FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

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

D.C. No.

3:11-cv-00968-JSW

OPINION

Appeal from the United States District Court

for the Northern District of California

Jeffrey S. White, District Judge, Presiding

Argued and Submitted

November 5, 2012—San Francisco, California

Filed January 17, 2013
2 FAULKNER V. ADT SECURITY SERVICES, INC.

The Honorable Robert D. Sack, Senior Circuit Judge for the U.S. Court *

of Appeals for the Second Circuit, sitting by designation.

 This summary constitutes no part of the opinion of the court. It has

**

been prepared by court staff for the convenience of the reader.

Before: Robert D. Sack, Ronald M. Gould, *

and Milan D. Smith, Jr., Circuit Judges.

Opinion by Judge Sack

SUMMARY

**

California Invasion of Privacy Act

The panel remanded to the district court to give the

plaintiff an opportunity to seek to amend his complaint to

successfully plead a cause of action under California’s

invasion of privacy law.

The complaint was filed in a California state court

governed by state procedural rules, and removed to federal

court on diversity of citizenship grounds. The panel agreed

with the district court that the complaint failed to state a

plausible claim under California’s Invasion of Privacy Act,

but the panel remanded to allow plaintiff to amend to attempt

to successfully plead a cause of action under the federal

standards set forth in Ashcroft v. Iqbal, 556 U.S. 662 (2009),

and Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007). 
FAULKNER V. ADT SECURITY SERVICES, INC. 3

COUNSEL

Gretchen Carpenter (argued), Strange & Carpenter, Los

Angeles, California, for Plaintiff-Appellant.

Robert Hickok, pro hac vice (argued), Pepper Hamilton LLP,

Philadelphia, Pennsylvania, for Defendants-Appellees.

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 (2009), and Bell Atlantic Corp. v.

Twombly, 550 U.S. 544 (2007).
4 FAULKNER V. ADT SECURITY SERVICES, INC.

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
FAULKNER V. ADT SECURITY SERVICES, INC. 5

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 . . . .” 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

grounds that the nature of ADT’s business and the character

of the call would not alone provide for such an objectively

reasonable expectation. Id. at *10–11, 2011 WL 1812744, at

*3–4. The court therefore granted ADT’s motion to dismiss

the complaint with prejudice. Faulkner appeals.
6 FAULKNER V. ADT SECURITY SERVICES, INC.

JURISDICTION AND STANDARD OF REVIEW

We have jurisdiction to hear Faulkner’s appeal under

28 U.S.C. § 1291 because the judgment from which he

appeals is a “final decision[] of the district court[.]” We

review de novo the district court’s order granting a motion to

dismiss for failure to state a claim under Federal Rule of Civil

Procedure 12(b)(6). Cousins v. Lockyer, 568 F.3d 1063, 1067

(9th Cir. 2009). All well-pleaded allegations of material fact

in the complaint are accepted as true and are construed in the

light most favorable to the non-moving party. Manzarek v.

St. Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1031 (9th

Cir. 2008); Warshaw v. Xoma Corp., 74 F.3d 955, 957 (9th

Cir. 1996). To survive a motion to dismiss, a complaint must

allege “enough facts to state a claim to relief that is plausible

on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570

(2007); see also Moss v. U.S. Secret Serv., 572 F.3d 962, 969

(9th Cir. 2009). A claim has facial plausibility when “the

plaintiff pleads factual content that allows the court to draw

the reasonable inference that the defendant is liable for the

misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678

(2009).

DISCUSSION

California’s Invasion of Privacy Act provides, in relevant

part, that “[e]very person who, intentionally and without the

consent of all parties to a confidential communication, by

means of any electronic amplifying or recording device . . .

records the confidential communication” violates the statute.

Cal. Penal Code § 632(a). The statute also provides, in

Section 632(c), that “[t]he term ‘confidential communication’

includes any communication carried on in circumstances as

may reasonably indicate that any party to the communication
FAULKNER V. ADT SECURITY SERVICES, INC. 7

desires it to be confined to the parties thereto . . . .” Id.

§ 632(c). The statute does not reach a communication made

“in any other circumstance in which the parties to the

communication may reasonably expect that the

communication may be overheard or recorded.” Id.

The California Supreme Court has concluded that a

conversation is confidential within the meaning of Section

632 “if a party to that conversation has an objectively

reasonable expectation that the conversation is not being

overheard or recorded.” Kearney v. Salomon Smith Barney,

Inc., 39 Cal. 4th 95, 117 n.7 (2006) (quoting Flanagan v.

