Title: Smith v. LoanMe, Inc.
Citation: N/A
Docket Number: S260391
State: California
Issuer: California Supreme Court
Date: April 1, 2021

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)),1 it 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 
SMITH v. LOANME, INC. 
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.  
SMITH v. LOANME, INC. 
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. 
SMITH v. LOANME, INC. 
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 
SMITH v. LOANME, INC. 
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, 
SMITH v. LOANME, INC. 
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.) 
SMITH v. LOANME, INC. 
Opinion of the Court by Cantil-Sakauye, C. J. 
 
17 
 
telephones and inherently, less secure (or more public) non-
traditional 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 non-
malicious 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