IN THE SUPREME COURT OF 

CALIFORNIA

JEREMIAH SMITH,

Plaintiff and Appellant,

v.

LOANME, INC.,

Defendant and Respondent.

S260391

Fourth Appellate District, Division Two

E069752

Riverside County Superior Court

RIC1612501

April 1, 2021

Chief Justice Cantil-Sakauye authored the opinion of the Court, 

in which Justices Corrigan, Liu, Cuéllar, Kruger, Groban and 

Jenkins concurred.
1

SMITH v. LOANME, INC.

S260391

Opinion of the Court by Cantil-Sakauye, C. J.

Under Penal Code section 632.7, subdivision (a) 

(hereinafter section 632.7(a)),1it is a crime when a person 

“without the consent of all parties to a communication, 

intercepts or receives and intentionally records, or assists in the 

interception or reception and intentional recordation of, a 

communication transmitted between” a cellular or cordless 

telephone and another telephone. A violation of section 632.7 

also can be pursued civilly and lead to the assessment of 

damages and other appropriate relief. The issue presented in 

this case is whether section 632.7 applies to the parties to a 

communication, prohibiting them from recording a covered 

communication without the consent of all participants, or 

whether the section is concerned only with recording by persons 

other than parties (sometimes hereinafter referred to as

“nonparties” to the communication), such as an individual who 

covertly intercepts a phone call and eavesdrops upon it. 

The Court of Appeal concluded that section 632.7 applies 

only to nonparties and does not forbid a party to a phone call

transmitted to or from a cellular or cordless telephone from 

recording the conversation without the consent of the other 

party or parties. We reach a contrary conclusion and hold that

section 632.7 applies to parties as well as nonparties. This 

1

 All subsequent undesignated statutory references are to the 

Penal Code. 
SMITH v. LOANME, INC.

Opinion of the Court by Cantil-Sakauye, C. J.

2

interpretation reflects the most sensible reading of the statutory 

text, is consistent with the relevant legislative history, and 

advances the Legislature’s apparent intent by protecting 

privacy in covered communications to a greater degree than the 

Court of Appeal’s construction would. Accordingly, we reverse 

the judgment below and remand the matter to the Court of 

Appeal for further proceedings consistent with our opinion.

I. FACTUAL AND PROCEDURAL BACKGROUND

This case arises out of a brief phone conversation. 

Defendant LoanMe, Inc. (LoanMe) extended a loan to the wife 

of plaintiff Jeremiah Smith. In October 2015, a LoanMe 

employee called a phone number Smith’s wife had provided. 

Smith answered, on what he asserts was a cordless phone. 

Smith advised the LoanMe representative that his wife was not

at home. The call then ended, 18 seconds after it began. 

LoanMe recorded the call. Three seconds into the call, 

LoanMe caused a “beep” tone to sound. The LoanMe

representative on the call did not orally advise plaintiff that the 

call was being recorded.

In September 2016, Smith brought suit on behalf of a 

putative class consisting of “[a]ll persons in California whose 

inbound and outbound telephone conversations involving their 

cellular or cordless telephones were recorded without their 

consent by [LoanMe] or its agent/s within the one year prior to 

the filing of this action.” The complaint alleged that the 

recording of these calls violated section 632.7. 

The parties agreed to a bifurcated bench trial for the court 

to decide whether Smith consented to having the phone call

recorded by continuing the conversation after LoanMe activated 

the “beep” tone. After listening to the call, the trial court agreed 
SMITH v. LOANME, INC.

Opinion of the Court by Cantil-Sakauye, C. J.

3

with LoanMe that the tone gave Smith adequate notice that the 

call was being recorded. The trial court subsequently entered 

judgment in LoanMe’s favor. 

When Smith sought review, the Court of Appeal did not 

delve into the consent issue decided by the superior court. 

Instead, the reviewing court requested supplemental briefing

regarding whether section 632.7 prohibits a party from 

intentionally recording a communication transmitted to or from 

a cellular or cordless phone, or whether the section forbids only

the intentional recording of such communications by persons 

other than parties. The Court of Appeal ultimately concluded

“that section 632.7 prohibits only third party eavesdroppers from 

intentionally recording telephonic communications involving at 

least one cellular or cordless telephone. Conversely, section 

632.7 does not prohibit the participants in a phone call from 

intentionally recording it.” (Smith v. LoanMe, Inc. (2019) 

43 Cal.App.5th 844, 848 (Smith).) The judgment was affirmed

on this basis. (Ibid.)

The Court of Appeal regarded section 632.7 as 

unambiguously applicable only to nonparties. (Smith, supra, 

43 Cal.App.5th at p. 851.) It reasoned, “The statute . . . requires 

that the interception or receipt of the [covered] communication 

be without the parties’ consent. But the parties to a phone call 

always consent to the receipt of their communications by each 

other — that is what it means to be a party to the call (or at least 

that is part of what it means). In this case, for example, LoanMe 

consented to Smith’s receipt of LoanMe’s communications (‘Is 

Mrs. Smith there?’), and Smith consented to LoanMe’s receipt of 

Smith’s communications (‘No.’). Consequently, the parties to a 

phone call are incapable of violating section 632.7, because they 
SMITH v. LOANME, INC.

Opinion of the Court by Cantil-Sakauye, C. J.

4

do not intercept or receive each other’s communications without 

all parties’ consent.” (Ibid.) 