Flanagan, 27 Cal. 4th 766, 776–77 (2002)). The standard of

confidentiality is “an objective one defined in terms of

reasonableness.” Frio v. Superior Court, 203 Cal. App. 3d

1480, 1488 (1988).

In the context of a business-related telephone call, courts

have looked to the circumstances surrounding the call to

divine whether the standard has been met, including the

“nature of [the defendant’s] business and the character of the

communications.” Flanagan, 27 Cal. 4th at 772 (citing Frio,

203 Cal. App. 3d at 1489–90). For example, the Court of

Appeal in Frio, considering calls between a record producer

and his clients, concluded that the communications were

confidential because “[a]ll the telephone communications

were conducted on a one-on-one basis and related to a

profitable venture which the speaker reasonably might expect

would be confined to the parties.” 203 Cal. App. 3d at

1489–90. It observed that the communication included

“market data [and] business strategy,” was “sensitive,” and

was “personal . . . among the parties.” Id. The Court of

Appeal concluded that there was “a reasonable expectation by
8 FAULKNER V. ADT SECURITY SERVICES, INC.

one of the parties that no one [was] . . . overhearing the

conversation.” Id. at 1490.

To prevail against the Rule 12(b)(6) motion, then,

Faulkner would have to allege facts that would lead to the

plausible inference that his was a confidential communication

– that is, a communication that he had an objectively

reasonable expectation was not being recorded. Faulkner’s

complaint, at least in its present form, does not do so. 

Faulkner’s complaint contains two allegations concerning

the confidentiality of his communications with ADT. First,

he alleges that he called ADT to “dispute a charge.” Pl.’s

Compl. ¶ 10. Second, he states that his conversation was

confidential because it was “carried on in circumstances as

may reasonably indicate that any party to the communication

desires it to be confined thereto.” Id. ¶ 27. The latter of these

allegations is no more than a “[t]hreadbare recital[]” of the

language of Section 632, precisely the kind that Iqbal

prohibits. Iqbal, 556 U.S. at 678. Under Iqbal, such bald

legal conclusions are not entitled to be accepted as true and

thus “do not suffice” to prevail over a motion to dismiss. Id.

Nor is the former allegation, that Faulkner called to

dispute a charge, sufficient to lead to the plausible inference

that he had an objectively reasonable expectation of

confidentiality. Although circumstances may arise under

which the nature of the relationship or the character of the

communications between a customer and a home security

company could plausibly constitute a confidential

communication under the California statute, here, the detail

that Faulkner alleges is merely consistent with such a
FAULKNER V. ADT SECURITY SERVICES, INC. 9

 ADT argues that dismissal was properly granted because a consumer ***

call to a home security company can never constitute a confidential

communication within the meaning of California Penal Code § 632. We

disagree. There is nothing inherently non-confidential about a billing

dispute with a home security company. For example, a caller might be

asked to verify his identity by confirming his social security number or his

unlisted telephone number, or to disclose other private or potentially

private information. If adequately pled, such facts might well support a

finding of confidentiality.

conclusion. In other words, too little is asserted in the ***

complaint about the particular relationship between the

parties, and the particular circumstances of the call, to lead to

the plausible conclusion that an objectively reasonable

expectation of confidentiality would have attended such a

communication. Faulkner has therefore failed to “nudge[]”

his claim “from conceivable to plausible.” Id. at 680 (internal

citations and quotation marks omitted). His complaint cannot

survive ADT’s Rule 12(b)(6) motion.

Faulkner’s complaint was filed in a California State

court, which is, of course, governed by state procedural rules.

The action, along with the complaint, was then removed to

federal court, as noted, on diversity of citizenship grounds.

It is under the Federal Rules of Civil Procedure, as interpreted

by the Supreme Court, that the motion to dismiss was

properly granted. See Kearns v. Ford Motor Co., 567 F.3d

1120, 1125 (9th Cir. 2009) (applying federal pleading rules,

and noting that “[i]t is well-settled that the Federal Rules of

Civil Procedure apply in federal court, irrespective of the

source of the subject matter jurisdiction, and irrespective of

whether the substantive law at issue is state or federal”)

(internal quotation marks omitted)). In an abundance –

perhaps an overabundance – of caution we remand this case

to the district court for it to consider allowing the plaintiff to
10 FAULKNER V. ADT SECURITY SERVICES, INC.

amend his complaint in a manner that would satisfy federal

pleading standards.

REMANDED.