Joel D. Siegel and Paul M. Kakuske of Dentons write:
In recent years, the California Invasion of Privacy Act (CIPA) (Cal. Penal Code §§ 630-637.5) has spurred class action litigation related to the monitoring and recording of customer calls. The defendants in these actions are typically customer facing companies that routinely record customer service calls, but are alleged not to have advised that the calls “may be recorded for quality assurance.”
Under CIPA, plaintiffs can seek statutory damages of US$5,000 per violation or three times the amount of actual damages, whichever is greater. Because of the number of calls involved in day-to-day business activities and the possibility that one person may experience multiple “violations,” CIPA can result in a very large class award. Faced with such staggering potential damages, some companies have settled these class actions for millions of dollars.1
In a recent published decision, however, the California Court of Appeal may have sounded the death knell for these types of class actions.
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