every person who, without the consent of all parties to a communication, intercepts or receives and intentionally records, or assists in the interception or receptionand intentional recordation of, a communication transmitted between two cellularradiotelephones, a cellularradiotelephone and a landline telephone, two cordless telephones, a cordless telephone and a landline telephone, or a cordless telephone and a cellularradiotelephone, shall be punished by a fine not exceeding two thousand five hundred dollars ($2,500), or by imprisonment in a county jail not exceeding one year, or in the state prison, or by both that fine and imprisonment. If the person has beenconvictedpreviouslyof a violation of this section orofSection 631, 632, 632.5, 632.6, or 636, the person shall be punished by a fine not exceeding ten thousand dollars ($10,000), by imprisonment in a county jail not exceeding one year, or in the state prison, or by both that fine and imprisonment.

….

The question before the Court of Appeal was whether section 632.7 applies to the recording of a phone call by a participant in a phone call or instead applies only to recording by third party eavesdroppers. This is the reason why this case is so important. California was considered a “two-party” state prior to this opinion, meaning both parties had to consent to being recorded before a recording could take place; and, if necessary, be admissible in court. The Court of Appeal concluded that “section 632.7 prohibits only third party eavesdroppers from intentionally recording telephonic communications involving at least one cellular or cordless telephone.” (LoanMe, Inc., supra, Super.Ct.No.RIC1612501 at p.2.) So, section 632.7 does not prohibit the participants in a phone call from intentionally recording it. This is so important I am going to repeat it again: section 632.7 does not prohibit the participants in a phone call from intentionally recording it.

The Court of Appeal’s reasoning give a beautiful history of the Privacy Act. In essence, in 1967, the Legislature enacted the Privacy Act, California Penal Code section 630, which states “to protect the right of privacy of the people of this state” from technological advances that “led to the development of new devices and techniques for the purpose of eavesdropping upon private communications.” One of the provisions of the original 1967 legislation-section 632-prohibits the intentional recording of a confidential telephone communication without the consent of all parties. ((LoanMe, Inc., supra, Super.Ct.No.RIC1612501 at p.5. citing (Kearney v. Salomon Smith Barney, Inc. (2006) 39 Cal.4th 95,115.))

In 1985, the Legislature enacted section 632.5 as part of the Cellular Radio Telephone Privacy Act of 1985, which provides in relevant part the following: “Every person who, maliciously and without the consent of all parties to the communication, intercepts, receives, or assists in intercepting or receiving a communication transmitted between cellular radio telephones or between any cellular radio telephone and a landline telephone shall be punished by’ a fine, imprisonment, or both.”

In 1990, the Legislature amended the 1985 legislation, renaming it the Cordless and Cellular Radio Telephone Privacy Action of 1985. The amendment added section 632.6, which uses the same language as section 632.5 to extend the same protection to cordless telephones instead of cellular telephones.

In 1992, the Legislature amended the Cordless and Cellular Radio Telephone Privacy Act of 1985 to add section 632.7(a), which states “Every 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 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, imprisonment, or both.”

The Court of Appeal then adds the outstanding summary:

Sections 632.5, 632.6, and 632.7 are all parts of the Cordless and Cellular Radio Telephone Privacy Act of 1985. Section 632.5 prohibits the malicious and nonconsensual interception or receipt of cellular phone calls. Section 632.6 prohibits the malicious and nonconsensual interception or receipt of cordless phone calls. Section 632.7 prohibits the nonconsensual interception or receipt and intentional recording of cellular and cordless phone calls. That is, section 632.7 differs from sections 632.5 and 632.6 in that it (1) removes the element of malice, (2) adds the element of (nonconsensual) intentional recording, and (3) covers both cellular phones and cordless phones in a single code provision.

(LoanMe, Inc., supra, Super.Ct.No.RIC1612501 at p.8.)

LoanMe argued that section 632.7 “clearly and unambiguously applies only to third party eavesdroppers.” (LoanMe, Inc., supra, Super.Ct.No.RIC1612501 at p.8.) Smith argued that section 632.7 “clearly and unambiguously applies to the parties to the phone call as well as to third party eavesdroppers.” (Ibid.) I spoiled the ending by giving it away above, but the Court of Appeal’s rational is on point: “Section 632.7 imposes liability on any person ‘who, without the consent of all parties to a communication, intercepts or receives and intentionally records’ a communication involving a cellular phone or a cordless phone. The statute thus requires that the interception or receipt of the communication be without the parties’ consent. But the parties to a phone call always consent to the receipt of their communications by each other—that is what it means to be a party to the call.” (emphasis added) (Id. at pp.8-9.)

The Court of Appeal held that the “plain meaning of 632.7 aligns with the plain meaning of section 632.5 and 632.6 whose language section 632.7 borrows.” (LoanMe, Inc., supra, Super.Ct.No.RIC1612501 at p.9.) The conclusion, again “section 632.7 clearly and unambiguously applies only to third party eavesdroppers, not to the parties to a phone call.” (Id at p. 12.)

So, why does a family law attorney care about a Civil case opining on a Criminal statute? Because text messages, emails, video recordings and, now, phone recordings can be used in all aspects of a family law case for purposes, for example, of child custody and domestic violence issues. That’s why I care and why you should care is the other party on your calls can record you.