SAN DIEGO (Legal Newsline) – A California appeals court last month reversed a decision issued earlier in a San Diego County court, effectively reinstituting a consumer’s complaint against a financial services company for allegedly illegal phone call recording.

In the California Court of Appeal, Fourth Appellate District, Division One, Judge Joan K. Irion, Associate Judge Richard D. Huffman and Judge William Dato concurred on Jan. 16 to reverse an earlier decision rendered by Superior Court of San Diego County Judge Earl H. Maas III.

California resident Dalia Rojas lodged two complaints against HSBC Card Services Inc. and its affiliate HSBC Technology & Services, collectively known as HSBC, alleging invasion of privacy based on state law.

According to the memorandum, HSBC used an automated call recording system between the dates of March 23, 2009, and May 1, 2012, which recorded all phone calls on company lines. Rojas alleged that by intentionally recording her private phone conversations, the defendants violated California Invasion of Privacy Act (Privacy Act) Penal Code section 630 et seq.

Specifically Rojas focused her complaint on two points: section 632, subdivision (a) (§ 632(a)), forbidding one party to a telephone call to intentionally record a confidential communication without the other party’s knowledge or consent; and section 632.7, subdivision (a) (§ 632.7(a)), which prohibits intentionally recording a call using a cellular or cordless telephone.

In the first round, Maas found HSBC’s motion for summary judgment acceptable and ruled in favor of HSBC.

It prompted Rojas’ appeal, and the trio of judges recently concluded that HSBC, in their view, failed to meet its responsibility.

The clincher came by virtue of the fact that when HSBC utilized an automatic call recording system, “this system contained ‘equipment that was activated when an employee placed a telephone call,’” the opinion states.

The judges noted that HSBC recorded no less than 317 of Rojas’ conversations on calls initiated from a company phone during the specified time period. All but one call were placed by Rojas’ own daughter, an employee of the defendants, and the last was placed by a friend who also worked at HSBC.

According to the decision, personal calls on company equipment were in fact permitted, and at the same time, HSBC duly advised staffers in writing that calls might be recorded. While the defendants admitted that none of the conversations pertained to HSBC business, they nevertheless maintained that the calls were not intentionally recorded.

The appellate court on Jan. 16 reversed the judgment, denying HSBC’s motion for summary judgment or adjudication of the plaintiff’s first amended complaint and granting Rojas the right to continue her case.

“We agree with Rojas that, because HSBC did not meet its initial burden under Code of Civil Procedure section 437c, subdivision (p)(2), the trial court erred in granting HSBC's motion for summary judgment,” the court wrote. “Accordingly, we will reverse the judgment and remand with directions to enter an order denying HSBC's motion.”

The bottom line, it opined, was that while HSBC claimed not to intentionally record calls, it nonetheless knew it was using its automated system, diminishing its credibility concerning intent and simultaneously violating the stated law.

“HSBC purposefully used a full-time recording system to record all of the calls on certain telephone lines,” the justices concluded. “The judgment is reversed, and … Rojas is entitled to her costs on appeal.”

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