YES California's CIPA protects out of California plaintiffs!

California has a strict invasion of privacy law commonly known as CIPA. It provides a statutory award of $5,000 for recording a call without permission.

But who exactly can pursue a claim under it for calls recorded without permission? It is only for individuals who where inside of California at the time the call was recorded, or does it apply to folks outside of California when a California resident was recording without permission?

This is a question in telemarketing lawsuit Hadizadeh Moghadam v. Alleviate Tax LLC 8:24-cv-01810-MWC-DFM..

Farbod Hadizadeh Moghadam, a TCPA plaintiff, has alleged that the defendant and California resident Alleviate Tax of illegally recording the unwanted calls that led Farbod to sue in the first place.

But Farbod is a New Jersey resident, so Alleviate Tax alleges CIPA isn't applicable and they have moved to dismiss the claim. "Alleviate moves to dismiss Moghadam’s CIPA claim—arguing that Moghadam cannot allege a claim because he is not protected by CIPA as a non-California resident."

MOGHADAM v ALLEVIATE TAX - CIPA.pdf

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In great news, Farbod made some compelling arguments and the federal court judge ruled that CIPA does apply to out of state plaintiffs.

Moghadam contends that CIPA does indeed protect him. MTD Opp. 4:5–7:12. The Court agrees with Moghadam. Alleviate relies on Kearney v. Salomon Smith Barney, Inc. for the proposition that CIPA’s legislative purpose is “to protect the right of privacy of the people of this state.” 39 Cal. 4th 95, 119–20 (2006) (quoting note that Cal. Penal Code § 630). Notably, Kearney did not address the question at hand: whether a California defendant could be liable to non-California plaintiffs under the statute. See Valentine v. NebuAd, Inc., 804 F. Supp. 2d 1022, 1027 (N.D. Cal. 2011). CIPA does not definitively limit liability of California plaintiffs. See, e.g., Cal. Penal Code § 637.2 (“Any person who has been injured by a violation of [CIPA] may bring an action against the person who committed the violation[.]”) (emphasis added). “California recognizes that ‘with respect to regulating or affecting conduct within its borders, the place of the wrong has the predominant interest.’” Mazza v. Am. Honda Motor Co., 666 F.3d 581, 593 (9th Cir. 2012) (internal citations omitted), overruled on other grounds by Olean Wholesale Grocery Coop., Inc. v. Bumble Bee Foods LLC, 31 F.4th 651 (9th Cir. 2022). Indeed, “[a] legislative purpose that articulates an interest in protecting those within California is not inconsistent with also allowing non-Californians to pursue claims against California residents,” and to hold otherwise “would mean the California Legislature intended to allow California residents to violate the CIPA and the CCCL with impunity with respect to out-of-state individuals and entities.” Valentine, 804 F. Supp. 2d at 1028. Alleviate acknowledges that courts have broadened the scope of CIPA to allow non-California residents to assert claims under the statute but that the alleged violation must have occurred within California. Reply 3:16–4:3; see Valentine, 804 F. Supp. 2d at 1026 (holding that plaintiffs were permitted to maintain their CIPA claims “because the relevant conduct occurred in California”); Carrese v. Yes Online Inc., No. CV 16-05301 SJO (AFMx), 2016 WL 6069198, at *5 (C.D. Cal. Oct. 13, 2016) (holding plaintiff, who was a Florida resident “ha[ve] statutory standing to bring her CIPA claims to the extent the relevant conduct (the alleged recordings) took place in California”) (emphasis added)). Here, the operative complaint identifies Alleviate as a company formed under California, with its principal place and address in California, that conducts business in California. FAC ¶¶ 16–18. Additionally, Moghadam asserts that Alleviate’s representatives called to promote its program—indeed, the number John Tran called Moghadam’s cell phone from includes a 949 area code, located in Orange County, California. Id. ¶¶ 44–67; see Eliman v. Law Office of Weltman, No. 12-cv-01599-DMG (FMOx), 2013 WL 12119720, at *4 (C.D. Cal. Jan. 2, 2013) (taking judicial notice that the area code 310 includes the West Los Angeles area). The Court infers that the unconsented recording took place in California. See Fabricant v. Fast Advance Funding, LLC, No. 2:17-cv-05753-AB (JCx), 2018 WL 6920667, at *3 (C.D. Cal. Apr. 26, 2018) (in a TCPA case, finding plaintiff sufficiently alleged personal jurisdiction where defendant made unsolicited phone calls to plaintiff’s cell phone that had a California area code). Accordingly, the Court DENIES Alleviate’s motion to dismiss.

