BILL ANALYSIS Ó
AB 925
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Date of Hearing: May 5, 2015
Counsel: Gabriel Caswell
ASSEMBLY COMMITTEE ON PUBLIC SAFETY
Bill Quirk, Chair
AB
925 (Low) - As Amended April 13, 2015
SUMMARY: Exempts non-confidential communications between a
person or business and a current or former customer regarding
their business relationship from any illegal non-consensual
recording prohibitions. Specifically, this bill: Provides an
exception to the prohibition of calling a mobile phone and
intentionally recording a telephonic communication without the
consent of both parties for all non-confidential communications
between a person or business and a current or former customer of
the person or business, or a person reasonably believed to be a
current or former customer, regarding their business
relationship, including, but not limited to, communications
regarding billing, provisioning, maintaining, or operating the
product or service provided by the person or business.
EXISTING LAW:
1)States that the Legislature hereby declares that advances in
science and technology have led to the development of new
devices and techniques for the purpose of eavesdropping upon
private communications and that the invasion of privacy
resulting from the continual and increasing use of such
devices and techniques has created a serious threat to the
free exercise of personal liberties and cannot be tolerated in
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a free and civilized society. The Legislature by this chapter
intends to protect the right of privacy of the people of this
state. The Legislature recognizes that law enforcement
agencies have a legitimate need to employ modern listening
devices and techniques in the investigation of criminal
conduct and the apprehension of lawbreakers. Therefore, it is
not the intent of the Legislature to place greater restraints
on the use of listening devices and techniques by law
enforcement agencies than existed prior to the effective date
of this chapter. (Pen. Code, § 630.)
2)Provides that every person who, without the consent of all
parties to a communication, intercepts or receives and
intentionally records, or assists in the interception or
reception and intentional recordation of, a communication
transmitted between two cellular radio telephones, a cellular
radio telephone and a landline telephone, two cordless
telephones, a cordless telephone and a landline telephone, or
a cordless telephone and a cellular radio telephone, shall be
punished by a fine not exceeding two thousand five hundred
dollars ($2,500), or by imprisonment in a county jail not
exceeding one year, or in the state prison, or by both that
fine and imprisonment. If the person has been convicted
previously of a violation of specified unauthorized recording
sections, the person shall be punished by a fine not exceeding
ten thousand dollars ($10,000), by imprisonment in a county
jail not exceeding one year, or in the state prison, or by
both that fine and imprisonment. (Pen. Code, § 632.7.)
Exempts the following from these provisions:
a) Any public utility engaged in the business of providing
communications services and facilities, or to the officers,
employees, or agents thereof, where the acts otherwise
prohibited are for the purpose of construction,
maintenance, conduct, or operation of the services and
facilities of the public utility.
b) The use of any instrument, equipment, facility, or
service furnished and used pursuant to the tariffs of the
public utility.
c) Any telephonic communication system used for
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communication exclusively within a state, county, city and
county, or city correctional facility.
3)Provides that every 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, shall be punished
by a fine not exceeding two thousand five hundred dollars
($2,500), or imprisonment in the county jail not exceeding one
year, or in the state prison, or by both that fine and
imprisonment. If the person has previously been convicted of a
violation of specified eavesdropping sections, the person
shall be punished by a fine not exceeding ten thousand dollars
($10,000), by imprisonment in the county jail not exceeding
one year, or in the state prison, or by both that fine and
imprisonment. (Pen. Code, § 632.)
a) Specifies that the term "person" includes an individual,
business association, partnership, corporation, limited
liability company, or other legal entity, and an individual
acting or purporting to act for or on behalf of any
government or subdivision thereof, whether federal, state,
or local, but excludes an individual known by all parties
to a confidential communication to be overhearing or
recording the communication. (Pen. Code, § 632, subd.
(b).)
b) States that the 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 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.
(Pen. Code, § 632, subd. (c).)
c) Provides that except as proof in an action or
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prosecution for violation of this section, no evidence
obtained as a result of eavesdropping upon or recording a
confidential communication in violation of this section
shall be admissible in any judicial, administrative,
legislative, or other proceeding. (Pen. Code, § 632, subd.