The Court of Appeal also saw its interpretation of section 

632.7 as harmonizing this section with sections 632.5 and 632.6, 

which also address privacy issues implicated by the use of 

cellular and cordless phones. Sections 632.5 and 632.6 provide 

for liability when a person “maliciously and without the consent

of all parties to the communication, intercepts . . . [or] receives”

a communication transmitted between devices including a 

cellular phone (§ 632.5, subd. (a) (hereinafter section 632.5(a)))

or a cordless phone (§ 632.6, subd. (a) (hereinafter section 

632.6(a))). The Court of Appeal determined that these sections

cannot reasonably be applied to the parties to a phone call, for 

reasons including the fact that it was “not clear what it would 

mean for one party to receive the other party’s communications 

with malice.” (Smith, supra, 43 Cal.App.5th at p. 852.) Because

sections 632.5 and 632.6 do not apply to the parties to a 

communication, the Court of Appeal reasoned, section 632.7

should be construed similarly. (Smith, at pp. 851–852.) The

Court of Appeal also saw it as “absurd” for a party to be held 

liable under section 632.7 for recording a call when it was “pure 

happenstance” whether the other party or parties were using 

cellular or cordless phones, as opposed to landline phones. 

(Smith, at p. 853.)

Finally, the Court of Appeal also saw its reading of section 

632.7 as accordant with the relevant legislative history. The 

court observed that in materials generated during legislative 

deliberations regarding Assembly Bill No. 2465 (1991–1992 Reg. 

Sess.) (hereinafter Assembly Bill 2465), the measure through 

which section 632.7 was added to the Penal Code, the 
SMITH v. LOANME, INC.

Opinion of the Court by Cantil-Sakauye, C. J.

5

Legislature “never shows any concern about recording by 

parties.” (Smith, supra, 43 Cal.App.5th at p. 859.) 

We granted review.

II. DISCUSSION

The discussion below proceeds as follows. We first 

examine the text of section 632.7(a), which we determine is most 

naturally read as prohibiting both parties and nonparties from

intentionally recording a covered communication without the 

consent of all parties to the communication. Because the text 

conceivably could support the Court of Appeal’s interpretation 

as well, however, we also consult the legislative history and 

public policy as additional tools to ascertain the Legislature’s 

intent. Upon review of these resources, we conclude that this 

section applies to the intentional recording of a covered 

communication regardless of whether the recording is 

performed by a party to the communication, or by a nonparty. 

A. General Principles

“ ‘ “When we interpret a statute, ‘[o]ur fundamental task 

. . . is to determine the Legislature’s intent so as to effectuate 

the law’s purpose. We first examine the statutory language, 

giving it a plain and commonsense meaning. We do not examine 

that language in isolation, but in the context of the statutory 

framework as a whole in order to determine its scope and 

purpose and to harmonize the various parts of the enactment. 

If the language is clear, courts must generally follow its plain 

meaning unless a literal interpretation would result in absurd 

consequences the Legislature did not intend. If the statutory 

language permits more than one reasonable interpretation, 

courts may consider other aids, such as the statute’s purpose, 

legislative history, and public policy.’ [Citation.] ‘Furthermore, 
SMITH v. LOANME, INC.

Opinion of the Court by Cantil-Sakauye, C. J.

6

we consider portions of a statute in the context of the entire 

statute and the statutory scheme of which it is a part, giving 

significance to every word, phrase, sentence, and part of an act 

in pursuance of the legislative purpose.’ ” ’ ” (Meza v. Portfolio 

Recovery Associates, LLC (2019) 6 Cal.5th 844, 856–857.) The 

interpretation of a statute presents a question of law that this 

court reviews de novo. (People v. Jimenez (2020) 9 Cal.5th 53, 

61; Goodman v. Lozano (2010) 47 Cal.4th 1327, 1332.) 

B. The Context and Provisions of Section 632.7

Section 632.7 is part of the Invasion of Privacy Act (§ 630 

et seq.). As we explained in Flanagan v. Flanagan (2002) 

27 Cal.4th 766, 768–769 (Flanagan), as originally enacted in 

1967 this statute replaced “prior laws that permitted the 

recording of telephone conversations with the consent of one 

party to the conversation. [Citation.] The purpose of the act 

was to protect the right of privacy by, among other things, 

requiring that all parties consent to a recording of their 

conversation.” 

A foundational component of the act, section 632, provides

for liability when “[a] person . . . intentionally and without the 

consent of all parties to a confidential communication . . . uses 

an electronic amplifying or recording device to eavesdrop upon 

or record the confidential communication, whether the 

communication is carried on among the parties in the presence

of one another or by means of a telegraph, telephone, or other 

device, except a radio.” (Id., subd. (a).) Other provisions within 

the statutory scheme reflect updates that have been made from 

time to time in response to the emergence of new communication 

devices. The Legislature augmented the statutory scheme in 

1985, 1990, and 1992 “to take account of privacy issues raised 
SMITH v. LOANME, INC.

Opinion of the Court by Cantil-Sakauye, C. J.

7

by the increased use of cellular and cordless telephones. (See 

§ 632.5, added by Stats. 1985, ch. 909, § 3, p. 2902; § 632.6, 

added by Stats. 1990, ch. 696, § 4, p. 3269; § 632.7, added by 

Stats. 1992, ch. 298, § 6, p. 1216.) In enacting the first of these 

amendments[, the Cellular Radio Telephone Privacy Act of 

1985], the Legislature found that ‘the advent of widespread use 

of cellular radio telephone technology means that persons will 

be conversing over a network which cannot guarantee privacy 

in the same way that it is guaranteed over landline systems.’ 

(Stats. 1985, ch. 909, § 2, p. 2900; similar language as to cordless 

telephones appears in Stats. 1990, ch. 696, § 2, p. 3268.) 

Responding to the problem of protecting the privacy of parties 

to calls involving cellular or cordless telephones, the Legislature 

prohibited the malicious interception of calls from or to cellular 

or cordless phones (§§ 632.5, 632.6) and the intentional

interception or recording of a communication involving a 

cellular phone or a cordless phone (§ 632.7).” (Flanagan, at 

pp. 775–776.)2

This case concerns the most recent of the revisions

discussed in Flanagan. Section 632.7(a) provides, “Every person 

who, without the consent of all parties to a communication, 

intercepts or receives and intentionally records, or assists in the 

interception or reception and intentional recordation of, a 

communication transmitted between two cellular radio 

telephones, a cellular radio telephone and a landline telephone, 

two cordless telephones, a cordless telephone and a landline 

2 As will be explained in part II.C, section 632.7 does not 

prohibit the “intentional interception or recording” of a covered 

communication (Flanagan, supra, 27 Cal.4th at p. 776); it is 

concerned instead with the intentional recording of an 

intercepted or received communication.
SMITH v. LOANME, INC.