Moghadam v Alleviate Tax - CIPA Not dismissed.pdf

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There are a few legal implications here. One is that many/most telemarketers are always recording the calls if they announce it or not. It seems to be the default setting on their software. When a California entity is involved in telemarketing, TCPA plaintiffs should see if they can prove illegal recording. The $5,000 per call CIPA statutory damages dwarf TCPA statutory damages at the federal level.

And TCPA violation investigators receiving unwanted calls from California should think about announce the calls are being recorded because many telemarketer are now reflexively retaliating with a countersuits. Something Washington residents already should be mindful of because we are an all-party consent state.

These reflexive counterclaims have typically been for fraud, like this one the defendant Spring EQ LLC just filed against the TCPA plaintiff Robert Mason.

Mason v Spring EQ LLC Answer and counterclaim.pdf

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4. On or around January 24, 2024, Plaintiff, or his designee, visited https://www.lendingtree.com/forms/he/mulberry/he_msg_wlt_city (“LendingTree website”) and gave Spring EQ (among others) prior express consent to call his telephone number, (909) XXX-2070. 5. During Plaintiff’s visit to the LendingTree website, Plaintiff submitted a form requesting information from up to five lenders, including Spring EQ. 6. The disclosure on the LendingTree website clearly states that the consumer “consents” to be called by “up to 5” of LendingTree’s “Network Partners.” 7. At the time Plaintiff accessed the LendingTree website, Spring EQ was listed as a “Network Partner”. 8. Prior to Plaintiff receiving any text messages from Spring EQ, therefore, Plaintiff provided his consent to be contacted and provided his contact information (“opt-in information”), requesting phone calls and messages from the lenders listed as a “Network “Partner.”

I promise you that it won't be long a CA based telemarketers/Sellers will add CIPA counterclaims to unwary TCPA plaintiffs.

Another recent CIPA lawsuit to look at is Williams v. DDR Media, LLC, 22-cv-03789-SI, (N.D. Cal. Nov. 20, 2024).

On June 27, 2022, plaintiff Loretta Williams filed this putative class action lawsuit against defendants DDR Media LLC and Lead Intelligence Inc. d/b/a Jornaya (“Jornaya”). Williams claims that defendants violated her privacy when she visited DDR Media's website, snappyrent2own.com, because her keystrokes were recorded by a computer code embedded on the website through a Jornaya software product called “TCPA Guardian.” Williams alleges that defendants recorded her personal information and that the recording constitutes wiretapping in violation of California law.

Jornaya has a variety of software products and I didn't know anything about "TCPA Guardian" before reading this opinion, but my understanding from this opinion is that when someone one visits a lead generator website and fills out their contact information and consents to phone calls [lets be fair here, probably a bot faking a real person's consent], TCPA Guardian takes the information like name, email address, and phone number, and uses a formula to convert it to a number. Jornaya then stores the number.

Later, when that lead information is sold, the lead buyer can run the name, email address, and phone number through the same formula and compare the number with the number Jornaya calculate. If the numbers are the same, the lead buyer can be confident the lead seller didn't fake the data.

Since this is a service websites are purchasing, obviously it fits a need. But the real need is a software tool that filters out the bots that create the fake consent for calls. TCPA Guardian isn't doing that, it is making sure the fake consent isn't further faked. Oddly there are lots of solutions to weed out fake consents, like so called double-opt ins. A fake opt in might generate a confirmation text to the phone number, and no response to the confirmation text means no further calls or texts to the number.

Responsible businesses use this, but you rarely see it in use because it weeds out the fake consents the telemarketing industry relies on.

But back to Williams. The district court held that looking at user-inputted data and running it through a formula to create a number isn't an invasion of privacy and I agree with the reasoning behind the ruling.

Jornaya has or had a product that really captured the users keystrokes and they would create videos recreating the user's entered information. I don't know for sure, but I would think undisclosed use of that tool in California would be a problem.

Would you like a free case review? Do you have a question or a telemarketing, debt collection, or bankruptcy case that would make a great blog article? We might even review your pro-se complaint or motion in a blog post. Email peter@nwdebtresolution.com and/or nathen@nwdebtresolution.com and we may answer it for everyone!

Are telemarketers harassing you in Washington, Oregon, or Montana? My Washington State TCPA plaintiff law practice can help, just give us a call at 206-800-6000 or email peter@nwdebtresolution.com.

The thoughts, opinions and musings of this blog are those of Peter Schneider, a consumer advocate and Washington State plaintiff's TCPA attorney at Northwest Debt Resolution, LLC. They are just that, his thoughts, opinions and musings and should be treated as such. They are not legal advice. If you are looking to file a lawsuit for TCPA violations and unwanted calls please contact me for a consultation.