stating it is “long settled that separate, recurring invasions of the same right 7 can each trigger their own statute of limitations”
How later courts described this case
- stating it is “long settled that separate, recurring invasions of the same right 7 can each trigger their own statute of limitations”
Written by the judges who cited it.
The opinion
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9 UNITED STATES DISTRICT COURT
10 SOUTHERN DISTRICT OF CALIFORNIA
11
12
13 EMIR BALANZAR and CECELIA Case No.: 22-cv-1372-GPC
LAHR, individually and on behalf of
14
others similarly situated,
15
Plaintiffs, ORDER GRANTING DEFENDANT’S
16 MOTION TO DISMISS
17 v.
[ECF No. 11]
18
FIDELITY BROKERAGE SERVICES,
19
LLC,
20
Defendant.
21
22
On September 11, 2022, Plaintiff Cecelia Lahr (“Plaintiff” or “Lahr”)1 filed a
23
putative class action against Defendant Fidelity Brokerage Services, LLC (“Defendant”
24
25
26 1 Emir Balanzar was also included as Plaintiff in the original filing. On November 29,
27 2022, Plaintiff Balanzar filed a Notice of Voluntary Dismissal. ECF No. 13. As such, the
1 or “Fidelity”) alleging violations of the California Invasion of Privacy Act (“CIPA”), Cal.
2 Pen. Code § 637.3. ECF No. 1 (“Compl.”). On November 3, 2022, Defendant filed a
3 Motion to Dismiss. ECF No. 11. On December 2, 2022, Plaintiff filed a Response, (ECF
4 No. 15), and on December 16, 2022, Defendant filed a Reply, (ECF No. 16). For the
5 reasons below, the Court GRANTS Defendant’s Motion to Dismiss with leave to amend.
6 BACKGROUND
7 Fidelity Brokerage Services, LLC is a broker-dealer offering customers various
8 investment products and services. ECF No. 11-1 at 9.2 Fidelity is registered in Delaware
9 with its principal place of business in Massachusetts. Compl. ¶ 14. Defendant operates
10 thirty-four locations in California. Id. Plaintiff Lahr has been a customer of Defendant
11 since 2017 and is a resident of California. Id. ¶ 13, 38.
12 This action arises out of Fidelity’s “MyVoice” system and its alleged violation of
13 CIPA, specifically § 637.3. Section 637.3 prohibits any person or entity in California
14 from using “any system which examines or records in any manner voice prints or other
15 voice stress patterns of another person to determine the truth or falsity of statements made
16 by such person without his or her express written consent given in advance of the
17 examination or recordation.” Id. ¶ 59 (quoting Cal. Penal Code § 637.3(a)). Plaintiff
18 alleges that MyVoice “examine[s] the voice of anyone that calls [Defendant] to determine
19 the truth or falsity of the callers’ statements” and operates without the express, written
20 consent of customers. Id. ¶¶ 2, 9.
21
22
23
24
Court will refer to Plaintiff Lahr as the sole Plaintiff in the pending action. Defendant’s
25 argument Balanzar lacks standing because Balanzar has never been enrolled in MyVoice
is moot. ECF No. 11-1 at 13-14.
26
2 The page number citations refer to CM/ECF pagination.
27
1 Fidelity’s MyVoice system creates a “biometric voice print” of a caller, which is
2 saved and used to verify the caller’s identity. Id. ¶ 3, 6. According to Fidelity’s website,
3 the voiceprint is an encrypted digital representation (not a recording) that is “a
4 combination of your physical and behavioral voice patterns. Like a fingerprint, it’s
5 unique to you.” Id. ¶ 6 (citing FIDELITY MYVOICE,
6 https://www.fidelity.com/security/fidelity-myvoice/overview). MyVoice is intended to
7 obfuscate the need for PINs or passwords because “[t]hrough natural conversation,
8 MyVoice will detect and verify your voiceprint in the first few moments of the call.” Id.
9 Plaintiff alleges the technology works by “(1) making a recording of the initial call with
10 the customer (2) examining that recording to identify specific stress patterns and other
11 characteristics to create a ‘voice print’ which is entered into a database then (3)
12 examining all subsequent calls from that consumer and comparing the voice prints to
13 those already on file for that consumer.” Id. ¶ 32.
