California Penal Code section 632.7 imposes criminal liability and, pursuant to Penal Code section 637.2, civil liability upon persons who intercept or receive a communication involving a cellular or cordless telephone and record the communication without consent. The section and its sister provision, Penal Code section 632, are popular among class action plaintiffs in California as a means to challenge the business practice of recording customer service calls.
The appeal of section 632.7 to plaintiffs is that it may not require the subject communication be confidential, unlike section 632. The question is raised, though, if section 632.7 even applies to the parties to a cellular or cordless telephone call. Subsection (a) of the provision states, in part:
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  or by imprisonment in a county jail .
The provision can plausibly be read to mean that only third parties who intercept or receive a call involving others are subject to the law and that the law does not apply to the parties to the call.
Unfortunately for defendants, the courts that have addressed the issue have ruled section 632.7 does apply to the call’s participants. See, e.g.¸ Simpson v. Vantage Hospitality Group, Inc., No. 12-cv-04814-YGR, 2012 WL 6025772, at *5-6 (N.D. Cal. Dec. 04, 2012); Simpson v. Best Western Intern., Inc., No. 3:12–cv–04672–JCS, 2012 WL 5499928, at *6-9 (N.D. Cal. Nov. 13, 2012); Brown v. Defender Sec. Co., No. CV 12-7319-CAS PJWX, 2012 WL 5308964, at *4-5 (C.D. Cal. Oct. 22, 2012). The courts found that the term “receives” in the section shows the provision’s applicability to call participants under the reasoning that during a call the participants “receive” communications from each other. See, e.g., Best Western, 2012 WL 5499928 at *7-9 (so holding, though recognizing the plausibility that “receives” refers third parties who inadvertently receive communications by happenstance).
But, the federal district court decisions are not binding, and no published California appellate decision has held that section 632.7 applies to the parties to the communication. Thus, it is still an arguable question in California whether the section applies to the communication’s participants. The legislative history of the provision suggests it does not.
The Legislative History of Penal Code Section 632.7
The primary concern of the provision’s sponsors was the threat posed to the privacy of communications that travelled over the “airwaves” when either a cellular or cordless telephone was used. The fear being that technological advances allowed such communications to be intercepted by third parties. The sponsors felt that innocent interception or reception of a communication travelling over the air should not be punished, but that intentionally recording an intercepted or received call improperly intruded on privacy. It was believed that Penal Code sections 632.5 and 632.6, which respectively prohibit maliciously eavesdropping on telephone communications over cellular and cordless telephones, did not address calls intercepted without malice but which were recorded.
The intent of section 632.7 was thus to punish third parties who receive or intercept a call between other parties and record the call. The author of the law, in explaining its purpose, wrote that there is a lower expectation of privacy for cellular and cordless communications travelling over the air, but that “this does not mean that persons who use cellular or cordless telephones may reasonably anticipate that their conversations will be both intercepted and recorded.” Author Lloyd G. Connelly’s Statement of Intent, Assem. Bill No. 2465 (1992), p. 1. (Emphasis original.) He further explained:
While there may be utility in retaining relatively unimpeded access to the public ‘air waves,’ there is no value in permitting private telephone conversations that employ the ‘air waves’ to be indiscriminately record[ed]. AB 2465 strikes the appropriate balance. The innocent, merely curious, or non-malicious interception of cellular or cordless telephone conversation will remain legal. However, it will be illegal to record the same conversations. Id. (Emphasis added.)
That the section is intended to punish only the conduct of strangers to the call is further supported by then Sacramento County District Attorney Steven White who proposed to Connelly legislation in this area. White advocated that the new statute was needed to “criminalize the recording of an intercepted cordless or cellular phone call.” Letter to Assembly members Phil Isenberg and Lloyd Connelly (Nov. 5, 1991), p. 2. He was motivated by a publicized incident in which a third party intercepted and recorded a conversation between two businessmen discussing a deal involving a third businessman. Id.
Other contemporaneous pieces of the legislative history further suggest the provision was meant to apply only to calls that were both eavesdropped upon and recorded. The Department of Finance summarized the bill as creating a new crime for the “willful interception and recording of virtually all types of transmitted communications between cellular telephones, cordless telephones, cellular and cordless telephones, cellular and landline telephones, and cordless and landline telephones.” Dept. of Finance, Analysis of Assem. Bill No. 2465 (June 1, 1992), p. 1. (Emphasis added.) The Senate Judiciary Committee in explaining the legal landscape at the time wrote “there is currently no statute prohibiting a person from intercepting and intentionally recording a communication transmitted via cellular or cordless telephones.” Sen. Judiciary Com., Analysis of Assem. Bill No. 2465 (1991–1992 Reg. Sess.), p. 2. (Emphasis added.) Assemblyman Connelly’s press release announcing the introduction of the legislation characterized it as “legislation to outlaw the intentional eavesdropping and recording of cellular and cordless telephone conversations.” Author Lloyd G. Connelly’s Press Release (February 4, 1992), p. 1. (Emphasis added.) But see Flanagan v. Flanagan, 27 Cal.4th 766, 771 n. 2 (2002) (stating in dictum and without analysis of the legislative history or otherwise that section 632.7 “prohibits intentionally intercepting or recording communications involving cellular telephones and cordless telephones”).
Absent from the legislative history is an intent to regulate the conduct of the parties to the communication. Indeed, the Legislature does not appear to have even considered the circumstance where a party to a communication records the communication. Rather, the overwhelming focus of the legislative history is on third parties who intentionally or by accident receive a call between two other parties.
Based on the Legislative History, Penal Code Section 632.7 Should Not Apply to the Parties to a Communication
In light of the legislative history, the term “receives” in section 632.7 is best read as not encompassing an intended recipient of a communication (i.e., a party to the call), but rather as referring to third parties who incidentally receive telecommunication signals, such as through the use of scanning equipment or other technology. If the term “receives” were meant to include anyone who hears a communication including the participants to the call, then the term “intercepts” in the section becomes unnecessary. One who “intercepts” a communication necessarily “receives” it as well. A stronger interpretation that reconciles the legislative history with the terms of the provision and avoids superfluity is one that recognizes the term “intercepts” to be a signal of the law’s intent to regulate third party eavesdroppers. Under this view, the language of the section comprises a cogent whole where “intercepts” refers to intentional eavesdroppers and “receives” refers to accidental eavesdroppers.
Finally, the inclusion of facsimile transmissions among the communications subject to the law (Penal Code § 632.7(c)(3)), would be odd if the law is intended to apply to the parties to a communication. A facsimile transmission necessarily results in a recording of the communication. Under an interpretation where the section applies to the parties to the communication, any fax would subject the recipient, if not both the recipient and the sender, to liability. This unreasonable result dissipates, however, if the law is understood as penalizing only those who intercept a communication between others.
Ultimately, though some case law may be to the contrary, the legislative history of section 632.7 provides a good faith basis to argue that the section does not apply to the parties to the telephonic communication. Of course, businesses are best served by not getting entangled in the statute in the first place. The author would be happy to discuss steps businesses can take to try to avoid suit under sections 632.7 or 632 offline.