Decoding the California Two-Party Consent Rule
California is one of the few states that has a two-party consent law when it comes to phone conversations. California section 632 makes it a crime for anyone, unless authorized by all parties, to "record" a conversation "by means of any electronic amplifying or recording device."
Importantly, any very intentional recording is almost certainly not authorized by all parties to the conversation. In other words, if you record a phone call without notifying your fellow conversant of the fact, then you almost surely violate California law criminal law. Note, however , that section 632 contains a "business" exemption: "This section shall not apply to the use of an automatic telephone dialing system or an artificial or prerecorded voice to announce the purpose of the call of the right to obtain written consent before the call is made." This provision is targeted primarily toward telemarketers and offers little guidance to other businesses who might wish to record conversations with their customers.
Section 632 also includes a civil liability provision for aggrieved persons: "Any person who has been injured by the recording of a communication in violation of this section may bring an action against the perpetrator and shall be entitled to recover three times the amount of the actual damages but not less than $5,000.00 for each violation of this section for each party to the conversation other than the perpetrator …." This means that a company that records conversations with customers outside the bounds of section 632—including when the customer lives in California or when the content of the conversation touches on California law—will likely be exposed to liability on every call from California customers.
Some Exceptions to the General Rule
Although California is considered a two-party consent state for phone call recording, there are some exceptions. One such exception is any public interaction. In Marin v. Municipal Court for the Central Judicial District of San Bernardino County (1970) 3 Cal.3d 641, the court held that "to carry on a conversation in a public place and to accept it as it is, or to answer a telephone call in his living room with full cognizance that it may be heard by outsiders, is sufficiently entering into a consensual situation with those who overhear." However, it is important to note that the case involved "a situation where there was no stealth and no ‘secretive’ recording device was employed."
While the court in that case did not find a clear definition of what is considered public, the California Supreme Court in Kinney v. Valenzuela (2008) 158 Cal.App.4th 864, 874-875, held that "the potential for surveillance of a conversation occurs whenever an individual has reason to expect that the conversation may be overheard, eavesdropped upon, recorded, or transmitted by anyone — including those who divulge confidential communications to members of their medical and legal support staff" and that "the fact that such surveillance may not have been accomplished does not alter this conclusion, for [s]ection 632 is designed to protect against the risk that such interceptions could occur." In a footnote, the court suggested that "perhaps an outright ‘public forum’ exception would be appropriate" because such an exception does not create a risk of the very interception that Section 632 was enacted to prevent.
Penalties for Recording without Consent
Violating the one party consent recording law may result in potential civil and criminal penalties, as well as federal criminal penalties. While civil liability for violation of the California recording law requires a claim of damages in a California state court, failure to comply with the Federal Wiretap Act can result in imprisonment and/or criminal fines (up to $500 per day of violation, and no more than $10,000 for all violations in any one day).
In addition to liability arising from the violation of state and federal recording laws, claims for invasion of privacy, intentional infliction of emotional distress, interference with contractual relationships and interference with prospective economic advantage are recourse options for an aggrieved phone call participant.
These claims have been asserted against One Party Consent violators in numerous cases, but courts have tended to disallow these claims (or awarded them minimal damages). For example, in Flanagan v. Fleeran, 27 Cal. 4th 777 (2002), the California Supreme Court ruled that "There is no precedent holding that a civil invasion of privacy claim is available for a violation of the eavesdropping statute or the federal wiretap statute." The California Supreme Court also affirmed a lower appellate court’s ruling that interception of telephone calls in violation of California’s One Party Consent statute constituted a trespass, but that invasion of privacy, intentional infliction of emotional distress, and interference with contract claims did not.
Legally Recording a Call
The best practice for staying within the bounds of California’s wiretap law is to obtain consent from both parties as a matter of course at the beginning of a call. The National Association of Broadcasters’ Electronic Media Asset Management Glossary defines "all-party consent" as the "informed consent of each and every party to be recorded, heard, or seen on a telephone or face to face phone call" and "one party consent" as the "consent of a single party to be recorded, heard, or seen of a telephone or face to face phone call."
However, the California Department of Justice has said that, "’one-party’ consent ‘may be sufficient even if some of the parties to the communication (including the non-consenting party) are in another state’") (citing Sussman v. Winkler (2009) 153 Cal.App.4th 893, 898. The Court in Sussman stated that, "California allows the interception of oral telephone communications with the consent of only one party to the communication if [(1)] at least one participant is within California at the time of the interception, [(2)] all parties are given the notice required by Penal Code section 632 and [(3)] the interception does not violate the Fourth Amendment." 153 Cal.App.4th at 898.