14 Plaintiff alleges Defendant performs voice analysis on any individual that calls,
15 regardless of whether they provide express, written consent, and that MyVoice was in use
16 “years prior to publishing its existence and seeking enrollment.” Id. ¶ 7-9. Plaintiff states
17 Defendant began recording voiceprints no later than 2017. Id. ¶ 24 (citing Fred Imbert,
18 Stock Trading Using Just Your Voice is Not Too Far Away, CNBC,
19 https://www.cnbc.com/2017/11/22/sandler-oneill-you-may-soon-be-able-to-trade-stocks-
20 with-your-voice.html). Plaintiff alleges Fidelity’s website first advertised the use of the
21 MyVoice system around May 2018, and Fidelity did not add a disclaimer to its terms and
22 conditions about the use of MyVoice until January 2021. Id. ¶ 26-27. Plaintiff claims that
23 she and class members “were unaware of the new terms and never expressly agreed to
24 them in writing as required by CIPA.” Id. ¶ 31. The Complaint further alleges that any
25 express consent from customers is provided over the phone, which does not satisfy
26 CIPA’s requirement of written consent. Id. ¶ 10.
27
1 Plaintiff brings this action on behalf of a putative class defined as “[a]ll residents
2 of the State of California that had their voice prints or other voice stress patterns
3 examined or recorded by Defendant to determine the truth or falsity of their statements.”
4 Id. ¶ 38, 51. Plaintiff seeks injunctive and equitable relief and damages in the amount of
5 $1,000 for each CIPA violation. Id. ¶ 66.
6 LEGAL STANDARD
7 Federal Rule of Civil Procedure (“Rule”) 12(b)(6) permits dismissal for failure to
8 state a claim upon which relief can be granted. Fed. R. Civ. P. 12(b)(6). Rule 8(a)(2)
9 states that a pleading must contain “a short and plain statement of the claim showing that
10 the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). A plaintiff is not required to
11 provide “detailed factual allegations,” but the plaintiff must plead sufficient facts that, if
12 accepted as true, “raise a right to relief above the speculative level.” Bell Atlantic Corp. v.
13 Twombly, 550 U.S. 544, 545 (2007). A complaint will survive a motion to dismiss when
14 it contains enough facts to “state a claim to relief that is plausible on its face.” Ashcroft v.
15 Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 570). A claim is plausible
16 when the factual allegations permit “the court to draw the reasonable inference that the
17 defendant is liable for the misconduct charged.” Iqbal, 556 U.S. at 678.
18 A Court is required to view the Complaint in a “light most favorable to the
19 [Plaintiff], accepting all well-pleaded factual allegations as true, as well as any reasonable
20 inferences drawn from them.” Johnson v. Riverside Healthcare Sys., LP, 534 F.3d 1116,
21 1122 (9th Cir. 2008). However, the Court is not required to accept as true “allegations
22 that are merely conclusory, unwarranted deductions of fact, or unreasonable inferences.”
23 In re Gilead Scis. Sec. Litig., 536 F.3d 1049, 1055 (9th Cir. 2008).
24 DISCUSSION
25 Defendant raises a number of arguments in its Motion to Dismiss. As a threshold
26 matter, Defendant argues that (1) Fidelity’s customer account agreement includes a
27
1 Massachusetts choice-of-law provision that precludes this claim under CIPA; and (2)
2 Plaintiff provided express, written consent for MyVoice when she accepted the customer
3 agreement. ECF No. 11-1 at 26. Defendant also argues that CIPA’s one-year statute of
4 limitations bars this action because the action was filed more than a year after Plaintiff
5 provided consent when she opened a new Fidelity account on November 25, 2020 and
6 accepted the terms of service. Id. at 28-30.