Opinion of the Court by Cantil-Sakauye, C. J.

8

telephone, or a cordless telephone and a cellular radio telephone, 

shall be punished” in the manner the section proceeds to 

describe. (See also § 637.2 [specifying statutory damages and 

other remedies for violations of § 632.7].) Subdivision (b) of 

section 632.7 provides for certain exceptions to this prohibition, 

and subdivision (c) defines or explains some of the terms as used 

within the section.

3

The Court of Appeal’s decision below was the first 

published opinion by a California appellate court to have 

specifically addressed whether section 632.7 applies to the 

intentional recording of a communication by a party. The Court 

of Appeal’s interpretation of section 632.7 departs from the 

majority view of the federal district courts that have considered 

the same issue. Some of these courts have concluded that the 

text of section 632.7(a) unambiguously prohibits a party from 

recording a protected communication without the consent of all 

other parties. (E.g., Montantes v. Inventure Foods (C.D.Cal.,

3 Within section 632.7, subdivision (c), “cellular radio 

telephone” is defined as “a wireless telephone authorized by the 

Federal Communications Commission to operate in the 

frequency bandwidth reserved for cellular radio telephones.” 

(Id., subd. (c)(1).) “Cordless telephone” is defined as “a two-way, 

low power communication system consisting of two parts, a 

‘base’ unit which connects to the public switched telephone 

network and a handset or ‘remote’ unit, that are connected by a 

radio link and authorized by the Federal Communications 

Commission to operate in the frequency bandwidths reserved for 

cordless telephones.” (Id., subd. (c)(2).) Lastly, section 632.7, 

subdivision (c)(3) explains that “ ‘[c]ommunication’ includes, but 

is not limited to, communications transmitted by voice, data, or 

image, including facsimile.” Several other terms used in section 

632.7, including “intercepts,” “receives,” and “parties,” are not 

similarly defined within the section, or for that matter anywhere 

in the code chapter in which they appear.
SMITH v. LOANME, INC.

Opinion of the Court by Cantil-Sakauye, C. J.

9

July 2, 2014, No. CV-14-1128-MWF(RZx)) 2014 WL 3305578, 

pp. *2–*4; Ades v. Omni Hotels Management Corp. (C.D.Cal. 

2014) 46 F.Supp.3d 999, 1017–1018.) Other federal courts have 

regarded the text of section 632.7(a) as ambiguous but read the

legislative history as evincing legislative intent that the statute

would apply to parties and nonparties alike. (E.g., Brinkley v. 

Monterey Fin. Servs., LLC (S.D.Cal. 2018) 340 F.Supp.3d 1036, 

1042–1043; Simpson v. Best Western Intern., Inc. (N.D.Cal.,

Nov. 13, 2012, No. 3:12-cv-04672-JCS) 2012 WL 5499928, 

pp. *6–*9.) Finally, a minority position aligns with the views of

the Court of Appeal below and regards section 632.7 as 

concerned only with intentional recording by persons other than

the parties to a communication. (Young v. Hilton Worldwide, 

Inc. (C.D.Cal., July 11, 2014, No. 2:12-cv-01788-R-(PJWx)) 2014 

WL 3434117, p. *1.)

In interpreting section 632.7 as inapplicable to the parties 

to a communication, the Court of Appeal did not examine our 

decision in Flanagan, supra, 27 Cal.4th 766, which contains our 

most extensive prior discussion of section 632.7. In Flanagan, 

we resolved a split of authority regarding what amounts to a

“confidential communication” that section 632, subdivision (a) 

protects from recording without the parties’ consent. We agreed 

with the view that “a conversation is confidential if a party to 

that conversation has an objectively reasonable expectation that 

the conversation is not being overheard or recorded” (Flanagan, 

at p. 768), and rejected an alternative interpretation of the 

statutory language that we considered less protective of the 

parties’ privacy (ibid.). In so holding, we emphasized that the 

preferred interpretation was more consistent with the 

protections conferred by sections 632.5, 632.6, and 632.7. These 

other provisions, we observed, all “protect against interception 
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Opinion of the Court by Cantil-Sakauye, C. J.

10

or recording of any communication. When the Legislature 

determined that there was no practical means of protecting 

cordless and cellular phone conversations from accidental 

eavesdropping, it chose to protect all such conversations from 

malicious or intentional eavesdropping or recording, rather than 

protecting only conversations where a party wanted to keep the 

content secret.” (Flanagan, at p. 776.) We later added, “Under 

the construction adopted here, the [Invasion of] Privacy Act is a 

coherent statutory scheme. It protects against intentional, 

nonconsensual recording of telephone conversations regardless 

of the content of the conversation or the type of telephone 

involved.” (Ibid.; see also id., at p. 771, fn. 2 [“Section 632.7, 

enacted in 1992, prohibits intentionally intercepting or 

recording communications involving cellular telephones and 

cordless telephones. This prohibition applies to all 

communications, not just confidential communications.”]; 

Kearney v. Salomon Smith Barney, Inc. (2006) 39 Cal.4th 95, 

122 (Kearney) [“it is unlawful under California law for a party 

to a telephone conversation to record the conversation without 

the knowledge of all other parties to the conversation”].) 

C. The Language of Section 632.7, Read in Context, 

Favors an Interpretation of the Section as 

Applicable to Parties as Well as Nonparties

We now look more closely at the language of section 

632.7(a), focusing upon its phrasing, “[e]very person who, 

without the consent of all parties to a communication, intercepts 

or receives and intentionally records . . . a communication . . . .” 

