Smith v. LoanMe, Inc.
Annotate this CaseJeremiah Smith filed a class action complaint against LoanMe, Inc., alleging that LoanMe violated the California Invasion of Privacy Act. Smith alleged that LoanMe violated Penal Code section 632.7 by recording a phone call with Smith without his consent while he was using a cordless telephone, and he claimed that a “beep tone” at the beginning of the call did not constitute sufficient notice that LoanMe was recording the call. In a bifurcated trial about the beep tone issue, the trial court concluded that: (1) the beep tone provided sufficient notice to Smith that the call was being recorded; and (2) Smith implicitly consented to being recorded by remaining on the call. The Court of Appeal concluded section 632.7 prohibited only third party eavesdroppers from intentionally recording telephonic communications involving at least one cellular or cordless telephone. Conversely, section 632.7 did not prohibit the participants in a phone call from intentionally recording it. Consequently, Smith failed to state a claim against LoanMe under section 632.7. The Court therefore affirmed dismissal of Smith’s lawsuit.
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