7 Next, Defendant argues that § 637.3 “does not regulate the use of biometric
8 voiceprints for purposes of customer identification.” Id. at 15. Defendant states that §
9 637.3 “proscribes the analysis of ‘voice stress patterns’ for the narrow purpose of
10 determining ‘the truth or falsity’ of a speaker’s statements (absent express written
11 consent),” in essence § 637.3 regulates the use of voiceprints for lie detection rather than
12 the use of voiceprints to determine a speaker’s identity. Id. Further, Defendant argues
13 Plaintiff fails to state a claim under § 637.3 because the provision requires the challenged
14 conduct to have occurred in the state. Id. at 24. They argue that because Plaintiff did not
15 allege Fidelity operated the MyVoice system in California, there is no claim under §
16 637.3. Id. at 25. The Court addresses these arguments in turn.
17
I. Request for Judicial Notice
18
19 In support of its Motion to Dismiss, Fidelity requests the Court take judicial notice
20 of the existence and contents of the legislative history of Cal. Penal Code § 637.3,
21 attached as “Exhibit B” to ECF No. 11-3. ECF No. 11-4. Plaintiff does not oppose this
22 request. ECF No. 15 at 6 n.2. Accordingly, the Court takes judicial notice of these
23 documents.
24
II. Applicable Law
25
Fidelity argues that Plaintiff’s customer account agreement includes a
26
Massachusetts choice-of-law provision and thus bars her from bringing this claim under
27
1 CIPA. Id. at 27. Plaintiff responds that this choice-of-law provision applies only “‘to the
2 interpretation and construction’ (as well as enforcement) of the contractual terms of the
3 Customer Account Agreement,” and that this dispute is not related to the contractual
4 terms. ECF No. 15 at 9-10. The relevant provision reads:
5
This agreement and its enforcement are governed by the laws
6
of the Commonwealth of Massachusetts, except with respect
7 to its conflicts-of-law provisions.
All transactions through Fidelity are subject to the rules and
8
customs of the marketplace where they are executed, as well as
9 applicable state and federal laws. In addition, the services below
are subject to the following laws and policies:
10
• Securities trades: any Fidelity trading policies and
11 limitations that are in effect at the time
• Online services: the license or usage terms posted online
12
• Checkwriting: the applicable provisions of the Uniform
13 Commercial Code and the terms governing the service
14
ECF No. 11-2 (“Brown Decl.”), Exh. 1 at 18; Exh. 2 at 37.
15
The Ninth Circuit in Dollar Systems, Inc. v. Avcar Leasing Systems, Inc., 890 F.2d
16
165 (9th Cir. 1989), held that a franchise agreement with a choice-of-law provision
17
stating, “[t]his agreement shall be construed in accordance with the laws of the state of
18
the Licensee’s Operating Locality” meant the choice-of-law provision only governed “the
19
construction or interpretation of the franchise agreement itself.” Dollar Sys., Inc. v. Avcar
20
Leasing Sys., Inc., 890 F.2d 165, 171 (9th Cir. 1989). Because plaintiff’s claim in Dollar
21
Systems did not turn on the construction or interpretation of the license agreement, the
22
Ninth Circuit found the choice-of-law provision was inapplicable. Id.; see also Yan Guo
23
v. Kyani, Inc., 311 F. Supp. 3d 1130, 1145-46 (C.D. Cal. 2018) (finding that a provision
24
stating an “[a]greement shall be governed exclusively by the laws of the State of Idaho”
25
meant the choice-of-law provision applied “only to the interpretation and construction” of
26
the agreement itself and does not “bar the statutory claims Plaintiffs advance under
27
1 California law”). Courts in this Circuit have applied this same approach to choice-of-law
2 provisions in consumer agreements. See e.g., In re Sony Gaming Networks and Customer
3 Data Sec. Breach Litig., 903 F. Supp. 2d 942, 965 (S.D. Cal. Oct. 11, 2012). Courts have
4 held that choice-of-law provisions relating only to the “construction and interpretation”