(d).)
d) States that this section does not apply to: (Pen. Code,
§ 632, subd. (e).)
i) Any public utility engaged in the business of
providing communications services and facilities, or to
the officers, employees or agents thereof, where the acts
otherwise prohibited by this section are for the purpose
of construction, maintenance, conduct or operation of the
services and facilities of the public utility; or
ii) To the use of any instrument, equipment, facility,
or service furnished and used pursuant to the tariffs of
a public utility; or
iii) To any telephonic communication system used for
communication exclusively within a state, county, city
and county, or city correctional facility.
e) Provides that this section does not apply to the use of
hearing aids and similar devices, by persons afflicted with
impaired hearing, for the purpose of overcoming the
impairment to permit the hearing of sounds ordinarily
audible to the human ear. (Pen. Code, § 632, (f).)
FISCAL EFFECT: Unknown
COMMENTS:
1)Author's Statement: According to the author, "The legislature
initially enacted CIPA in 1967 and amongst its provisions,
made it illegal to intentionally intercept or record
confidential communications by means of a telegraph, telephone
or other device under Penal Code 632. With the advent and
proliferation of cellular and cordless telephones, the
legislature updated CIPA by enacting Penal Code 632.7 which
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applies to mobile phones. Specifically, it ensured that
communications conducted with a cellular device are not
intentionally recorded without consent of the parties. But
unlike Penal Code 632, this section does not distinguish
between confidential and non-confidential calls. As such,
courts have been compelled by the plain language of Penal Code
632.7 to require consent prior to recording any portion of all
calls made to persons on a mobile phone, regardless of whether
confidential information is discussed.
"Unfortunately, this has led to illogical outcomes where calls
to customers are legal if they are on a land line but not if
they're on a mobile phone. We have recently seen a number of
examples of lawsuits filed based on entirely routine and
benign conduct. For example, one class action alleged a
violation of 632.7 based on the recording of a conversation
where the answering party stated that the caller had dialed
the wrong number and the call ends before any recording
disclosure is given. Although the conversation lasted only a
few seconds and contained no confidential or private
information, plaintiffs sought extensive damages under Section
632.7.
"AB 925 seeks to harmonize Penal Code 632 and 632.7 by
creating a very narrow exception for these non-confidential
calls. It only intends to capture the brief non-confidential
communication between a business and a customer prior to
providing the recording disclosure. Practically, this would
include an introductory conversation to identify the parties
and purpose of the call.
"This bill will not remove the CIPA requirement to obtain the
consent of a party prior to recording a confidential
communication. AB 925's limited language cleans up the
arbitrary distinction between land lines and mobile phones for
a very distinct type of call."
2)Creates Inconsistent Definitions of Confidential
Communications: The author argues that this bill corrects an
inconsistency in the law between land lines and mobile phones.
California Penal Code § 632 was passed in 1967. That section
specifies that confidential communications cannot be recorded
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without the consent of both parties to the communication.
Pen. Code, § 632, subd. (c) defines a "confidential
communication" as follows:
The 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
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.
California Penal Code, § 632.7 was passed in 1992 as a
companion piece to the original statute. Penal Code, § 632.7
applies generally to mobile phones, and cordless land lines.
This section does not make a distinction between confidential
or non-confidential communications and merely states that all
communications between persons on these devices may not be
recorded without the consent of both parties to the
communication.
This bill seeks to apply an exception to the prohibition
against eavesdropping in Penal Code, § 632.7 for
communications from businesses to current and former customers
which are "non-confidential." The bill applies a new
definition for content to communications that are
non-confidential in nature. Unlike the Penal Code § 632
definition, the proposed definition is much more specific in
terms of what information is deemed non-confidential. The
bill proposes the following language as non-confidential and
subject to recording without the consent of consumers. The
definition includes communications:
"regarding their business relationship, including, but not
limited to, communications regarding billing, provisioning,
maintaining, or operating the product or service provided
by the person or business."
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The new definition includes quite a wide range of
communications that would likely be deemed confidential under
the existing definition as applied to wired telephones under
the 1967 definition. Specifically, communications regarding
billing information would likely contain information related
to account balances, personal information, social security
numbers, account histories, and credit report information.
