Pillsbury Winthrop Shaw Pittman

Class certification properly denied where individual questions predominated under California’s telephone recording statutes

By Brian D Martin, Roxane A Polidora, Richard M Segal and Andrew D Bluth

The California Court of Appeal unanimously affirmed a trial court ruling denying class certification in a lawsuit filed under California’s Invasion of Privacy Act. The court held that the determination of whether each potential class member had a reasonable expectation that his or her phone conversations would not be recorded would require too many individual fact inquiries to be treated on a class basis.

Companies targeted in the recent onslaught of class action lawsuits filed under California’s telephone recording statutes received welcomed news when a California appellate court upheld the denial of class certification in a putative class action under California Penal Code sections 630, et seq. (Invasion of Privacy Act). In the first appellate decision of its kind, the court held that the need for individualised inquiries regarding whether each potential class member expected his or her communication to be confidential renders such lawsuits unsuitable for determination on a class-wide basis.

In Hataishi v First American Home Buyers Protection Corporation 14 C.D.O.S. 1881 (21 February 2014), the California Court of Appeal for the Second Appellate District affirmed a trial court order denying class certification in a case alleging that the defendant intentionally recorded telephone calls without warning or consent of all parties to the communication, in violation of the Invasion of Privacy Act. The court held there was substantial evidence that assessing confidentiality would require individualised proof where (1) the putative class representative had prior telephone calls with the defendant in which she was told the calls may be monitored or recorded, (2) the putative class representative had previous experience with other businesses where she understood her call could be recorded or monitored for quality assurance and (3) expert survey results demonstrated that customers have divergent privacy expectations based upon their unique background and experiences, including where customers had received prior call recording disclosures…

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