5 of a consumer contract do not apply to “non-contractual claims asserted under
6 California’s [] statutes.” Id.
7 The Dollar Systems choice-of-law provision is similar to Fidelity’s choice-of-law
8 provision. Fidelity’s provision reads, “[t]his Agreement and its enforcement are governed
9 by the laws of the Commonwealth of Massachusetts . . . .” Brown Decl., Exh. 1 at 18;
10 Exh. 2 at 37. The natural reading of Fidelity’s provision is that only actions brought
11 pursuant to the agreement are intended to be governed by Massachusetts law, i.e., the
12 choice-of-law provision is meant to apply only in actions concerning the interpretation,
13 construction, and enforcement of the contractual terms of the customer account
14 agreement. The choice-of-law provision does not apply to “non-contractual claims”
15 asserted under a California privacy statute. In re Sony, 903 F. Supp. at 965. The fact that
16 the CIPA cause of action loosely relates to the customer account agreement because the
17 MyVoice technology is simply mentioned in the agreement is not enough. Plaintiff’s
18 CIPA claim is not brought pursuant to contract law and is not sufficiently related to the
19 customer account agreement. Thus, the Court finds the Massachusetts law does not apply.
20
III. Plaintiff’s Consent
21
22 Defendant next argues that Plaintiff fails to plead a claim because “she provided
23 express written consent to the terms of Fidelity’s customer account agreement” and §
24 637.3 only prohibits recordation of a voiceprint absent express written consent. ECF No.
25 11-1 at 28. Defendant states Lahr provided the statutorily required consent when she
26 opened a Fidelity account on November 25, 2020 and electronically accepted the terms of
27
1 the customer account agreement. Id. Plaintiff responds that the agreement’s disclosure of
2 the MyVoice program in the terms and conditions simply “advertises the existence of the
3 MyVoice program” and does not meet the consent standard. ECF No. 15 at 16. Any
4 disclosure in the customer account agreement is further complicated by the fact that, in
5 other places, Defendant seems to suggest that customers must affirmatively enroll in the
6 MyVoice system. See e.g., ECF No. 11-3 (“Edwards Decl.”), Exh. A at 6 (“How do I
7 enroll in Fidelity MyVoice? As a Fidelity customer, the next time you call, a
8 representative will offer to enroll you.”).
9 The Court agrees with Plaintiff that the question of whether Fidelity received the
10 statutorily required consent is a factual question not appropriate for resolution at the
11 Motion to Dismiss stage. Plaintiff’s Complaint does not allege any facts tending to show
12 she provided express, written consent upon opening a new account. For example, her
13 Complaint does not discuss what materials were in her possession when she opened the
14 2020 account, and what, if any, agreements she had to sign and in what manner any
15 consent was given. See ECF No. 15 at 15 (stating that no where is it stated “that the new
16 Customer Account Agreement was provided to Plaintiff Lahr, that Plaintiff Lahr
17 manifested her consent in any meaningful way, or that she had not been enrolled in the
18 MyVoice Program prior to this purported [2020] disclosure”).
19 At this stage of the proceedings, the Court is required to take the facts alleged in
20 the Complaint as true and to view the facts in the light most favorable to the non-moving
21 party. See Johnson, 534 F.3d at 1122. Plaintiff’s Complaint states that she “did not give
22 consent—written or otherwise—to Defendant to collect voiceprints” and that she was
23 enrolled in the MyVoice program as early as 2017. Compl. ¶¶ 38-40, 45. The Court must
24 accept this as true. Whether Plaintiff provided sufficient written consent in 2020, and
25
26
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1 whether Fidelity was recording voiceprints as early as 2017 absent any consent, is a
2 factual matter that should be resolved following discovery.3
3
IV. CIPA’s One-Year Statute of Limitations
4
5 CIPA is subject to a one-year statute of limitations. Cal. Civ. Proc. Code § 340;
6 Brodsky v. Apple, Inc., 445 F. Supp. 3d 110, 134 (N.D. Cal. 2020) (“Under the CIPA, the
7 applicable statute of limitations is one year.”). Defendant argues that Plaintiff’s claim is
8 barred by the one-year statute of limitations because she did not file suit until September
9 11, 2022, which was more than one year after opening her 2020 account and agreeing to
10 its terms and conditions. ECF No. 11-1 at 29-30. Plaintiff’s Complaint alleges the
11 “delayed discovery” rule tolls the one-year statute of limitations. Compl. ¶ 46. She states
12 she “did not know (and had no way of knowing) that Plaintiffs’ voices were recorded for
13 purposes of creating voice prints, or that Plaintiffs’ voice stress patterns were examined,
14 because Defendant kept this information secret.” Id.