Additionally information regarding "provisioning, maintaining,
and operating" could easily contain information such as the
health history or customers if they are speaking with their
health insurance provider. The author and proponents have
argued that the new proposed definition is narrowly tailored,
however they specifically say that the non-confidential
communication "includes" but is "not limited to" the specific
examples they provide.
3)Wireless Land Lines: This bill seeks to amend California
Penal Code § 632.7. Pen. Code, § 632.7 not only covers
mobile telephones, but it also covers all wireless telephones,
including those that are connected to a land line.
4)Possible One-Way Application: The opponents of the proposed
legislation argue that this bill is applied in a one-way
fashion. The exception to the eavesdropping requirement would
apply to a person or business who is contacting a current or
former customer. However, the current or former customer
would still be subject to criminal penalties for recording
conversations with the business without the consent of both
parties. Opponents have argued that businesses will be in
possession of all recordings and that many businesses have
selectively released recordings in the past that assist them
in litigation, but withhold recordings of customers that would
further the consumer's arguments. The language of the
legislation is vague on this issue, and if it is not the
author's intent that the bill only apply in a one-way manner
then additional clarifying language should be added.
5)Argument in Support: According to TechAmerica, "Originally
enacted in 1967, the [California Invasion of Privacy Act
(CIPA)] made it illegal to intentionally intercept or record
confidential communications by means of a telegraph,
telephone, or other device under Penal Code 632. However,
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with the advent and proliferation of cellular telephones, the
legislature attempted to update the CIPA by enacting Penal
code 632.7 which applies specifically to mobile phones.
Unfortunately, while mobile devices were added to the Penal
Code to ensure that communications conducted with a cellular
telephone were applied similarly to landlines, code section
632.7 failed to distinguish between confidential and
non-confidential calls. As such, courts have been compelled
by the plain language of Penal Code 632.7 to require consent
prior to recording "any" portion of "all" calls made to
persons on a mobile phone, regardless of whether confidential
information is discussed.
"As a result, this distinction has led to a number of lawsuits
based on whether an innocuous business service call is placed
to a customer on a landline or a mobile phone. AB 925 seeks
to harmonize Penal Code 632 and 632.7 by creating a very
narrow exception for non-confidential communication between a
business and a customer prior to providing the recording
disclosure. This bill will not remove the CIPA requirement to
obtain the consent of a party prior to recording a
confidential communication."
6)Argument in Opposition: According to the Consumer Attorneys
of California, "AB 925 would reverse long standing privacy
protection law to allow businesses and individuals to secretly
record phone conversations with current or former customers
without their knowledge or consent.
"AB 925 robs California citizens of the important right to
know when someone records their telephone calls. This bill
extinguishes what Assemblyman Jesse M. Unruh advocated for
decades ago: all party consent in California. In 1967, the
California Legislature enacted a broad, protective
invasion-of-privacy statute in response to what it viewed as a
serious and increasing threat to the confidentiality of
private communications resulting from then recent advances in
science and technology that had led to the development of new
devices and techniques for eavesdropping upon and recording
such private communications. (Stats.1967, ch. 1509, § 1, pp.
3584-3588, enacting Pen.Code, §§ 630-637.2). In 1992, AB 2465
(Connelly) added § 632.7 to the penal code to expand these
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privacy protections to include cellular telephones. This
legislative intent is even more applicable in today's world as
privacy and information protections are of the highest concern
to consumers.
"This bill contradicts well-established, decades old law that
has been unanimously affirmed by the California Supreme Court.
Current law requires that all parties to a phone conversation
consent to the recording of the conversation. Penal Code §
632.7. This is commonly referred to as "two-party consent."
The "California Supreme Court unanimously held:
"We believe that California must be viewed as having a
strong and continuing interest in the full and vigorous
application of the provisions of Section 632 prohibiting
the recording of telephone conversations without the
knowledge or consent of all parties to the conversation."
Kearney v. Salomon Smith Barney, Inc. 39 Cal.4th 95, 125
(2006).
