DOLLY M. GEE, United States District Judge.
The matter before the Court is Defendant Quicken Loans Inc.' motion for summary
Having duly considered the parties' written submissions and oral argument, the Court now renders its decision.
The Court sets forth the uncontroverted material facts below, and views all reasonable inferences to be drawn from them in the light most favorable to Maghen, the non-moving party.
On February 4, 2014, Maghen submitted an online form to Lending Tree LLC requesting information about refinancing a property. (See Declaration of Katherine Baird ("Baird Decl.") ¶¶ 2-3 [Doc # 35-1]; Declaration of James Snell ("Snell Decl.") ¶ 4, Ex. 3 (Maghen Depo. at 10:21-11:9) [Doc # 35-17].) This online submission required Maghen to agree to Lending Tree's Terms of Use. (See Baird Decl. ¶ 3.) The Terms of Use state, in relevant part:
(See Baird Decl. ¶ 3, Exh. 2 ("Lending Tree's Terms of Use") at 5 [Doc. # 35-3] (emphasis added).) It is undisputed that Maghen agreed to these terms. (See Plaintiff's Statement of Genuine Dispute ("P's SGD") ¶ 1.)
In response to Maghen's request for refinancing information, Quicken, a Lending Tree network provider, sent an email to the email address Maghen provided shortly before it called him. (See Declaration of Kevin Lang ("Lang Decl.") ¶ 5.) The email contained a disclosure that Maghen's calls with Quicken would be recorded. (See Lang Decl. ¶ 5, Exh. 3 ("Email from Quicken to Maghen") ("To ensure we give you the best client service, we record and monitor your communications with us. This includes communications made by telephone, e-mail, chat, our website, etc.") (emphasis added).)
Quicken's representative John Siira
(See Snell Decl. ¶ 3, Exh. 2 (Transcript at 2:8-14, 3:8-18) (emphasis added) [Doc. # 35-16].) At his deposition, Maghen confirmed he understood this meant that Quicken recorded its calls for quality assurance. (See Snell Decl. ¶ 4, Exh. 3 (Maghen Depo. at 21:7-12).)
Right after Maghen said, "Okay," the call was disconnected, but the parties were reconnected somewhere between seconds and a "couple [of] minutes" after the interruption in service. (See Snell Decl. ¶ 4, Exh. 3 (Maghen Depo. at 23:13).) After the call disconnected, Siira called Maghen again. (See Snell Decl. ¶ 3, Exh. 2 (Transcript at 3:20-24).) Siira did not inform Maghen again that the call would be recorded. (See Snell Decl. ¶ 3, Exh. 2 (Transcript at 3-4).) In the course of the call, Siira transferred the call to Kevin Lambard, a specialist in California refinancing. (See Snell Decl. ¶ 3, Exh. 2 (Transcript at 4:6-9).) Lambard also confirmed he worked for Quicken. (See Snell Decl. ¶ 3, Exh. 2 (Transcript at 4:13-14).) Siira then disconnected from the call, and Maghen began discussing his property with Lambard. (See Snell Decl. ¶ 3, Exh. 2 (Transcript at 8:14-9:13).)
After discussing the details of the proposed refinance for an indeterminate amount of time, Maghen asked whether the calls with Lambard were being recorded. (See Snell Decl. ¶ 3, Exh. 2 (Transcript at 9:14-17).) When Lambard confirmed that the calls were recorded, Maghen stated, "I'm just not comfortable in moving forward," and terminated the call. (See Snell Decl. ¶ 3, Exh. 2 (Transcript at 10:3-9).)
On May 19, 2014, Maghen filed a class action lawsuit against Quicken for damages and injunctive relief under Cal.Penal Code § 632.7. [Doc. # 1.]
Summary judgment should be granted "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a); accord Wash. Mut. Inc. v. United States, 636 F.3d 1207, 1216 (9th Cir.2011). Material facts are those that may affect the outcome of the case. Nat'l Ass'n of Optometrists & Opticians v. Harris, 682 F.3d 1144, 1147 (9th Cir.2012) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986)). A dispute is genuine "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson, 477 U.S. at 248, 106 S.Ct. 2505.
