Faulkner v. ADT Sec. Servs., Inc., No. 11–16233.

• Court: United States Courts of Appeals. United States Court of Appeals (9th Circuit)
• Writing for the Court: SACK
• Citation: 706 F.3d 1017
• Parties: John FAULKNER, on behalf of himself and all others similarly situated, Plaintiff–Appellant, v. ADT SECURITY SERVICES, INC.; ADT Security Systems, West, Inc.; Tyco International (U.S.) Inc., Defendants–Appellees.
• Docket Number: No. 11–16233.
• Decision Date: 17 January 2013

706 F.3d 1017

John FAULKNER, on behalf of himself and all others similarly situated, Plaintiff–Appellant,
v.
ADT SECURITY SERVICES, INC.; ADT Security Systems, West, Inc.; Tyco International (U.S.) Inc., Defendants–Appellees.

No. 11–16233.

United States Court of Appeals,
Ninth Circuit.

Argued and Submitted Nov. 5, 2012.
Filed Jan. 17, 2013.

Gretchen Carpenter (argued), Strange & Carpenter, Los Angeles, CA, for Plaintiff–Appellant.

Robert Hickok, pro hac vice (argued), Pepper Hamilton LLP, Philadelphia, PA, for Defendants–Appellees.

Appeal from the United States District Court for the Northern District of California, Jeffrey S. White, District Judge, Presiding. D.C. No. 3:11–cv–00968–JSW.
Before: ROBERT D. SACK,^*RONALD M. GOULD, and MILAN D. SMITH, JR., Circuit Judges.

[706 F.3d 1018]

OPINION
SACK, Circuit Judge:

John Faulkner, a California resident, brought a putative class action against ADT Security Services, Inc., ADT Security Systems, West, Inc., and Tyco International, Inc., (collectively “ADT”) in California Superior Court alleging that ADT recorded his telephone conversation with an ADT representative without his consent in violation of Section 632 of California's invasion of privacy law. Cal.Penal Code § 632. The case was later removed by the defendant to the United States District Court for the Northern District of California on diversity grounds. Upon ADT's motion, the district court concluded that Faulkner's pleadings failed to state a plausible claim upon which relief could be granted and therefore dismissed the action pursuant to Federal Rule of Civil Procedure 12(b)(6). Although we agree with the district court, we remand in order to give the plaintiff an opportunity to seek to amend his complaint to successfully plead a cause of action under the federal standards set forth in Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009), and Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007).

FACTUAL AND PROCEDURAL BACKGROUND

According to his complaint, on March 4, 2010, John Faulkner contacted his security provider, ADT, by telephone to dispute a charge assessed by ADT. Faulkner was transferred to ADT's technical line, where, he alleges, he began hearing periodic “beeping” sounds during the conversation. Upon inquiring about the sounds, Faulkner was informed that his telephone conversation was being recorded by ADT.

Faulkner told the representative that he had not previously been informed that the conversation was being recorded and that he did not wish to continue the conversation if the recording continued. The representative advised Faulkner to contact the customer service line to discuss the issue. Faulkner called on the customer service line, where he asked to speak with a representative on a line that was not being recorded. That representative informed Faulkner that it was the company's policy to record telephone calls and advised Faulkner to end the call if he did not wish to be recorded, which he did.

Based on these conversations, Faulkner filed a claim alleging a violation of Section 632 of California's invasion of privacy law, Cal.Penal Code § 632, in the Superior Court of California, County of San Mateo, on February 3, 2011. Faulkner alleged that his was a confidential communication under the statute and that ADT had violated the statute by recording the conversation without first obtaining his consent. He alleged that conversations such as his were confidential “because they are carried on in circumstances as may reasonably indicate that any party to the communication desires it to be confined to the parties thereto.” Pl.'s Compl. ¶ 27.

On March 2, 2011, ADT removed this action to the United States District Court for the Northern District of California, asserting jurisdiction under 28 U.S.C. § 1332(d)(2). On March 21, 2011, ADT filed a motion to dismiss Faulkner's complaint under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim upon which relief can be granted. By order dated May 12, 2011, the district court (Jeffrey S. White, J.) granted the motion.

The district court concluded that Faulkner's conversation was not a confidential communication because he had “no objectively reasonable expectation that his telephone conversation with ADT would not be overheard or recorded....”

[706 F.3d 1019]

Faulkner v. ADT Sec. Servs., Inc., No. 11–00968, 2011 U.S. Dist. LEXIS 50993, at *8, 2011 WL 1812744, at *3 (N.D.Cal. May 12, 2011). In reaching this conclusion, the court looked at the “surrounding circumstances to determine whether the parties had an objectively reasonable expectation that the conversation [wa]s not being recorded or overheard,” id., and concluded that Faulkner had “not alleged what circumstances would support an expectation of privacy in such a call,” id. at *10, 2011 WL 1812744, at *4. The court distinguished Faulkner's allegations from the facts of cases in which courts had found a reasonably warranted expectation of confidentiality on the...