Communication Is “Confidential” Under Section 632 if a Party Has an Objectively Reasonable Expectation That the Conversation Is Not Being Overheard or Recorded
Section 632, part of California’s Invasion of Privacy Act (Privacy Act), prohibits the intentional recording of a “confidential communication” without the consent of all parties to the communication. Specifically, section 632, subdivision (a) imposes liability on “[e]very person who, intentionally and without the consent of all parties to a confidential communication, by means of any electronic amplifying or recording device, eavesdrops upon or records the confidential communication, whether the communication is carried on among the parties in the presence of one another or by means of a telegraph, telephone, or other device, except a radio....” (Italics added.)
Section 632, subdivision (c) defines the term “ ‘confidential communication’ ” to “include[ ] any communication carried on in circumstances as may reasonably indicate that any party to the communication desires it to be confined to the parties thereto, but excludes a communication made in a public gathering or in any legislative, judicial, executive or administrative proceeding open to the public, or in any other circumstance in which the parties to the communication may reasonably expect that the communication may be overheard or recorded.” (Italics added.)
In Flanagan, supra, 27 Cal.4th 766, our Supreme Court granted review to resolve two conflicting lines of cases pertaining to the meaning of “confidential communication” under section 632. One line of authority known as the “Frio Test” held that “under section 632 ‘confidentiality’ appears to require nothing more than the existence of a reasonable expectation by one of the parties that no one is ‘listening in’ or overhearing the conversation. ” (Frio v. Superior Court (1988) 203 Cal.App.3d 1480, 1490 (Frio).) Under this line of authority, a plaintiff proves a conversation is “confidential” by showing he or she has “an objectively reasonable expectation that the conversation is not being overheard or recorded.” (Flanagan, at p. 768, italics added.) The other line of authority known as the O’Laskey test held that “a conversation is confidential only if the party has an objectively reasonable expectation that the content will not later be divulged to third parties.” (Flanagan, at p. 768, citing O’Laskey v. Sortino (1990) 224 Cal.App.3d 241, italics added.)
After examining section 632’s language and purpose, the Flanagan court endorsed the Frio test and disapproved of the O’Laskey line of cases. The Supreme Court reasoned that “y focusing on ‘simultaneous dissemination, ’ not ‘secondhand repetition’ [citation], the Frio definition of ‘confidential communication’... better fulfills the legislative purpose of the Privacy Act by giving greater protection to privacy interests than does the O’Laskey standard.” (Flanagan, supra, 27 Cal.4th at p. 775.) Thus, the Supreme Court concluded that “a conversation is confidential under section 632 if a party to that conversation has an objectively reasonable expectation that the conversation is not being overheard or recorded.” (Id. at pp. 776-777.)
In Kearney v. Salomon Smith Barney, Inc. (2006) 39 Cal.4th 95 (Kearney), the Supreme Court revisited the showing necessary to establish that a communication is “confidential” under section 632. There, the trial court sustained a demurrer without leave to amend on the ground that the Georgia-based defendant could not be held liable under section 632 for recording telephone conversations with California residents because the conduct was permissible under Georgia law. The Court of Appeal affirmed, but the Supreme Court reversed, holding that section 632 applied to conversations in which only one party was in California.
Although Kearney was primarily a choice-of-law case, the Supreme Court’s governmental interest analysis required it to assess the scope of section 632 and the interests protected by the statute. The court concluded that California had a “strong and continuing interest in the full and vigorous application of... section 632, ” but noted that the statute prohibits monitoring or recording only “without the knowledge or consent of all parties to the conversation” (Kearney, supra, 39 Cal.4th at p. 125, italics omitted) and only “ ‘if a party to that conversation has an objectively reasonable expectation that the conversation is not being overheard or recorded’ ” (id. at p. 117, fn. 7, quoting Flanagan, supra, 27 Cal.4th at p. 777). The Supreme Court nevertheless rejected the Court of Appeal’s suggestion that, under California law, “even in the absence of an explicit advisement, clients or customers of financial brokers... ‘know or have reason to know’ that their telephone calls with the brokers are being recorded.” (Kearney, at p. 118, fn. 10.) The court noted that no authority had been cited “establishing such a proposition as a matter of law, and in light of the circumstance that California consumers are accustomed to being informed at the outset of a telephone call whenever a business entity intends to record the call, it appears equally plausible that, in the absence of such an advisement, a California consumer reasonably would anticipate that such a telephone call is not being recorded....” (Ibid., italics added.) Underscoring the factual inquiry necessary to determine the reasonableness of the plaintiffs’ privacy expectations, the court observed that “because this case is before us after the sustaining of a demurrer, we cannot assume for purposes of this appeal that the telephone conversations here at issue were not ‘confidential communications’ within the meaning of section 632.” (Ibid.)