15 “A claim may be dismissed under Rule 12(b)(6) on the ground that it is barred by
16 the applicable statute of limitations only when ‘the running of the statute is apparent on
17 the face of the complaint.’” Von Saher v. Norton Simon Museum of Art at Pasadena, 592
18 F.3d 954, 969 (9th Cir. 2010) (quoting Huynh v. Chase Manhattan Bank, 465 F.3d 992,
19 997 (9th Cir. 2006)). “[A] complaint cannot be dismissed unless it appears beyond doubt
20
21
22
3 Defendant requests that if the Court finds the argument as to whether Lahr provided
23
express, written consent not suitable for resolution on a Rule 12(b)(6) motion, that the
24 Court “convert this portion of its motion to a motion for summary judgment.” ECF No.
11- at 29 n. 11. To convert Defendant’s Motion to Dismiss into a Motion for Summary
25
Judgment, Plaintiff would need to be given an opportunity to present opposing evidence.
26 See Garaux v. Pulley, 739 F.2dd 437, 438 (9th Cir. 1984). The Court declines to engage
in this sort of factual discovery at this stage.
27
1 that the plaintiff can prove no set of facts that would establish the timeliness of the
2 claim.’” Id. (quoting Supermail Cargo, Inc. v. U.S., 68 F.3d 1204, 1206 (9th Cir. 1995)).
3 The Court finds CIPA’s one-year statute of limitations does not bar Plaintiff’s suit
4 at the Motion to Dismiss stage. Separate violations of the same right can each trigger its
5 own statute of limitations period. See Aryeh v. Canon Bus. Sols. Inc., 292 P.3d 871, 880
6 (Cal. 2013) (stating it is “long settled that separate, recurring invasions of the same right
7 can each trigger their own statute of limitations”). Courts in this Circuit have found that a
8 statute’s reference to a singular act (e.g., “communication”) means there is “‘no textual
9 basis for morphing what otherwise would be considered separate violations into a single
10 violation because they flow from a common practice or scheme.’” Calhoun v. Google
11 LLC, 526 F. Supp. 3d 605, 625 (N.D. Cal. Mar. 17, 2021) (quoting Bliss v. CoreCivic,
12 Inc., 978 F.3d 1144, 1148 (9th Cir. 2020)). § 637.3 refers to a singular act, specifically
13 “examination” or “recordation,” as triggering a violation of the penal code provision.
14 Thus, each time an individual is examined by Fidelity’s MyVoice system a potential
15 violation of CIPA occurs.
16 Although Plaintiff does not allege the exact dates in which she placed calls to
17 Fidelity and had her voice examined by the MyVoice system, Plaintiff does allege she
18 has been a customer since 2017 and that over these years she has “called Defendant on
19 numerous occasions.” Compl. ¶ 39. Plaintiff does not need to allege more at this stage
20 because a complaint can only be dismissed as time barred if “‘it appears beyond doubt
21 that the plaintiff can prove no set of facts that would establish the timeliness of the
22 claim.’” Von Saher, 592 F.3d at 969 (quoting Supermail, 68 F.3d at 1206). Plaintiff
23 clearly could prove that she called Fidelity one year prior to the filing of her Complaint.
24 See also Harrison v. Great HealthWorks, Inc., 2017 WL 2554448, at *3 (S.D. Cal. June
25 13, 2017) (finding complaint not time-barred even though the “complaint lack[ed] detail”
26
27
1 and plaintiff had simply alleged the conduct “occurred during the relevant limitations
2 period”).
