Faulkner v. ADT Security Services, Inc. et al

Filing 27

ORDER by Judge Jeffrey S. White granting 15 Motion to Dismiss. (hlk, COURT STAFF) (Filed on 5/12/2011)

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1 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE NORTHERN DISTRICT OF CALIFORNIA 8 9 JOHN FAULKNER, 11 For the Northern District of California United States District Court 10 12 13 Plaintiff, No. C 11-00968 JSW v. ADT SECURITY SERVICES, INC., ET AL., ORDER GRANTING DEFENDANTS’ MOTION TO DISMISS Defendants. / 14 15 Now before the Court is the motion of Defendants ADT Security Services, Inc. (“ADT”) 16 and ADT Security Systems, West, Inc. (“ADT West”) to dismiss the complaint filed by Plaintiff 17 John Faulkner (“Plaintiff”) or, in the alternative, to strike class allegations. The matter is now 18 fully briefed and ripe for decision. The Court finds that these matters are appropriate for 19 disposition without oral argument. See N.D. Civ. L.R. 7-1(b). Accordingly, the hearing on the 20 motion to dismiss set for May 13, 2011 is hereby VACATED. 21 22 23 The Court declines review of the recordings of Plaintiff’s telephone calls proffered by ADT and overrules Plaintiff’s objection as moot. (Doc. no. 25.) BACKGROUND 24 On February 3, 2011, Plaintiff filed this putative class action in the Superior Court in 25 and for the County of San Mateo against ADT, ADT West and Tyco International (U.S.) Inc. 26 (“Tyco”) (collectively, “Defendants”), alleging claims for violation of California’s privacy 27 laws. ADT is Plaintiff’s home security provider. (Compl. ¶ 10). On or about March 4, 2010, 28 Plaintiff called ADT to dispute a charge assessed by ADT. (Id.) Plaintiff alleges that, “[h]e 1 was transferred to ADT’s technical line, at which point he began hearing periodic beeping 2 sounds during his conversation with the ADT representative.” (Id.) Plaintiff asked about the 3 beeping and was told that his conversation was being recorded by ADT. (Id.). Plaintiff 4 informed the ADT representative that he had not been previously notified that the conversation 5 was being recorded and that he had not consented to the recording of his conversation. (Id. ¶ 6 11.) After telephoning ADT’s customer service line to discuss the issue, Plaintiff alleges that 7 he refused to consent to being recorded, at which point the conversation ceased. (Id. ¶ 12.) 8 9 Plaintiffs alleges causes of action for violation of California Penal Code Sections 632 and 631 for recording a telephone call without his consent. Plaintiff seeks to represent the class of “[a]ll persons and entities in California whose telephone conversations with [ADT, ADT 11 For the Northern District of California United States District Court 10 West and/or Tyco] were recorded by one or more of the Defendants without their consent to the 12 recording of their conversations. (Compl. ¶ 13.) ADT and ADT West removed the action to 13 this Court on March 2, 2011. ADT now moves to dismiss the complaint pursuant to Federal 14 Rule of Civil Procedure 12(b)(6) (“Rule 12(b)(6)”) or, in the alternative, strike the class 15 allegations. 16 17 18 ANALYSIS A. LEGAL STANDARD A motion to dismiss is proper under Rule 12(b)(6) where the pleadings fail to state a 19 claim upon which relief can be granted. The complaint is construed in the light most favorable 20 to the non-moving party and all material allegations in the complaint are taken to be true. 21 Sanders v. Kennedy, 794 F.2d 478, 481 (9th Cir. 1986). The Court may consider the facts 22 alleged in the complaint, documents attached to the complaint, documents relied upon but not 23 attached to the complaint when the authenticity of those documents is not questioned, and other 24 matters of which the Court can take judicial notice. Zucco Partners LLC v. Digimarc Corp., 25 552 F.3d 981, 990 (9th Cir. 2009). 26 Rule 8(a) requires only “a short and plain statement of the claim showing that the 27 pleader is entitled to relief.” Even under the liberal pleading standard of Rule 8(a), “a plaintiff’s 28 obligation to provide the ‘grounds’ of his ‘entitle[ment] to relief’ requires more than labels and 2 Atlantic Corporation v. Twombly, 550 U.S. 544, 555 (2007) (citing Papasan v. Allain, 478 U.S. 3 265, 286 (1986)). Pursuant to Twombly, a plaintiff must not merely allege conduct that is 4 conceivable but must instead allege “enough facts to state a claim to relief that is plausible on 5 its face.” Id. at 570. “A claim has facial plausibility when the plaintiff pleads factual content 6 that allows the court to draw the reasonable inference that the defendant is liable for the 7 misconduct alleged.” Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009) (citing Twombly, 550 8 U.S. at 556). “The plausibility standard is not akin to a probability requirement, but it asks for 9 more than a sheer possibility that a defendant has acted unlawfully. . . . When a complaint 10 pleads facts that are merely consistent with a defendant’s liability, it stops short of the line 11 For the Northern District of California conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Bell 2 United States District Court 1 between possibility and plausibility of entitlement to relief.” Id. (quoting Twombly, 550 U.S. at 12 556-57) (internal quotation marks omitted). 13 B. FAILURE TO STATE A CLAIM 14 1. 15 California’s invasion of privacy law prohibits the recording of a two-way telephone call 16 if one party does not know about the recording. Cal. Penal Code § 632. In Kearney v. Salomon 17 Smith Barney, Inc., 39 Cal.4th 95, 117 (2006), the California Supreme Court recognized that 18 19 20 21 22 23 24 SECTION 632 [u]nder subdivision (a) of section 632, “[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, . . . 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” [italics added in original], violates the statute and is punishable as specified in the provision. . . . Section 632, subdivision (c), in turn, provides that “[t]he term ‘confidential communication’ includes 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 other circumstance in which the parties to the communication may reasonably expect that the communication may be overheard or recorded.” (Italics added in original.) 25 26 A party to a telephone conversation violates Section 632 by “recording the conversation 27 without first informing all parties to the conversation that the conversation is being recorded.” 28 Kearney, 39 Cal.4th at 118. Section 637.2 of the Penal Code creates a statutory private right of 3 1 action, “authorizing any person who has been injured by any violation of the 2 invasion-of-privacy legislation to bring a civil action to recover damages and to obtain 3 injunctive relief in response to such violation.” Id. at 115-16. telephonic communications without first obtaining his consent and that the conversations are 6 confidential “because they are carried on in circumstances as may reasonably indicate that any 7 party to the communication desires it to be confined to the parties thereto.” (Compl. ¶¶ 26, 27.) 8 Plaintiff alleges that he was not told at the outset of the conversation that his call was being 9 recorded. Plaintiff does not concede that he was informed at the outset of his telephone call that 10 his call “may be monitored,” but argues that even if he was so informed, that he was not told he 11 For the Northern District of California Plaintiff alleges that Defendants violated Section 632 by recording confidential 5 United States District Court 4 was being recorded. (Pl’s Opp. to Motion to Dismiss (“Opp.”) at 6-7.) Taking the allegations 12 of the Complaint to be true, Plaintiff has alleged that he was not sufficiently advised that his 13 telephone call would be recorded. 14 Plaintiff must further allege that the telephone call to ADT was a confidential 15 communication under Section 632(c). Kearney recognized that a conversation is confidential 16 within the meaning of Section 632 “‘if a party to that conversation has an objectively 17 reasonable expectation that the conversation is not being overheard or recorded.’” 39 Cal.4th at 18 117 n.7 (quoting Flanagan v. Flanagan, 27 Cal.4th 766, 776-77 (2002)). In Kearney, the 19 California Supreme Court recognized that callers from California who made telephone calls to 20 financial advisors in Georgia had a reasonable expectation of privacy in conversations in light 21 of the “strong privacy interest most persons have with regard to the personal financial 22 information frequently disclosed in such calls.” Id. at 118 n.10. 