The moving party bears the initial burden of establishing the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). Once the moving party has met its initial burden, Rule 56(c)
Quicken moves for summary judgment on Maghen's claim on the grounds that (1) Maghen consented to the call and (2) Quicken's service-observing recordings are exempt from the statute at issue, Cal.Penal Code § 632.7. Section 632.7 states, in relevant part:
Cal.Penal Code § 632.7(a) (emphasis added). As such, consent is a complete defense to a Section 632.7 claim.
Here, Maghen consented to the recording of his calls. Specifically, Maghen consented to the recordings by (1) agreeing to the Terms of Use on Lending Tree's website when he requested information about refinancing; and (2) agreeing at the outset of the call that the call could be recorded for quality control purposes.
With respect to Maghen's agreement to Lending Tree's Terms of Use, Maghen does not dispute that he agreed to these terms.
Even if a verbal warning at the outset of the call were required, however, the uncontroverted facts show that Quicken provided such a warning and gained Maghen's consent to the recording. Maghen argues, without citing to any authority, that Quicken failed to provide a warning "at the outset" of the call because Siira did not provide a warning again upon reconnecting with Maghen after their call was inexplicably disconnected. (See Opp'n at 5.) A business satisfies Section 632.7, however, by warning a party at the outset of a "conversation." Kearney, 39 Cal.4th at 118, 45 Cal.Rptr.3d 730, 137 P.3d 914. Here, the brief time it took to reconnect after the call was disconnected strongly militates in favor of viewing the entirety of the party's exchanges in this case as one "conversation" despite the momentary interruption in telephone service. Moreover, Maghen's argument is particularly unavailing in light of the fact that Lending Tree, in its Terms of Use Agreement, and Quicken, in its email to Maghen just prior to the call, had warned Maghen that all of his calls with Quicken would be recorded. Given those repeated warnings and Maghen's express consent at the outset of the first call, a reasonable factfinder could not find that Quicken failed to obtain consent to record the conversation simply because the parties were briefly disconnected.
The same reasoning is applicable to Maghen's argument that the transfer of the call to another one of Quicken's specialists negated his consent. Both of the individuals Maghen spoke with identified themselves as Quicken Loans employees, and Maghen received notification at the outset of the conversation that Quicken was recording before the call was transferred internally. Any expectation that the call would not be recorded because the call was transferred to a different Quicken Loans employee is unreasonable. Nor can Maghen's belated change of heart, if it can be characterized as such,
In sum, it is uncontroverted that Maghen consented to the recording of the call when he agreed to Lending Tree's Terms of Use Agreement and when he said "Okay" in response to Quicken's explanation that the call would be recorded at the outset of the conversation. Thus, Quicken did not violate Section 632.7. Because the motion can be resolved on this basis, the Court need not reach Quicken's argument that summary judgment should be granted on Maghen's claim because its "service-observing calls" are exempt from CIPA.
Quicken also seeks summary judgment on its counterclaim for declaratory relief on the grounds that Maghen consented to the call and its "service-observing calls" are exempt from CIPA. As the Court has already granted Quicken's motion for summary judgment on the complaint because Maghen gave his consent to the call from Quicken, it need not address that aspect of Quicken's motion on the counterclaim. Instead, the Court will focus here on the service-observing aspect of the motion.
Quicken bases its request for declaratory relief on Section 632.7(b)(2), which states that the section does not apply to "[t]he use of any instrument, equipment, facility, or service furnished and used pursuant to the tariffs of the public utility." Quicken relies on CIPA's legislative history to demonstrate that the California legislature intended to exempt all "service-observing" telephonic recordings under CIPA. Specifically, Quicken points to a statement made by Jesse Unruh, the author of CIPA, explaining that "telephone subscribers are excluded from coverage with respect to their use of `service-observing equipment,' but only with approval of the Public Utilities Commission." (See RJN, Exh. 2, at 15.) Quicken contends that the exception as worded made sense in 1967, at a time when companies obtained recording equipment from a public utility phone company, but cheap recording technology, available from private parties, has now created a "latent ambiguity" in CIPA. As such, Quicken asserts that all "service-observing" recordings are exempt under CIPA.