The Court of Appeal read section 632.7(a) as 

contemplating liability only in situations in which a person 

(1) intercepts or receives a communication without the consent 

of all parties to the communication, and (2) intentionally records 
SMITH v. LOANME, INC.

Opinion of the Court by Cantil-Sakauye, C. J.

11

the communication without the consent of all parties to the 

communication. As previously observed, the Court of Appeal

relied on this construction of section 632.7(a) in concluding that

recording by a party to a phone call is not prohibited under this 

provision because the parties to a call normally consent to other 

participants’ “receipt” of their input.

A different interpretation of section 632.7(a) would read 

its consent language as directed at the recording component of 

the offense, with the section’s “intercepts or receives” phrasing

specifying the circumstances in which a person may become 

privy to a covered communication. Under this interpretation of 

section 632.7(a), there is no doubt regarding its applicability to

parties as well as nonparties to a communication. Although 

parties might normally be regarded as consenting to the receipt 

of their communications by other parties to a call, this 

acquiescence would not, by itself, necessarily convey their

consent to having these communications recorded.

4

We conclude that the second of these interpretations 

represents the more plausible reading of section 632.7(a).

Within section 632.7(a), the interception or receipt of a covered 

communication is not so much a discrete subject of consent as it 

is a description of the circumstances in which the prohibited act 

of recordation without proper consent may occur. Such a

construction aligns with how phrasing comparable to that found 

4 The circumstances involved with certain kinds of 

communications may lead to a reasonable inference that a party 

sending a communication has consented to having it recorded by 

the intended recipient — recordation would be expected with a 

facsimile or text transmission, for example. (See § 632.7, subd. 

(c)(3) [defining “communication” as including facsimile 

transmissions].)
SMITH v. LOANME, INC.

Opinion of the Court by Cantil-Sakauye, C. J.

12

in section 632.7(a) would be understood in other contexts. 

Consider, for example, a rule providing that “any person who, 

without the prior consent of the court, receives a jury summons 

and fails to report to jury duty, shall be guilty of contempt.” In

this example, the receipt of the jury summons is obviously not 

the target of the consent language; it is simply a fact that, when 

coupled with an unconsented-to failure to appear, can lead to 

liability. The language of section 632.7(a) communicates a 

similar rule.5

This interpretation of section 632.7(a) finds some support

elsewhere in the statutory scheme. When the Legislature added 

section 632.7 to the Penal Code through Assembly Bill 2465, it 

also amended section 633.5 to add a reference to section 632.7

as follows: “Nothing in Section 631, 632, 632.5, 632.6, or 632.7

prohibits one party to a confidential communication from 

recording the communication for the purpose of obtaining 

evidence reasonably believed to relate to the commission by 

another party to the communication of” certain crimes. (Stats. 

5 One might also draw an analogy to the language in section 

632, subdivision (a) prohibiting a person from, intentionally and 

without the consent of all parties to a confidential 

communication, using “an electronic amplifying or recording 

device to eavesdrop upon or record the confidential 

communication.” Just as liability under section 632 would not 

be avoided by the parties’ consent to someone using an electronic 

amplifying or recording device for some purpose other than 

eavesdropping upon or recording a communication, the consent 

language in section 632.7(a) is not properly understood as 

separately directed at a discrete “intercepts or receives” 

component of the course of conduct proscribed by this section. 
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Opinion of the Court by Cantil-Sakauye, C. J.

13

1992, ch. 298, § 9, p. 1218, italics added.)6 The inclusion of this 

reference to section 632.7 within section 633.5 suggests that the

legislators who enacted Assembly Bill 2465 believed section 

632.7 could apply to parties.7 

Meanwhile, nothing within this scheme provides concrete 

evidence of a contrary intention. As previously mentioned, the 

Court of Appeal regarded its interpretation as harmonizing

section 632.7’s provisions with those of sections 632.5 and 632.6, 

which apply when a person “maliciously and without the 

consent of all parties to the communication, intercepts, receives, 

or assists in intercepting or receiving a communication” 

involving a cellular or cordless telephone. 

(§§ 632.5(a), 632.6(a).)8 The Court of Appeal reasoned that it 

was difficult to fathom how a party could “maliciously” receive a 

communication. (Smith, supra, 43 Cal.App.5th at p. 852.) And 

because sections 632.5 and 632.6 do not appear to have parties 

in mind, the Court of Appeal determined, section 632.7 should 

be construed as similarly limited to nonparties. (Smith, at 

pp. 851–852.) In a related vein, LoanMe argues that the word 

“receives,” as used in sections 632.5(a) and 632.6(a), 

6 A similar reference to section 632.7 still appears in section 

633.5, notwithstanding subsequent amendments to the latter 

section.

7

It is true that section 633.5 also references sections 632.5 

and 632.6, which are less obviously applicable to parties. But 

even if the Legislature may have been overcautious in adding 

these references to section 633.5, that does not mean that the 

later Legislature that enacted Assembly Bill 2465 should be 

understood as having added surplusage to the statute.

8 Section 632.6(a), but not section 632.5(a), includes 

language addressing a situation in which a conversation is 

conducted between a cellular phone and a cordless phone.
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Opinion of the Court by Cantil-Sakauye, C. J.

14

contemplates only persons who receive communications without 

the parties’ consent, and that this word should carry the same 

meaning as it appears in section 632.7(a).

These arguments overlook important differences between 

the language within sections 632.5(a) and 632.6(a) on the one 

hand, and section 632.7(a) on the other. It is one thing to 

describe a person as someone who “maliciously and without the 

consent of all parties to the communication . . . intercepts . . .