"Under Penal Code § 632.7, conversations can be recorded;
however, a party cannot secretly record the conversation
without first informing all parties that the conversation is
being recorded so a person has the opportunity to end the call
and avoid invasion of privacy. Businesses currently comply by
simply announcing at the beginning of the call, "this call may
be recorded." This routine announcement is sufficient to
establish notice and consent for the recording or monitoring
of the conversation.
"AB 925 will allow businesses to secretly record telephone
calls and selectively use these recordings when it benefits
their business, not the consumer. In 2006, California Supreme
Court discussed this very issue in Kearney.
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"Companies may utilize such undisclosed recording to
further their economic interests-perhaps in selectively
disclosing recordings when disclosure serves the company's
interest, but not volunteering the recordings' existence
(or quickly destroying them) when they would be detrimental
to the company." Id. at 124.
"For example, if a hotel and its guest dispute the room price
or other terms of a reservation and the customer's
recollection is correct, the business could decide not to
produce the recording and the customer would not object since
the customer has no knowledge that the conversation was ever
recorded. On the other hand, if the business's recollection is
correct, it could produce produce the recording since it now
benefits the company's financial interest.
"Lenders and debt collection companies have the most to gain
as AB 925 will allow them to legally record calls, without
consent, to hold customers to "their word" when it benefits
them. These companies have been the subject of much of the
litigation in this area. Most if not all of these calls
involved personal and confidential financial information. Many
debt collection companies have engaged in such practices, and
under current law customers whose calls are recorded without
their consent have a right bring suit. AB 925 would
effectively legalize this practice leaving consumers no remedy
for this invasion of privacy and at risk for additional harm
that may follow.
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"Without informing consumers that their conversation is
recorded, consumers are left in the dark as to what personal,
private information is collected or how it is used. They have
no knowledge that their transactional details are being
recorded, which can and often does include private financial,
personal, and sometimes even HIPPA protected medical
information. For example, 1-800 Contacts illegally recorded,
without notification or warning, their customer's confidential
medical, financial, billing, and address information. Anyone
who accessed this information would be able to access the
customer's medical record. In another similar case, the
plaintiff discussed his erectile dysfunction with Humana and
they secretly recorded the call without his consent. The
court found that "defendant's line of business and the
sensitive medical information that is likely to be discussed
between Defendant's representatives and its customers"
supported plaintiff's claim. Perea v. Humana Pharmacy, Case
No. 12-1881-JST (ANx) (C.D. Cal. 2013). Under AB 925, this
practice would be legalized without any knowledge of the
consumer.
"Under AB 925, not only would consumers be unaware that the
call is being recorded, but they also have no way of knowing
who would have access to their information. Although
consumers may believe that they are dealing with a business in
California, many businesses now outsource customer service
functions to third-party call centers that may be located
elsewhere in the United States or in other countries. Not only
will customers unknowingly allow their credit card or other
personal information to be recorded by the company they are
doing business with, they may also be giving their information
to an unknown outsourced third-party."
7)Prior Legislation: AB 2465 (Connelly), Statutes of 1992,
Chapter 298, created Pen. Code, § 637.2 which prohibited the
recording of communications on wireless telephones and mobile
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phones as specified.
REGISTERED SUPPORT / OPPOSITION:
Support
California Chamber of Commerce
TechAmerica
Opposition
American Civil Liberties Union
California Advocates for Nursing Home Reform
California Alliance for Retired Americans
California Competes
California Federation of Teachers
California Nurses Association
California Rural Legal Assistance Foundation
Communication Workers of America, AFL-CIO District 9
Consumer Action
Consumer Attorneys of California
Consumer Federation of California
Consumer Watchdog
Consumers for Auto Reliability and Safety
Consumers Union
Courage Campaign
Elder Financial Protection Network
Electronic Frontier Foundation
Older Women's League
Privacy Rights Clearinghouse
Public Advocates Inc.
United Fruit and Commercial Workers
University of San Diego Center for Public Interest Law
Utility Reform Network
World Privacy Forum
Analysis Prepared
by: Gabriel Caswell / PUB. S. / (916) 319-3744
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