3 Whether the “delayed discovery” rule tolled the statute of limitations for Plaintiff’s
4 claims that would normally be time-barred (i.e., any alleged CIPA violation prior to
5 September 11, 2021) is a factual question the Court is not prepared to answer at this
6 point. Under California law, the delayed discovery rule applies when a plaintiff
7 demonstrates that “a reasonable investigation at [the] time would not have revealed a
8 factual basis for that particular cause of action.” Fox v. Ethicon Endo-Surgery, Inc., 110
9 P.3d 914, 917 (Cal. 2005). A plaintiff must show that they could not have made an
10 “‘earlier discovery despite reasonable diligence.’” Id. at 921 (quoting McKelvey v. Boeing
11 N. Am., Inc., 74 Cal. App. 4th 151, 160 (Cal. Ct. App. 1999)). Whether Plaintiff exercised
12 reasonable diligence or was alerted to the fact her voiceprint was subject to recordation
13 and examination prior to September 11, 2021 is another question that should be addressed
14 after discovery.4
15 Because Plaintiff is able to prove a set of facts that her voice was examined in
16 violation of CIPA prior to the running of the one-year statute of limitations, the Court
17 does not dismiss Plaintiff’s Complaint on this ground. Although discovery might reveal
18 Plaintiff’s claim is time-barred and/or unmeritorious because she consented to MyVoice
19
20
4 Defendant argues the Court must determine if Plaintiff pled sufficient facts in her
21
Complaint to show applicability of the delayed discovery rule. See ECF No. 11-1 at 30.
22 Plaintiff must only meet the delayed discovery pleading standard when the “‘complaint
shows on its face that [the] claim would be barred without the benefit of the discovery
23
rule.’” Harrison v. Great HealthWorks, Inc., 2017 WL 2554448, at *3 (S.D. Cal. June 13,
24 2017) (quoting Fox v. Ethicon Endo-Surgery, Inc., 110 P.3d 914, 920 (Cal. 2005)). Here,
Plaintiff’s Complaint is not necessarily time-barred without help from the delayed
25
discovery rule. As discussed, each violation of § 637.3 would trigger its own statute of
26 limitations and it is likely Plaintiff has placed a call to Fidelity between September 11,
2021 and the filing of her Complaint.
27
1 via the 2020 customer account agreement, Plaintiff’s Complaint survives the present
2 Motion.
3
V. Plaintiff’s CIPA Claim
4
5 Defendant argues that Plaintiff fails to state a claim under § 637.3 because the
6 penal code provision “does not regulate the use of biometric voiceprints for purposes of
7 customer identification.” ECF No. 11-1. Fidelity argues both the plain text of § 637.3 as
8 well as its legislative history supports finding the provision only regulates the use of
9 voiceprints for the narrow and specific purpose of lie detection. Id. at 16-20. Because
10 MyVoice is not a lie detection system, and is merely a customer identification system,
11 Plaintiff fails to state a claim under the statute. Id. at 16. Defendant also argues that
12 Plaintiff fails to state a claim under § 637.3 because she does not plausibly allege
13 recording or examination occurred in California. Id. at 24. Plaintiff responds that
14 customer identification is inherently lie detection, and that the place of injury was
15 California. ECF No. 15 at 20. Section 637.3 in its entirety reads:
16
(a) No person or entity in this state shall use any system which
17 examines or records in any manner voice prints or other voice
18 stress patterns of another person to determine the truth or
falsity of statements made by such other person without his
19
or her express written consent given in advance of the
20 examination or recordation.
(b) This section shall not apply to any peace officer, as defined in
21
Section 830, while he is carrying out his official duties.
22
(c) Any person who has been injured by a violator of this section
23 may bring an action against the violator for his actual
damages or one thousand dollars ($1,000), whichever is
24
greater.
25
26
27
1 A. MyVoice and § 637.3
2
The Court must determine if § 637.3 only regulates the use of voiceprints to the
3
extent they are used for lie detection, and, if so, whether Plaintiff has plausibly alleged
4
MyVoice is used for lie detection purposes.
5
6 i. Statutory Interpretation
7 It is clear to the Court that § 637.3 is limited in scope to the use of voiceprints “to
8 determine the truth or falsity of statements.” Both Parties agree that, to interpret a statute,
9 the Court must “determine the Legislature’s intent so as to effectuate the law’s purpose.”
