In Smith v. Loanme, Inc., No. S260391, 2021 Cal. LEXIS 2248, at *2-3 (Apr. 1, 2021), the California Supreme Court found that Penal Code 632.7 requires two-party consent. The summary is below:
Under Penal Code section 632.7, subdivision (a) (hereinafter section 632.7(a)), it is a crime when a person “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” a cellular or cordless telephone and another telephone. A violation of section 632.7 also can be pursued civilly and lead to the assessment of damages and other appropriate relief. The issue presented in this case is whether section 632.7 applies to the parties to a communication, prohibiting them from recording a covered communication without the consent of all participants, or whether the section is concerned only with recording by persons other than parties (sometimes hereinafter referred to as “nonparties” to the communication), such as an individual who covertly intercepts a phone call and eavesdrops upon it. The Court of Appeal concluded that section 632.7 applies only to nonparties and does not forbid a party to a phone call transmitted to or from a cellular or cordless telephone from recording the conversation without the consent of the other party or parties. We reach a contrary conclusion and hold that section 632.7 applies to parties as well as nonparties. This interpretation reflects the most sensible reading of the statutory text, is consistent with the relevant legislative history, and advances the Legislature’s apparent intent by protecting privacy in covered communications to a greater degree than the Court of Appeal’s construction would. Accordingly, we reverse the judgment below and remand the matter to the Court of Appeal for further proceedings consistent with our opinion.
The Supreme Court concluded
We conclude that section 632.7 prohibits parties as well as nonparties from intentionally recording a communication transmitted between a cellular or cordless phone and another device without the consent of all parties to the communication. The Court of Appeal did not address LoanMe’s additional contentions that its activation of a beep tone gave Smith notice that their conversation was being recorded, and that by remaining on the call, Smith consented to having the call recorded. We reverse the judgment of the Court of Appeal and remand the cause to that court for further proceedings consistent with our opinion, including consideration of these arguments as may be appropriate.