Troyer v. The Yerba Mate Co., LLP

Background

Casey Troyer brought a putative class action against The Yerba Mate Co., LLC and Guayaki Sustainable Rainforest Products, Inc. He alleged violations of California wage-and-hour laws, California’s Unfair Competition law, and Section 632 of the California Penal Code. The order addressed only his claim that defendants intentionally recorded a confidential conversation without the consent of all parties.

The court had previously dismissed that claim because Troyer’s second amended complaint did not plausibly allege that a confidential communication had occurred. The court invited him to seek permission to amend and explain how a new complaint would correct the deficiencies.

Leave to Amend

The court explained that amendment would be futile if the proposed complaint failed to state a legally sufficient claim. Under the pleading standard, the court accepted well-pleaded factual allegations as true and drew reasonable inferences for Troyer.

The proposed third amended complaint alleged that a surveillance device was mounted 12 to 14 feet above the warehouse floor near the entrance, had been placed at senior management’s direction, and recorded conversations clearly enough to be understood. Troyer allegedly did not know the device recorded audio, saw no signs warning of a listening device, and could not reasonably tell from the ground that it recorded sound.

The proposed complaint further alleged that, during Troyer’s first two weeks of employment, he spoke with a coworker at 6:00 a.m. in the warehouse, when no supervisors or managers had arrived and no other employees were nearby. He allegedly complained that certain working conditions were dangerous, and the surveillance device recorded the conversation.

The court disregarded allegations describing defendants’ knowledge or intent in conclusory terms. Even without those conclusions, however, it held that the factual allegations plausibly supported a claim that defendants knew with substantial certainty that the device would record a confidential conversation. The allegations also plausibly showed that Troyer reasonably expected the conversation to remain private because he spoke only with his coworker, no one else was nearby, and he did not know the device recorded audio.

The court rejected defendants’ argument that an employee can never reasonably expect privacy in a shared workplace where an apparently visible video camera is present. It distinguished a prior decision involving a telephone call in an open workspace where others were likely to be present. The court also found a decision applying Arizona law inapplicable because California law provides greater protection for oral communications. It emphasized that whether a conversation was private is a fact-dependent question generally unsuitable for resolution on a motion to dismiss.

The court also rejected the argument that Troyer should not receive another amendment because he had already failed to state the claim three times. The court stated that there is no fixed rule limiting a plaintiff to three attempts. It addressed defendants’ claimed prejudice by stating that no further motions under Rule 12 would be allowed because the previous motion practice had served that purpose.

Motion to Strike Class Allegations

Defendants had previously moved, as an alternative to dismissal, to strike the class allegations connected to the Section 632 claim. Because the proposed third amended complaint sufficiently stated the claim, the court held that questions about whether the claim could proceed as a class action and what the proposed class should be were better addressed in a later motion under Federal Rule of Civil Procedure 23, after a reasonable period of discovery.

Disposition

The court granted Troyer’s motion for leave to file a third amended complaint and denied defendants’ motion to strike the class allegations. The court stated that the proposed complaint sufficiently stated a claim under Section 632. Troyer was ordered to file the third amended complaint within seven days, and defendants’ answer was due 14 calendar days afterward.