10 Brennon B. v. Superior Court, 513 P.3d 971, 977 (Cal. 2022). A court should first
11 examine the statute’s text and its plain meaning; however, California precedent “urges
12 [the court] to look beyond the statutory language to ‘the purpose and history of [§ 637.3]’
13 in order to determine whether ‘the Legislature intended the statute to apply to the conduct
14 of the entit[y] at issue’ here.” Id. (quoting Warfield v. Peninsula Golf & Country Club,
15 896 P.2d 776, 789 (Cal. 1995)). The Court finds both the statute’s plain text and its
16 purpose and history support finding § 637.3 is limited in scope to voiceprint analysis for
17 the specific purpose of determining “the truth or falsity” of a speaker’s statement.5
18
19
20 5 Although the briefing is slightly unclear on this point, Defendant notes the statute’s use
21 of the phrase “voice prints or other voice stress patterns.” ECF No. 11-1 at 16. It seems
Defendant intends to argue that a MyVoice voiceprint is not a type of “voice stress
22 pattern,” and thus Plaintiff’s purported injury is outside the scope of the statute. The
23 Court agrees that the correct interpretation of § 637.3 is that it regulates “voice stress
patterns,” and that a “voiceprint” is a type of “voice stress pattern.” For example, “Next
24 year I intend to visit Disneyland and other theme parks in California,” implies that
25 “Disneyland” is a theme park in California. Similarly, § 637.3’s construction implies that
a voiceprint is a type of voice stress pattern. On this point, it appears Defendant’s
26 argument cuts against itself—MyVoice analyzes a voiceprint, which is a type of voice
27 stress pattern; the statute regulates the recordation and examination of voice stress
1 First, the plain text of § 637.3 unequivocally limits the scope of the statute to the
2 examination or recordation of a voice stress pattern for the purpose of determining “the
3 truth or falsity” of the statement(s). The provision is crystal clear on this point.
4 The legislative history of § 637.3 also supports finding that the statute is intended
5 to regulate voiceprint analysis for the narrow purpose of lie detection, and that its use
6 should not extend beyond this purpose. ECF No. 11-1 at 17; see generally Edwards Decl.
7 Exh. B. The Enrolled Bill Memorandum for AB 2798 states:
8 Existing law prohibits employers from demanding or requiring
that any employee or any applicant for employment or
9
prospective employment submit to or take a test involving
10 psychological stress evaluators, including polygraphs, lie
detectors or similar tests or examinations, as a condition of
11
employment or continued employment, but does not prohibit
12 employers or others from utilizing a psychological stress
evaluator to analyze voice prints or other voice stress patterns of
13
a person to determine the truth or falsity of statements made by
14 such person . . .
15
This bill would prohibit any person or entity, other than a peace
16 officer carrying out his official duties, from using any system
which examines or records in any manner voice prints or other
17
voice stress patterns of any other person to determine the truth or
18 falsity of such other person without his or her express consent
given in advance.
19
20
21
22
23
24 patterns, so the statute is applicable. In addition, Plaintiff plausibly alleges that a
voiceprint is a type of voice stress pattern, and this is the Court’s singular focus at this
25
point. See Compl. ¶¶ 33-34 (discussing the stress patterns analyzed and stating
26 “Defendant analyzes unique acoustic and behavioral features of a caller’s voice,
including stress patterns . . . .”).
27
1 ECF No. 11-3 at 19 (Edwards Decl.) (emphasis added); see also id. at 24 (letter from
2 assemblyman Richard Lehman to California Governor Brown stating “[t]here must be
3 strict statutes regarding the use of these modified lie detectors by private citizens”).
4 In addition, it appears that an accompanying concern behind the passage of § 637.3
5 was a view that the use of voiceprints for lie detection purposes in the 1970s was not
6 accurate or trustworthy. The Assembly Committee on Labor, Employment, and
7 Consumer Affairs held a hearing in May 1978 on “polygraph and related machines (such
8 as stress analyzers) at which there was expert testimony of the accuracy of such
9 machines. Testimony indicated that in many cases, persons are under stress for reasons
10 other than telling a lie and voice stress analyzers would pick this up as a lie.” ECF No.
11 11-3 at 28. Meanwhile, the legislative history does not reveal any concern for consumer
12 privacy over their biometric data, as Plaintiff argues. See e.g., Compl. ¶ 18, 21. Instead,
13 the legislature was concerned a statement might be inaccurately and surreptitiously
14 classified as a lie and later used against an individual without their knowledge or consent.
15 Here, Plaintiff’s concern with the MyVoice system is not that it might inaccurately detect
16 a lie—Plaintiff argues more generally that MyVoice is an invasion of privacy. See id.
