Privacy and Security Law Blog

Posted by Bruce E.H. Johnson

My LA partners Kelli Sager and Al Wickers have written about a new California decision, which has significant implications for everyone — including especially unsuspecting souls who never intend to set foot in the state but happen to have a telephone and a recording device. 

California's privacy laws, which have criminal penalties, can be applied to out-of-state individuals and businesses.

In their July 13th decision, Kearney v. Salomon Smith Barney, the California Supreme Court found that the state’s two-party-consent electronic-recording statute, Penal Code § 632, prohibits out-of-state recording of telephone calls made into California, even if a call is made from and is recorded in a one-party-consent state.  In this case, Salomon Smith Barney had secretly recorded telephone calls made from its Atlanta office to clients in California, a practice that is legal under Georgia law. 

As Kelli and Al note:

The California Supreme Court’s decision expanding the reach of Section 632 has serious ramifications for companies doing business in the state. It affects not only companies that record telephone conversations as a means of protecting themselves from false claims of malfeasance or misconduct, but also a wide range of businesses and individuals that routinely record telephone calls for a variety of reasons.

The Kearney decision is an example of governmental efforts to extend privacy and other regulations across state and national borders, consistent with the expansion of technology.

Even if you are not in California you are now subject to its state privacy laws if you make a call into the state.  This opinion shows that "a business cannot rely on another state’s one-party-consent statute when recording calls made into California, and serves as a reminder that recording calls having any connection to this state without the consent of all parties may expose one to civil and criminal liability."