Gruber v. Yelp Inc.

• Citation: 55 Cal.App.5th 591,269 Cal.Rptr.3d 790
• Decision Date: 07 October 2020
• Docket Number: A155063
• Court: California Court of Appeals
• Parties: Eric GRUBER et al., Plaintiffs and Appellants, v. YELP INC., Defendant and Respondent.

55 Cal.App.5th 591

269 Cal.Rptr.3d 790

Eric GRUBER et al., Plaintiffs and Appellants,

v.YELP INC., Defendant and Respondent.

A155063

Court of Appeal, First District, Division 3, California.

Filed October 7, 2020

As Modified on Denial of Rehearing October 23, 2020

Dakessian Law, Mardiros H. Dakessian, Los Angeles, Zareh Jaltorossian ; KP Law and Zareh Jaltorossian ; Da Vega Fisher Mechtenberg, Matthew S. Da Vega, Sunnyvale, Matthew H. Fisher, Santa Barbara; Jaurigue Law Group, JLG Lawyers, Michael J. Jaurigue, Glendale, and Abigail Zelenski for Plaintiffs and Appellants.

Mintz Levin Cohn Ferris Glovsky and Popeo, Joshua Briones, E. Crystal Lopez, Los Angeles, Nicholas Weiss and Matthew J. Novian, Los Angeles, for Defendant and Respondent.

Katie Townsend, Bruce D. Brown, Caitlin Vogus and Lindsie Trego for Reporters Committee for Freedom of the Press as Amicus Curiae on behalf of Defendant and Respondent.

Fletcher, Heald & Hildreth and Kevin M. Goldberg, Washington, DC, for American Society of News Editors and Association for Alternative Newsmedia as Amici Curiae on behalf of Defendant and Respondent.

Jim Ewert for California News Publishers Association as Amicus Curiae on behalf of Defendant and Respondent.

David M. Giles, Philadelphia, PA, for The E.W. Scripps Company as Amicus Curiae on behalf of Defendant and Respondent.

David Snyder for First Amendment Coalition as Amicus Curiae on behalf of Defendant and Respondent.

Barbara W. Wall, McLean, VA, for Gannett Co., Inc. as Amicus Curiae on behalf of Defendant and Respondent.

Juan Cornejo, Buenos Aires, Argentina, for The McClatchy Company as Amicus Curiae on behalf of Defendant and Respondent.

Marshall W. Anstandig for MNG Enterprises, Inc. as Amicus Curiae on behalf of Defendant and Respondent.

Sheppard Mullin Richter & Hampton and James Chadwick, Palo Alto, for MediaNews Group Inc. as Amicus Curiae on behalf of Defendant and Respondent.

Mickey H. Osterreicher for National Press Photographers Association as Amicus Curiae on behalf of Defendant and Respondent.

Davis Wright Tremaine, Laura R. Handman, Alison Schary, Washington, DC, and Thomas R. Burke, San Francisco, for Online News Association as Amicus Curiae on behalf of Defendant and Respondent.

Wiley Rein and Kathleen A. Kirby, Washington, DC, for Radio Television Digital News Association as Amicus Curiae on behalf of Defendant and Respondent.

Baker & Hostetler, Bruce W. Sanford and Mark I. Bailen, Washington, DC, for Society of Professional Journalists as Amicus Curiae on behalf of Defendant and Respondent.

Ignacio Hernandez, Visalia, for Consumer Federation of California, Consumers for Auto Reliability and Safety, Privacy Rights Clearinghouse, Consumer Action and The Utility Reform Network as Amici Curiae.

Jackson, J.

This is an appeal from final judgment after the trial court granted the motion for summary judgment or, in the alternative, summary adjudication of defendant Yelp Inc. (Yelp). Plaintiff Eric Gruber sued Yelp on behalf of himself and a proposed class of similarly situated persons under the California Invasion of Privacy Act (CIPA) ( Pen. Code, § 630 et seq. ) for allegedly recording his phone conversations with Yelp sales representatives without his notice or consent. The trial court summarily adjudicated all causes of action in Yelp's favor after finding no triable issues as to whether Yelp violated section 631, 632 or 632.7 of the Penal Code. On appeal, Gruber challenges the court's findings as to his section 632 and 632.7 claims on both legal and factual grounds.¹ For reasons discussed below, we reverse and remand this matter to the trial court for further proceedings.

FACTUAL AND PROCEDURAL BACKGROUND

Yelp operates an Internet-based business that publishes " ‘crowd-sourced reviews about local businesses’ " on its Web site and mobile app. Yelp also allows business owners to advertise their businesses on Yelp's Web site and mobile app by purchasing advertisement space. To promote this aspect of the business, Yelp employs over 2,000 sales representatives to contact business owners by phone and email to solicit sales of its advertisement space. These sales representatives generally make about 55 to 70 outbound sales calls to customers and potential customers each day.