17 In conclusion, it is apparent that the primary motivation behind the passage of §
18 637.3 was the lack of regulation on the use of “psychological stress evaluator[s]” to
19 analyze voiceprints to determine the truth or falsity of a speaker’s statements where the
20 evaluators were prone to inaccuracy. Thus, the Court finds that § 637.3 only prohibits the
21 use of voice stress analysis or voiceprints for lie detection.
22 ii. MyVoice as Lie Detector
23
Next, the Court addresses whether the MyVoice authentication system operates as
24
a lie detector with the specific purpose of determining “the truth or falsity” of a speaker’s
25
statement. Plaintiff alleges that MyVoice “is very similar to a Polygraph Test” and “uses
26
the full audio of a call to determine its characteristics, meaning Defendant analyzes
27
1 unique acoustic and behavioral features of a caller’s voice, including stress patterns to
2 determine truth or falsity of statements.” Compl. ¶ 34. Plaintiff specifically alleges that
3 MyVoice is innately designed to prove the “truth or falsity” of a particular statement,
4 namely that accountholders are who they claim to be. Compl. at ¶ 64; ECF No. 15 at 20.
5 Defendant responds that the authentication process does not rely upon a speaker
6 identifying themselves, that is, that the comparison involved in the authentication does
7 not turn on the truth or falsity of anything the speaker says. Edwards Decl., Ex. A.
8 Instead, “[t]hrough natural conversation, MyVoice will detect and verify your
9 voiceprint*” Id. at 4. The Court agrees. MyVoice does not require a caller to claim they
10 are the account holder or to make any other claim or affirmative statement. According to
11 the MyVoice FAQs upon which the Complaint heavily relies, the “natural conversation”
12 of the caller is examined and compared to the known voiceprint that is maintained by
13 Fidelity. The MyVoice voiceprint essentially acts as a passcode. Rather than a customer
14 inputting a four-digit pin or signing into an account using facial or fingerprint
15 recognition, a customer can simply call Fidelity and have their voiceprint analyzed and
16 recognized. As described and alleged in the Complaint, MyVoice is nothing more than a
17 biometric passcode and is not a lie detector.
18 Other than the conclusory claims that MyVoice operates as a lie detector, Plaintiff
19 has failed to plausibly allege that MyVoice is designed “to determine the truth or falsity
20 of statements.” As a result, the Court GRANTS the motion to dismiss with leave to
21 amend to address the deficiencies discussed above, if possible.
22
iii. California-Based Conduct
23
24 § 637.3 limits its geographic scope to California and states that “[n]o person or
25 entity in this state shall use any system which examines or records in any manner voice
26 prints or other voice stress patterns . . . .” Cal. Penal Code § 637.3 (emphasis added).
27
1 || Defendant argues that Plaintiff's claim must fail because she did not allege that Fidelity’s
2 || voiceprint recordation or examination took place in California. ECF No. 11-1 at 24. Ina
3 || footnote, Defendant states that “[w]Jere the case to proceed to discovery, the evidence
4 || would show that Fidelity does not examine or record voice stress patterns in California,
5 || because the personnel, servers, and systems that Fidelity uses to operate MyVoice are all
6 || located elsewhere.” ECF No. 11-1 at 25 n.8.
7 This is largely a factual question better suited to later stages of litigation.
8 || Plaintiff's Complaint states that Fidelity has “thirty-four (34) locations in California.”
9 ||Compl. 14. It is a reasonable inference for the Court to make that any phone call
10 || Plaintiff makes to any one of these locations in California would involve the use of the
11 ||MyVoice system in the state of California. The Court DENIES the motion to dismiss
12 || based on the scope of § 637.3.
13 CONCLUSION
14 For the reasons stated above, the Court GRANTS Defendant’s Motion to Dismiss
15 || with leave to amend. Should Plaintiff choose to file a First Amended Complaint, she must
16 || file it on or before March 1, 2023.
17 IT IS SO ORDERED.
18
19 Dated: February 3, 2023 2 aaho Ox
0 Hon. Gonzalo P. Curiel
United States District Judge
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28 22-cv-1372-GPC