[or] receives . . . a communication” (§ 632.5(a), italics added; see 

also § 632.6(a) [same]), and another to address a person who 

“without the consent of all parties to a communication . . . 

intercepts or receives and intentionally records . . . a 

communication” (§ 632.7(a), italics added). The additional 

language regarding recordation within section 632.7(a), and 

section 632.7(a)’s lack of a malice requirement, function to 

describe a class of potential perpetrators that includes parties,

even if sections 632.5(a) and 632.6(a) do not. Although it may 

be challenging to envision how a party could maliciously receive

a covered communication, it is not so hard to grasp how a party 

could just receive such a communication, without malice. That, 

or interception, is all that section 632.7(a) requires when 

accompanied by intentional recording without the necessary

consent. 

Thus, if we had to decide upon an interpretation of section 

632.7(a) based solely on the statutory language, we would 

conclude that this provision’s prohibition of intentional

recording without the consent of all parties should be construed

as applicable to parties as well as nonparties. But even though 

we regard this as the most sensible reading of section 632.7(a), 

we cannot say that the statutory language is so clear as to be

unambiguous. Therefore, we also review the pertinent
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Opinion of the Court by Cantil-Sakauye, C. J.

15

legislative history, which confirms our interpretation by

shedding light on what the Legislature sought to accomplish by 

adding section 632.7 to the Penal Code. (See Scher v. Burke

(2017) 3 Cal.5th 136, 148–150.) 

D. The Legislative History and Background of 

Section 632.7 Are Consistent with Its Application

to Parties 

The legislative history of Assembly Bill 2465 comports

with our reading of section 632.7 as announcing a general

prohibition against the intentional recording of a covered 

communication without the consent of all parties, regardless of 

whether the recording is performed by a party to the 

communication or by someone else.

Committee analyses of Assembly Bill 2465, as well as 

other materials within the legislative record, establish that

section 632.7 responded to concerns that existing law did not 

prohibit the recordation of communications involving a cellular 

or cordless telephone. One committee analysis of the measure

explained, “Under current law, it is only illegal to intercept a 

conversation transmitted between the [sic] cellular or cordless 

telephones. There is no prohibition against recording a 

conversation transmitted between cellular or cordless phones. 

By comparison, it is currently illegal to intercept or record a 

conversation between traditional telephones. There appears to 

be no sound policy reason behind this discrepancy.” (Assem. 

Com. on Pub. Safety, Analysis of Assem. Bill No. 2465 (1991–

1992 Reg. Sess.) as amended Mar. 9, 1992, p. 1, underscoring 

omitted; see also Sen. Rules Com., Off. of Sen. Floor Analyses, 

Analysis of Assem. Bill No. 2465 (1991–1992 Reg. Sess.) as 

amended June 1, 1992, p. 1; Sen. Com. on Judiciary, Analysis of 

Assem. Bill No. 2465 (1991–1992 Reg. Sess.) as amended June 1, 
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Opinion of the Court by Cantil-Sakauye, C. J.

16

1992, pp. 2, 3.) These concerns apparently owed to a sense that 

communications involving cellular or cordless telephones might 

represent “radio” communications that section 632 expressly 

excludes from its purview, or that these communications could 

not be regarded as “confidential” under section 632 because they 

could be overheard by eavesdroppers using a radio scanner. 

(Sen. Com. on Judiciary, Analysis of Assem. Bill No. 2465, at 

p. 3; Ops. Cal. Legis. Counsel, No. 27958 (Dec. 17, 1991) 

Invasion of Privacy, pp. 2, 5–6.)

9

 

Providing additional context, another committee analysis

of Assembly Bill 2465 described the rationale behind section 

632.7 as follows: “According to the author, [¶] [t]he primary 

intent of this measure is to provide a greater degree of privacy 

and security to persons who use cellular or cordless telephones. 

Specifically, AB 2465 prohibits persons from recording 

conversations transmitted between cellular or cordless 

telephones. [¶] Under current law, it is only illegal to 

‘maliciously’ intercept a conversation transmitted between the 

above-identified telephones. There is no prohibition against 

recording a conversation transmitted between cellular or 

cordless telephones. [¶] By comparison, it is currently illegal to 

‘intentionally’ intercept or record a conversation transmitted 

between landline, or traditional, telephones. [¶] AB 2465 

recognizes the distinction between traditional, landline 

9 Whether a court should arrive at the same interpretation 

of section 632 as the one apparently accepted by the Legislature 

that passed Assembly Bill 2465 is an issue we need not address

here. We note without further comment, though, that some 

federal case law regards section 632 as applicable to 

communications involving a cellular phone. (E.g., Brinkley v. 

Monterey Fin. Servs., LLC, supra, 340 F.Supp.3d at p. 1042.)
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Opinion of the Court by Cantil-Sakauye, C. J.

17

telephones and inherently, less secure (or more public) nontraditional cellular and cordless telephones. Most simply, 

landline telephones employ ‘closed’ wire-to-wire systems, 

whereas cellular and cordless telephones employ radio waves. 

Generally, there is a greater expectation of privacy with regard 

to the former technology than the latter technology. [¶] 

However, this does not mean that persons who use cellular or 

cordless telephones may reasonably anticipate that their 

conversations will be both intercepted and recorded. While 

there may be utility in retaining relatively unimpeded access to 

the public ‘air waves,’ there is no value in permitting private 

telephone conversations that employ the ‘air waves’ to be 

indiscriminately record[ed]. [¶] AB 2465 strikes the 

appropriate balance. The innocent, merely curious, or nonmalicious interception of cellular or cordless telephone 

conversation will remain legal. However, it will be illegal to 

record the same conversations. Henceforth, persons using 

cellular or cordless telephones may do so knowing that their 

conversations are not being recorded.” (Sen. Com. on Judiciary, 

Analysis of Assem. Bill No. 2465, supra, at pp. 3–4, underscoring 

omitted; see also Assem. Conc. Sen. Amends. to Assem. Bill 

No. 2465 (1991–1992 Reg. Sess.) as amended June 1, 1992, p. 1 

[also quoting the author’s statement that the bill “prohibits 

persons from recording conversations transmitted between 

cellular or cordless phones”]; Assem. Com. on Pub. Safety, 

Analysis of Assem. Bill No. 2465, supra, p. 1 [similarly quoting 

the author’s statement of intent].)