Gruber is a solo attorney practitioner and law firm owner who was contacted by phone a dozen times or more by Yelp sales representatives between March 2014 and July 2016 "attempting to sell him advertisement space." These calls, which took place between Gruber and three Yelp sales representatives, Spencer Fossen, Monica Page and Corey Young, sometimes lasted seconds and other times lasted up to 24 minutes. During these calls, in which the sales representatives’ voices were recorded, Gruber discussed confidential and financial information regarding his law firm, which opened in 2012. In addition, when conversing with Young, who happened to be his friend, Gruber sometimes joked, discussed private topics including beer drinking, and used profanity or other colorful language. Gruber did not recall that any of the Yelp sales representatives notified him that their phone conversations were being recorded, and he therefore believed their conversations " ‘were, and would remain, private to the parties on the telephone.’ "

I. The Complaint.

On October 12, 2016, Gruber filed a complaint asserting three causes of action: (1) unlawful recording and intercepting of communications ( Pen. Code, § 632.7 ); (2) unlawful recording of and eavesdropping upon confidential communications (id. , § 632 ); and (3) unlawful wiretapping (id. , § 631).² In this complaint, Gruber alleged that his phone conversations with Yelp sales representatives were "eavesdropped on and recorded by" Yelp and that Yelp had a policy and practice to "illegally monitor[ ] and record[ ] calls" between its sales representatives and prospective clients without providing notice or a warning that the calls would be monitored and recorded. Gruber further alleged that Yelp's sales managers would "electronically eavesdrop and record conversations" between its sales representatives and clients without the knowledge or consent of the prospective clients as California law required.

On or about December 19, 2016, Yelp filed an answer in which it denied each of Gruber's allegations and asserted 24 separate affirmative defenses.

II. Yelp's Summary Judgment Motion.

Yelp moved for summary judgment or, in the alternative, summary adjudication (hereinafter, summary judgment motion) on the primary ground that its investigation had revealed none of the sales calls between Gruber and Yelp sales representatives had been monitored or recorded in their entirety. Yelp also presented evidence regarding its policy and practice of recording phone calls between its sales representatives and prospective clients. Specifically, evidence revealed that Yelp engages in both "two-way" and "one-way" recordings. For two-way recordings, Yelp records the voices of both the sales representative and the prospective client. For one-way recordings, Yelp records only the sales representative's voice. Moreover, Yelp's one-way and two-way recordings follow different protocols.

A. Two-way Recordings.

Two-way recorded calls are made through Yelp's phone system and are used for training and quality purposes.³ A sales representative must activate this system manually with a recording feature located on his or her desktop computer.

Two-sided recordings are automatically saved as voicemails accessible from the sales representative's desk phone. A file is automatically created and stored on one of two Yelp servers once the recording or call ends.⁴ A separate feature of Yelp's phone system, which also requires manual activation by the sales representative, automatically generates an email to the representative after a call ends attaching a copy of the two-way recording voicemail. According to Yelp systems engineer Zachary Pleau, to his knowledge all sales representatives utilize this "voicemail–email" feature so that all of their incoming voicemails can be accessed through email. On the other hand, while Yelp sales representatives have discretion to use the two-way recording feature during their sales calls, both Fossen and Kinsey Livingston, Yelp's senior sales training manager, testified that in actuality they "rare[ly]" did.

Yelp also uses customer relationship software to manage and store all client interactions. Yelp's implementation of this software automatically creates and maintains records of all calls made to and received from a potential client and indicates whether a particular call was silently monitored, coached by a supervisor, or recorded.

Yelp has a corporate policy that requires all sales representatives to provide notice to a phone call participant and obtain his or her consent before recording the phone call. All sales representatives receive education and training on this notice policy during their initial orientation and training and, afterward, receive regular reminders from their supervisors.

Discovery yielded no evidence of two-way recordings made of Gruber's phone calls with Yelp sales representatives. After searching the information from its customer relationship software relating to Gruber's call history, Yelp confirmed that no call between Gruber and any sales representative had been monitored, coached or two-way recorded.

B. One-way Recordings.

Unlike two-way recordings, every outbound Yelp sales call is one-way recorded, meaning the sales representative's voice is captured. This type of recording is done through a system called Trivium SonicView. Similarly to every two-way recorded call, every one-way recorded call is documented in Yelp's "customer relationship platform."

Discovery revealed that Yelp sales representatives made several one-way recordings of their calls with Gruber, capturing their voices but not Gruber's voice. According to Gruber, he did not receive notice from the Yelp representatives that any of his calls...