23 Construing the Complaint in the light most favorable to Plaintiff, the Court determines 24 that Plaintiff had no objectively reasonable expectation that his telephone conversation with 25 ADT would not be overheard or recorded, despite Plaintiff’s allegation that he “desire[d] it to 26 be confined to the parties thereto.” (Compl. ¶ 27; Opp. at 4.) “The test of confidentiality is an 27 objective one defined in terms of reasonableness.” Frio v. Superior Court, 203 Cal.App.3d 28 1480, 1488 (1988) (citation omitted). Plaintiff’s subjective beliefs that his telephone call was 4 1 not being recorded, standing alone, are not sufficient to support the objective determination 2 whether the conversation was confidential under Section 632. Courts that have decided the 3 issue whether a communication was confidential under Section 632 have considered the 4 surrounding circumstances to determine whether the parties had an objectively reasonable 5 expectation that the conversation is not being recorded or overheard. See Flanagan, 27 Cal. 4th 6 at 776-77 (remanding for consideration whether son had objectively reasonable expectation that 7 his private telephone conversations with his father were not being recorded by the father’s 8 wife); Nissan Motor Co., Ltd. v. Nissan Computer Corp., 180 F. Supp. 2d 1089, 1093-94 (C.D. 9 Cal. 2002) (conversations between counsel concerning litigation related matters are confidential communications within the meaning of Section 632); Frio v. Superior Court, 203 Cal.App.3d 11 For the Northern District of California United States District Court 10 1480 (1988) (clients of record producer had reasonable expectation of privacy where “[a]ll the 12 telephone communications were conducted on a one-on-one basis and related to a profitable 13 venture which the speaker reasonably might expect would be confined to the parties”); People 14 v. Pedersen, 86 Cal.App.3d 987, 994 (1978) (“The nature of the meeting and the manner in 15 which it was carried out are such that the court could reasonably conclude that it was no 16 different than other business meetings of the parties that were not confidential.”). Plaintiff fails 17 to allege any circumstances or present any argument to support an objectively reasonable 18 expectation that his telephone call regarding a billing dispute to ADT, a home security provider, 19 would not be recorded, overheard or monitored. 20 In opposition to the motion to dismiss, Plaintiff cites Membrila v. Receivables 21 Performance Management, LLC, 2010 WL 1407274 (S.D. Cal. April 6, 2010). There, the court 22 denied the defendant’s motion to dismiss the Section 632 claim based on allegations that the 23 plaintiff was not given notice at the outset that the call was being recorded. Although the 24 Membrila court did not address the “confidential communication” requirement under Section 25 632(c), the Court determines that the recorded telephone calls at issue there, which were 26 initiated by the debt collector who discussed the plaintiff’s debt and salary in an attempt to 27 collect payment, present circumstances likely to support a reasonable expectation of 28 confidentiality that are distinguishable from this case. Here, Plaintiff called ADT “to dispute a 5 1 charge assessed by ADT.” (Compl. ¶ 10.) Plaintiff has not alleged what circumstances would 2 support an expectation of privacy in such a call. This telephone call did not concern “personal 3 financial affairs” as in Kearney, private family matters as in Flanagan, or other circumstances 4 that would create a reasonable expectation that the conversation would not be recorded. Based 5 on the nature of ADT’s business, i.e., home security, and the character of the telephone call, i.e., 6 a billing dispute, an ADT customer calling ADT to dispute a charge would not have an 7 objectively reasonable expectation that the call would not be recorded or overheard. 8 Plaintiff contends that leave to amend is proper but offers no additional allegations that 9 would satisfy the “confidential communication” requirement under Section 632. (Opp. at 11.) The Court determines that amendment would be futile and grants the motion to dismiss. 11 For the Northern District of California United States District Court 10 2. 12 Plaintiff voluntarily dismisses his claim under Penal Code Section 631 without 13 SECTION 631 prejudice. (Opp. at 2 n.2.) 14 CONCLUSION 15 For the reasons set forth above, the Court GRANTS ADT and ADT West’s motion to 16 dismiss the complaint pursuant to Rule 12(b)(6) WITH PREJUDICE. The Clerk shall close the 17 file. 18 IT IS SO ORDERED. 19 20 Dated: May 12, 2011 JEFFREY S. WHITE UNITED STATES DISTRICT JUDGE 21 22 23 24 25 26 27 28 6

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