As reported in BNA’s Privacy Law Watch, on April 27, 2012, the United States District Court for the Central District of California ruled that the California Invasion of Privacy Act, which prohibits the interception or monitoring of an electronic communication absent the consent of all parties to the communication, is not preempted by the federal Wiretap Act, which requires the consent of only one party to the communication. In Leong v. Carrier IQ Inc., No. 2:12-cv-01562 (C.D. Cal. Apr. 27, 2012), the multidistrict litigation centers on software developed by Carrier IQ that allegedly is “installed on cell phones and surreptitiously records the user’s keystrokes, text messages and passwords without the user’s knowledge or consent.”

The decision is consistent with the California Supreme Court’s decision in Kearney v. Salomon Smith Barney, Inc., 39 Ca. 4th 95 (2006), and several other district court decisions, but it is at odds with some other decisions that found the Wiretap Act preempted state law. The preemption issue is thus not fully resolved in California. In the meantime, the Carrier IQ case has been remanded to state court, where the plaintiffs will have the advantage of applying the more stringent state law consent standard. The decision is a reminder that businesses implementing electronic monitoring or surveillance – whether through cutting-edge mobile technology or more mundane employee monitoring software – must consider not only the federal Wiretap Act standard, but also the more restrictive state requirements.