These descriptions of existing law, and of what Assembly 

Bill 2465 would accomplish, fairly convey that the enacting 

Legislature viewed section 632.7 as plugging a perceived hole in 

the statutory scheme that left communications involving 
SMITH v. LOANME, INC.

Opinion of the Court by Cantil-Sakauye, C. J.

18

cordless and cellular telephones unprotected from recording. 

The apparent intent was not limited to protecting covered 

communications from interlopers acting without malice (the 

malicious interception or receipt of a communication already

being covered by sections 632.5 and 632.6). The Legislature’s 

aim was instead to more generally protect communications 

involving a cordless or cellular phone from intentional 

recordation without the parties’ consent — and by doing so,

better align the array of protections accorded to calls involving 

cellular or cordless phones with the safeguards applicable to 

calls involving only landlines. 

This intent would not be vindicated by an interpretation 

of section 632.7 as applicable only to recording by nonparties.

Were the section so construed, parties to a communication 

transmitted between a cellular or cordless phone and another 

device could covertly record the communication, leaving intact a 

substantial component of the “discrepancy” in protections that 

the Legislature detected and sought to address. (Assem. Com. 

on Pub. Safety, Analysis of Assem. Bill No. 2465, supra, at p. 1.) 

On this point, by the time Assembly Bill 2465 came before the

Legislature it had long been established that section 632 

prohibits parties as well as nonparties from recording a 

“confidential communication” within its parameters. (Warden 

v. Kahn (1979) 99 Cal.App.3d 805, 812; Forest E. Olson, Inc. v. 

Superior Court (1976) 63 Cal.App.3d 188, 191–192.) Were we to 

regard section 632.7 as inapplicable to the parties to a 

communication, we would have to conclude that the Legislature

that enacted Assembly Bill 2465 was content with retaining a 

substantial gap between the protections attached to landline 

communications and those afforded to calls involving a cellular 

or cordless telephone. Such a view of legislative intent — which
SMITH v. LOANME, INC.

Opinion of the Court by Cantil-Sakauye, C. J.

19

would be in some tension with our previous assessment of the 

statutory scheme in Flanagan, supra, 27 Cal.4th at page 776 —

would be difficult to square with the historical record. 

It is true that one might infer from some committee 

analyses of Assembly Bill 2465 that the prospect of invasions of 

privacy by third parties was front-and-center in legislators’ 

minds as they considered the bill. (See Smith, supra, 

43 Cal.App.5th at p. 857.) But unlike the Court of Appeal, we 

do not regard recording by nonparties as the Legislature’s sole 

focus or concern. Even if such scenarios loomed large as 

Assembly Bill 2465 proceeded through the Legislature, it is also

apparent from the legislative history that the Legislature saw

this measure as protecting the privacy interests that can be 

implicated whenever a communication is recorded without 

consent, regardless of whether it is a party or an outsider 

performing the recording. (See People v. Wade (2016) 63 Cal.4th 

137, 143; Grupe Development Co. v. Superior Court (1993) 

4 Cal.4th 911, 921; accord, Oncale v. Sundowner Offshore 

Services, Inc. (1998) 523 U.S. 75, 79 [noting that statutory 

prohibitions “often go beyond the principal evil to cover 

reasonably comparable evils, and it is ultimately the provisions 

of our laws rather than the principal concerns of our legislators 

by which we are governed”].) And as explained ante, the 

language of section 632.7(a) is best read as addressing this more 

far-reaching concern by encompassing recordation by parties 

and nonparties alike. In short, even if certain scenarios 

involving third-party recordation of phone conversations may 

have been particularly salient when the Legislature passed 

Assembly Bill 2465, that does not mean section 632.7 applies 

only in those circumstances. 
SMITH v. LOANME, INC.

Opinion of the Court by Cantil-Sakauye, C. J.

20

E. Interpreting Section 632.7 as Applicable to

Recording by Parties Better Promotes the 

Statutory Scheme’s Goal of Protecting Privacy in 

Communications

Policy considerations enshrined in the statutory scheme 

also point toward an interpretation of section 632.7 as applicable 

to recording by parties as well as nonparties. Such an 

interpretation is in synch with expressions of intent, findings, 

and declarations within the Invasion of Privacy Act, and with 

what we have understood to be the Legislature’s rationales for

shielding certain kinds of communications from recording. 

“In enacting [the Invasion of Privacy Act], the Legislature 

declared in broad terms its intent ‘to protect the right of privacy 

of the people of this state’ from what it perceived as ‘a serious 

threat to the free exercise of personal liberties [that] cannot be 

tolerated in a free and civilized society.’ (Pen. Code, § 630.) This 

philosophy appears to lie at the heart of virtually all the 

decisions construing the Privacy Act.” (Ribas v. Clark (1985) 

38 Cal.3d 355, 359 (Ribas).) As we observed in Flanagan, supra, 

27 Cal.4th 766, in subsequently enacting the Cellular Radio 

Telephone Privacy Act of 1985, the Legislature found and 

declared, “ ‘the advent of widespread use of cellular radio 

telephone technology means that persons will be conversing 

over a network which cannot guarantee privacy in the same way 

that it is guaranteed over landline systems.’ ” (Flanagan, at 

pp. 775–776, quoting Stats. 1985, ch. 909, § 2, p. 2900.) But 

significantly, the Legislature also declared in the 1985 law that 

“parties to a cellular radio telephone communication have a 

right of privacy in that communication.” (Stats. 1985, ch. 909, 

§ 2, p. 2900.) The Legislature made similar findings and 

declarations when, five years later, it retitled the 1985 law the 
SMITH v. LOANME, INC.

Opinion of the Court by Cantil-Sakauye, C. J.