Section 632 of the California Penal Code provides that "no person or entity … shall intentionally … record the confidential communication, or any part thereof, by means of any electronic amplifying or recording device; provided, however, that a public utility or telephone corporation may intercept and divulge a communication on its system, or any part thereof, if the disclosure is reasonably necessary to protect the telecommunication system from fraud or abuse … provided that a business entity who engages in marketing … obtains consent." Determining whether the provision applies may be a fact-specific inquiry because the statute requires consideration of whether consent was obtained or notice given. In such cases, even if all-party consent is attainable, it may be technically difficult to obtain.
Implications for Handled Calls
As we’ve noted, the application of California’s two-party consent recording law is analyzed on a case by case basis, and there are many exceptions. That said, there are specific nuances for businesses, particularly those who record calls as a part of standard customer service and client communications.
One issue is employee consent. California does not have an explicit exception for employers recording calls with employees. So, for example, if you enter a meeting with a group of employees, and a party member hits record, that employee could be liable for damages under Penal Code section 637. It has been determined, however, that an employee who is told by an employer that the employer records calls and consents to the recording is deemed to have given implied consent (see notes 11 through 13) thereby creating an exception. A best practice is to have employees sign an acknowledgement or waiver at the outset of employment authorizing the recording.
An implied exception to this rule is that under California Business and Professions Code section 632.7, a business consent is not required where the communication is made to a pager or cellular telephone. Countrywide Financial Corp. v. Brown (2013, 2nd Dist) 218 CA4th 392.
Another important exception for businesses is California’s investigative or clinical exception. Under California Business and Professions Code section 632, it is lawful for "an employer or agent thereof . . . → to overhear, or to record by any electronic device , a communication transmitted between . . . two co-workers who are located in the same private workplace or who are on a telephone call with a purpose to discuss matters within the scope and course of their employment, if all of the parties to the communication consent."
Additionally, the federal Omnibus Crime Control and Safe Street Act of 1968 permits foreign businesses from instituting a policy that records phone conversations in order to assure quality standards or for other purpose generally in the business’s interest.
The California Court of Appeal found that an insurer adequately established an implied exception to Business and Professions Code section 632 in its investigation of a claim against its insured. The insurer recorded conversations with the insured’s former employees. In permitting recovery by the former employees under section 637, the court found that the investigators did not investigate properly as to whether he had the requisite consent under 632, but that an investigation in good faith would have revealed it, and so the insurer was liable under section 637.
In general, in the healthcare context, the California Medical Board, The California Department of Managed Health Care and U.S. Department of Health and Human Services have all determined that neither the privacy standards in California’s Civil Code, Health and Safety Code or federal HIPAA preclude the recording of telemedicine audio and video consultations with a patient’s informed consent.
Comparing with Federal and Other States’ Rules
California is the only state that requires consent from all parties to record a telephone conversation and, in general, California recording laws are stricter than those of other states. For example, other two-party consent states, such as Massachusetts and Maryland, do not require the same "identifying announcement" that California requires if there are more than a set number of parties on the call. In Washington, the law also requires that the person obtaining consent obtain a recording of that consent or hear a beep or tone during the entire length of the conversation. Similarly, Illinois requires that the person recording the conversation obtain consent from the other party. In addition to the consent requirement, in California, the person obtaining consent cannot participate in the call. In most other two-party consent states, consent can be given voluntarily over the call. Georgia and New York laws incorporate a type of "protective order" under which consent can be obtained from a reviewing judge or magistrate if obtaining consent on the call is "unreasonably difficult," but in California a person must attempt to get consent from each participant before initiating the call.
In California, the statute of limitations for a lawsuit for noncompliance with the recording law is one year. Other states have similar time periods, but some states have longer periods, up to six years.
Relevant Cases and Trends
The District Court of Appeal for the First Appellate District in San Francisco recently upheld a lower state court ruling that a Berkeley, CA business owner violated the phone call recording law. The business owner, who operated an auto repair shop in Berkeley and who was licensed as a private investigator, recorded phone calls between his customers and himself at a time when there were no new developments to the law which would have allowed him to do so without first disclosing to his customers that their calls would be recorded. The Court rejected his claim that he was providing surveillance services. Given that surveillance services do not typically involve recording telephone conversations , the Court found that mere neglect and ignorance of the relevant statutes and case law was not a defense to a violation of the law. The Legislature has also updated the statute relating to the crime of unlawfully tapping, or intercepting, a telephone call or communication. As of January 1, 2017, California PC Section 632(e) provides that the criminal offense of illegal phone call recording is punishable by a fine not to exceed $2,500.00 per violation, imprisonment in the county jail for not more than 1 year, or by both fine and imprisonment. Legal practitioners in California should view this change as a very clear signal that law enforcement intends to enforce phone call recording laws rigorously within the state.