"A latent ambiguity exists where some extrinsic evidence creates a necessity for interpretation or a choice among two or more possible meanings." Coburn v. Sievert, 133 Cal.App.4th 1483, 1495, 35 Cal.Rptr.3d 596, 603 (2005) (emphasis in original). Such a necessity exists where a literal construction would frustrate rather than promote the purpose of the statute or would produce absurd consequences. Id. Quicken contends that "latent ambiguity" means that, even when the language is unambiguous, one can look to legislative history to introduce the ambiguity. But the cases that Quicken cites do not stand for that proposition. In Coburn, for example, the parties had already posited two competing explanations of the phrase "the provisions of Section 5152" in the statute. Id. at 1498, 35 Cal.Rptr.3d 596, 603. The court subsequently looked first to the plain meaning of "provisions" for guidance and then to legislative history when the plain meaning of "provisions" did not aid in interpretation. Id. at 1499, 35 Cal.Rptr.3d 596, 603. Similarly, in Mosk v. Superior Court, the parties disagreed on whether the words "providing for confidentiality" merely delegated to the Judicial Council the power to establish rules for confidentiality of proceedings or allowed for the Judicial Council also to exercise its discretion to provide exceptions to the confidentiality of proceedings. 25 Cal.3d 474, 494, 159 Cal.Rptr. 494, 601 P.2d 1030 (1979). The "latent ambiguity" in the provision thus identified, the court then turned to legislative history to help interpret the provision. Id. at 495, 159 Cal.Rptr. 494, 601 P.2d 1030. In McVeigh v. Does 1 through 3, the court cites to legislative history only to bolster its finding that it need not disregard the words of the statute to advance the purposes of the statute.
Quicken has failed to identify any ambiguity in the plain text of Section 632.7(b)(2) that would make recourse to legislative history proper. See NEI Contracting & Eng'g, Inc. v. Hanson Aggregates Pac. Sw., Inc., No. 3:12-CV-01685-BAS, 2015 WL 1346110, at *5 (S.D.Cal. Mar. 24, 2015) (finding that Section 632.7 is unambiguous and that it does not contain a broad exception for service monitoring) (collecting cases); cf. Satterfield v. Simon & Schuster, Inc., 569 F.3d 946, 951 (9th Cir.2009) (in the context of construing the Telephone Consumer Protection Act, the court noted that "The preeminent canon of statutory interpretation requires us to presume that [the] legislature says in a statute what it means and means in a statute what it says there. Thus, our inquiry begins with the statutory text, and ends there as well if the text is unambiguous.") (internal quotation marks omitted).
Moreover, courts have expressly rejected the argument that a "servicingobserving" exception exists within the plain language of CIPA. See Kight v. CashCall, Inc., 200 Cal.App.4th 1377, 1391, 133 Cal.Rptr.3d 450, 458 (2011) ("[CIPA] contains no exceptions applicable when a business monitors a telephone conversation even if the monitoring is for a legitimate business purpose."); see also Ades v. Omni Hotels Mgmt. Corp., 46 F.Supp.3d 999, 1008 (C.D.Cal. Sept. 8, 2014) (finding that Section 632.7 unambiguously "does not contain a broad exception for routine service monitoring"); Zephyr v. Saxon Mortg. Serv's, Inc., 873 F.Supp.2d 1223, 1231 (E.D.Cal.2012) (explaining a "business telephone monitoring" exception would be contrary to the express language of Sections 632 and 632.7); NEI Contracting, 2015 WL 1346110, at *6 (declining to read a "service observing" exemption into Section 632.7); Bales v. Sierra Trading Post, No. 13-cv-1894, 2013 WL 6244529, at *4 (S.D.Cal. Dec. 3, 2013) (declining to read a "service observing" exception into Section 632 for quality assurance purposes).
Quicken cites to the dissenting opinion in Young v. Hilton Worldwide, Inc., 565 Fed.Appx. 595, 597 (9th Cir.2014), in support of its contention that "[t]he legislative history of this exception shows that its intended effect was to exclude so-called `service-observing' calls from the coverage of CIPA." The court in Ades, however considered and expressly disapproved this dissent, noting that, "[a]lthough supportive of [the defendant's] position, this dissenting opinion . . . does not persuade the Court to ignore the weight of authority on this point." 46 F.Supp.3d at 1007. Given the absence of ambiguity in the plain language of the statute and the weight of the case authority contrary to Quicken's position, this Court also declines to read a "service-observing" exception into Section 632.7. The more appropriate recourse for Quicken would be to seek clarifying language from the California legislature.
Accordingly, Quicken's motion for summary judgment as to its counterclaim on the issue of consent is GRANTED. The motion is DENIED to the extent it relies
In light of the foregoing, Quicken's motion for summary judgment is