21

Cordless and Cellular Radio Telephone Privacy Act and 

protected communications involving cordless phones from 

malicious interception and receipt. (Stats. 1990, ch. 696, §§ 1, 2, 

pp. 3267, 3268.) 

The interpretation of section 632.7 we adopt is better 

aligned with these aims and declarations than a narrower 

interpretation would be. Recording a communication without 

the speaker’s consent can implicate significant privacy concerns, 

regardless of whether a party or someone else is performing the 

recording. As we explained in Ribas, supra, 38 Cal.3d at 

pages 360–361, “While one who imparts private information 

risks the betrayal of his confidence by the other party, a 

substantial distinction has been recognized between the 

secondhand repetition of the contents of a conversation and its 

simultaneous dissemination to an unannounced second auditor, 

whether that auditor be a person or mechanical device.” (See 

also Flanagan, supra, 27 Cal.4th at p. 775; Sanders v. American 

Broadcasting Companies (1999) 20 Cal.4th 907, 915.) The

distinction stressed in Ribas owes to the fact that “secret 

monitoring denies the speaker an important aspect of privacy of 

communication — the right to control the nature and extent of 

the firsthand dissemination of his statements.” (Ribas, at 

p. 361; United States v. White (1971) 401 U.S. 745, 787–788 (dis. 

opn. of Harlan, J.) [“[m]uch off-hand exchange is easily forgotten 

and one may count on the obscurity of his remarks, protected by 

the very fact of a limited audience, and the likelihood that the 

listener will either overlook or forget what is said, as well as the 

listener’s inability to reformulate a conversation”]; Van Boven, 

Electronic Surveillance in California: A Study in State 

Legislative Control (1969) 57 Cal. L.Rev. 1182, 1231–1232.) To 

ensure that these concerns are addressed, the state has a 
SMITH v. LOANME, INC.

Opinion of the Court by Cantil-Sakauye, C. J.

22

“strong and continuing interest in the full and vigorous 

application” of laws that vindicate the privacy rights that can be 

compromised when a communication is recorded without 

consent. (Kearney, supra, 39 Cal.4th at p. 125 [discussing 

section 632].) 

LoanMe asserts that these privacy interests would not be 

significantly affected if this court were to adopt the Court of 

Appeal’s construction of section 632.7 because section 632 would 

remain as a backstop, protecting confidential communications 

conducted over a cellular or cordless telephone from being 

electronically recorded without all parties’ consent. The 

fundamental problem with this argument is not necessarily that 

it is incorrect — the question of section 632’s precise scope not 

being squarely before us — but that it does not align with the 

Legislature’s intent when it enacted section 632.7. Correctly or 

not, the Legislature that passed Assembly Bill 2465 and added 

section 632.7 to the Penal Code read section 632 differently and

saw a gap in the statutory scheme that left cellular and cordless 

communications unprotected. This perceived hole would be 

adequately filled only if section 632.7 is construed as prohibiting

the intentional recording of these communications absent the 

consent of all parties, without regard to whether the recording

is performed by a party or by someone other than a party. 

F. LoanMe’s Absurdity Argument Fails

Echoing the Court of Appeal below, LoanMe also argues 

that section 632.7 should not be interpreted as imposing liability 

on parties “on the basis of pure happenstance.” (Smith, supra, 

43 Cal.App.5th at p. 853.) As LoanMe puts it, “[h]ad Smith 

answered on a landline phone, section 632.7 could not apply 

under any interpretation had LoanMe been using a landline too. 
SMITH v. LOANME, INC.

Opinion of the Court by Cantil-Sakauye, C. J.

23

But because of the happenstance that Smith allegedly answered 

LoanMe’s call on a cordless phone, section 632.7 subjects 

LoanMe to criminal and civil liability.” As had the Court of 

Appeal (Smith, at p. 853), LoanMe characterizes this result as 

“absurd.” 

This argument gives short shrift to section 632.7’s

complementary role in a larger statutory scheme. It is true that 

section 632.7 does not apply when all parties to a 

communication use landline phones. But section 632, which

prohibits the use of an electronic device to intentionally record 

without proper consent “confidential communications” 

transmitted between such phones, frequently will apply to such 

a conversation. As construed in Flanagan, supra, 27 Cal.4th at 

page 768, section 632’s protections adhere to communications in 

which a party has “an objectively reasonable expectation that 

the conversation is not being overheard or recorded.” When one 

juxtaposes section 632’s coverage, so defined, against that of 

section 632.7, it becomes apparent that as a practical matter the 

kind of phone used to receive a call will commonly make no 

difference in determining whether a caller is liable under some 

portion of the statutory scheme for recording a call without the

consent of all parties.

Concededly, a discrepancy may exist between section 632’s 

coverage and that of section 632.7 in situations where a 

communication is not confidential. Yet this difference, whatever 

it may be in practical terms today in light of current privacy 

expectations (see Flanagan, supra, 27 Cal.4th at p. 768), owes 

to the Legislature’s apparent sense, decades ago, that cellular 

and cordless communications were incapable of being cast as 

confidential. Moreover, any perceived harshness in applying 

section 632.7 to a party’s recordation of a nonconfidential 
SMITH v. LOANME, INC.

Opinion of the Court by Cantil-Sakauye, C. J.

24

communication is lessened by the fact that a party can avoid 

liability under the statute by taking reasonable precautions, 

such as obtaining the consent to record the statute requires. In 

this respect, LoanMe’s absurdity argument resembles a position

we rejected in Kearney, supra, 39 Cal.4th 95, in which we 

determined that section 632 applied prospectively to phone calls 

between the Georgia branch of a national brokerage firm and 

the firm’s California clients. (Kearney, at pp. 100–101.) In 

Kearney, we responded to the defendant’s concern that someone 

who received a call in Georgia would not necessarily know 

whether a caller was in California, and hence whether 

California law applied to the call. (Id., at p. 127.) We observed

that “there would appear to be no reason why an [employee of 

the defendant], when answering a call, could not simply inquire 

where the client is calling from.” (Ibid.) Similarly here, a party 

who wants to record a call that may fall within the strictures of 

section 632.7 is hardly in an impossible situation.

