In a class action brought under a California penal statute that prohibits the intentional recording of telephone calls without the consent of all parties on the call, a California district court denied class certification on the grounds that common questions of fact do not predominate among the putative class members.

Defendant, a construction materials supplier, received orders from its customers through a dedicated phone line.  Prior to 2009, defendant utilized a beep tone generator, which produced periodic beeps to advise the customers that they were being recorded.  In 2009, defendant switched to a pre-recorded verbal announcement which notified the customers that their calls “may be monitored for quality assurance purposes.”  In 2013, defendant updated the verbal admonition to state that the calls “may be monitored or recorded.”  Plaintiff claimed that from 2009 to 2013, defendant recorded over 210,000 calls from putative class members made from more than 12,000 unique cell phone numbers.  Plaintiff sought class certification under Rule 23(b)(3), which requires proof that common question of law or fact predominate.

Defendant argued that individual rather than common issues would predominate because determining whether each caller consented to the recording would require inquiries into the following questions: (a) the length and breadth of the caller’s relationship with defendant; (b) whether and how many times the caller heard the pre-2009 beep tone warning; (c) whether and how many times the caller heard defendant’s verbal admonition; (d) whether the caller understood the verbal admonition to include recording; (e) whether the caller had actual knowledge that its calls were being recorded.

The court agreed and concluded that based on the circumstances of the case, individual inquiries will be required to ascertain whether each putative class member provided consent, thus negating certification under Rule 23(b). The court discussed and agreed with two similar cases, also arising out of recorded conversations, in which class certification was denied – Torres v. Nutrisystem and Kight v. CashCall.  The court distinguished the case of Ades & Woolery v. Omni Hotels Mgmt., Corp., also involving recorded conversations, in which certification was granted.  The key difference, according to the court, is that consent in Ades was a non-issue because no warning to callers that their call would be recorded was ever given either before or during the class period.  The Ades court found that without a warning, consent to being recorded or the foreseeability of being recorded could not be inferred.

Not so in this case. Defendant was able to produce two customers who, between them, placed 1,400 calls during the class period and who had actual knowledge that their calls were being recorded after defendant switched to the verbal warning. This evidence reinforced the court’s conclusion that individual, rather than common, questions predominate on the threshold issue of consent.

NEI Contracting and Engineering, Inc. v. Hanson Aggregates Pacific Southwest, Inc., Civ. No. 12-cv-01685 (S.D. Ca. Mar. 24, 2015).