The California Supreme Court decided yesterday that California’s strong privacy law and statutes against the recording or monitoring of telephone calls without the consent of all parties to a call, prohibit even the out-of-state recording of calls between Californians and parties from other states which allow call recording.  In a case reported in Cooper, White & Cooper LLP’s client memorandums at earlier stages, the Supreme Court ruled that stock brokerage Salomon Smith Barney is prohibited by California law from recording calls out-of-state between its brokers and California customers, even where securities industry regulations require such broker-customer calls to be recorded, unless the brokerage follows the advance steps of an announcement or beep tone needed to obtain customer consent to recording for each call.  The state Supreme Court concluded that even under an interstate choice-of-law analysis, California’s strong privacy interest as provided in the state Constitution absolutely prohibits any recording of telephone calls where even one of the parties is in California, unless consent is obtained as provided by statute.  Although unconsented recording is made a criminal offense under the state Penal Code (Sec. 631-632), the Supreme Court’s decision came in a civil case and the court’s only gesture to flexibility is that while the defendant will be enjoined from violation of the recording prohibition, it will not be liable for damages for its conduct prior to the Court’s newly announced rule.  (Kearney v. Salomon Smith Barney, California Supreme Court No. S124739, July 13, 2005)  For a guide to California recording and monitoring law and consent procedures, see “Telephone Monitoring” by your editors, as published in California Business Law Practitioner, Spring 1990, a publication of the California Continuing Education of the Bar, copies available upon request.

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