10

10 Amici curiae Project Veritas and the Project Veritas 

Action Fund (the Veritas amici) assert that constitutional 

considerations militate in favor of a construction of section 632.7 

as concerned only with recording by nonparties. We do not 

believe any such considerations carry sufficient force here as to 

compel this interpretation. We observe, however, that 

especially insofar as the Veritas amici’s concerns involve section 

632.7’s application to emerging uses of smartphones and similar 

devices, the Legislature has in the past amended the Invasion 

of Privacy Act to better address the use and misuse of new 

technologies. Our sister branch may well take another look at 

the statutory scheme, should legislators believe that further 

updating is warranted. 
SMITH v. LOANME, INC.

Opinion of the Court by Cantil-Sakauye, C. J.

25

G. The Rule of Lenity Does Not Apply Here

LoanMe also argues that the rule of lenity applies here 

and supports an interpretation of section 632.7 as concerned 

only with recording by nonparties to a communication. We 

conclude that the circumstances before us do not justify the 

invocation of this principle. 

The rule of lenity “ ‘generally requires that “ambiguity in 

a criminal statute should be resolved in favor of lenity, giving 

the defendant the benefit of every reasonable doubt on questions 

of interpretation.” ’ ” (People v. Nuckles (2013) 56 Cal.4th 601, 

611.) But “[t]he rule of lenity does not apply every time there 

are two or more reasonable interpretations of a penal statute.” 

(People v. Manzo (2012) 53 Cal.4th 880, 889 (Manzo).) On the 

contrary, this principle applies only “ ‘when “ ‘two reasonable 

interpretations of the same provision stand in relative equipoise

. . . .’ ” ’ ” (Ibid.) 

As in Manzo, supra, 53 Cal.4th at page 889, “We do not 

face that degree of uncertainty in this case” — or, frankly, any 

great uncertainty at all regarding legislative intent. Here, as 

there, “[t]he legislative history, the purpose of the statute, 

general public policy concerns, and logic all favor” the 

interpretation we adopt. (Ibid.) Of even more significance, so 

too does the statutory language. Accordingly, we decline 

LoanMe’s invitation to apply the rule of lenity.11

11 Smith argues that the rule of lenity has no application 

where, as here, a law with potential civil and criminal 

consequences is being invoked only by a civil plaintiff. (But see 

Leocal v. Ashcroft (2004) 543 U.S. 1, 11–12, fn. 8.) Our analysis 

makes it unnecessary to address this argument. 
SMITH v. LOANME, INC.

Opinion of the Court by Cantil-Sakauye, C. J.

26

III. DISPOSITION

We conclude that section 632.7 prohibits parties as well as 

nonparties from intentionally recording a communication 

transmitted between a cellular or cordless phone and another 

device without the consent of all parties to the communication. 

The Court of Appeal did not address LoanMe’s additional 

contentions that its activation of a beep tone gave Smith notice 

that their conversation was being recorded, and that by 

remaining on the call, Smith consented to having the call 

recorded. We reverse the judgment of the Court of Appeal and 

remand the cause to that court for further proceedings 

consistent with our opinion, including consideration of these 

arguments as may be appropriate.

CANTIL-SAKAUYE, C. J.

We Concur:

CORRIGAN, J.

LIU, J.

CUÉLLAR , J.

KRUGER, J.

GROBAN, J.

JENKINS, J.
See next page for addresses and telephone numbers for counsel who argued in Supreme Court.

Name of Opinion Smith v. LoanMe, Inc.

__________________________________________________________________________________

Unpublished Opinion

Original Appeal

Original Proceeding 

Review Granted XX 43 Cal.App.5th 844 

Rehearing Granted

__________________________________________________________________________________

Opinion No. S260391 

Date Filed: April 1, 2021

__________________________________________________________________________________

Court: Superior

County: Riverside 

Judge: Sharon J. Waters 

__________________________________________________________________________________

Counsel:

Law Offices of Todd M. Friedman, Todd M. Friedman, Adrian R. Bacon and Thomas E. Wheeler for 

Plaintiff and Appellant.

F. Paul Bland; DiCello Levitt Gutzler, Amy E. Keller and Justin Hawal for Public Justice, P.C., as Amicus 

Curiae on behalf of Plaintiff and Appellant.

Ignacio Hernández; Megan Iorio and Alan Butler for Consumer Action, Consumer Federation of California 

and Electronic Privacy Information Center as Amici Curiae on behalf of Plaintiff and Appellant.

Finlayson Toffer Roosevelt & Lilly, Michael R. Williams and Jared M. Toffer for Defendant and 

Respondent.

Barr & Klein, Benjamin T. Barr, Stephen R. Klein; Litchfield Cavo and G. David Rubin for Project Veritas 

and Project Veritas Action Fund as Amici Curiae on behalf of Defendant and Respondent.

Akin Gump Strauss Hauer & Feld, Rex S. Heinke, Neal Ross Marder, Jessica M. Weisel and Rebecca A. 

Girolamo for American Medical Response, Inc., as Amicus Curiae on behalf of Defendant and Respondent.

Baker McKenzie, Edward D. Totino and Benjamin W. Turner for Atlantic Credit & Finance, Inc., as 

Amicus Curiae on behalf of Defendant and Respondent.
Counsel who argued in Supreme Court (not intended for publication with opinion):

Adrian Bacon

Law Offices of Todd M. Friedman, P.C.

21550 Oxnard St., Suite 780

Woodland Hills, CA 91367

(866) 598-5042 ext. 648

Jared Toffer

Finlayson Toffer Roosevelt & Lilly LLP

15615 Alton Parkway, Suite 250

Irvine, CA 92618

(949) 759-3810