Turner v. Microsoft Corporation

Background

The case arose from two separately filed proposed class actions. The court later consolidated them, and the plaintiffs filed a consolidated amended complaint. Dana Turner, Smith, and Youshei alleged that Nuance’s Gatekeeper software recorded calls made to Chase, created biometric voice prints from the plaintiffs’ voices, stored those voice prints, and analyzed later calls. They alleged that neither Nuance nor Chase adequately disclosed Nuance’s involvement and that they did not consent to the recording or analysis.

The plaintiffs asserted claims under California Penal Code sections 631(a), 632(a), and 637.3. They sought declaratory relief, an order requiring changes in conduct, and damages on behalf of a proposed statewide class of California residents whose voice prints, voice stress patterns, or other conversation elements were recorded and examined by Nuance without prior written consent.

Rule 12(b)(6) standard and consent

Nuance moved to dismiss under Federal Rule of Civil Procedure 12(b)(6), which tests whether a complaint alleges enough facts and a legally recognized theory of liability. The court generally must accept the complaint’s factual allegations as true at this stage.

Nuance asked the court to consider deposit-account agreements and signature cards from Chase’s records as evidence that the plaintiffs had consented. The court denied Nuance’s request for judicial notice and declined to treat those documents as part of the complaint. The complaint did not rely on the deposit-account agreements, and the court found that the consent issue involved a factual dispute unsuitable for resolution at the pleading stage. The court therefore denied the motion to dismiss based on consent.

Sections 631 and 632: third-party issue

The court explained that section 631 generally imposes liability on an unauthorized third party that intercepts a communication, while the eavesdropping portion of section 632 also requires a third party. The court adopted the reasoning that a software provider may qualify as a third party when it has the capability to use recorded information for purposes beyond merely furnishing it to the client.

The plaintiffs alleged that Nuance created voice prints, enrolled them in a database, compared later callers’ voices against saved prints, and used artificial intelligence to analyze voices and make authentication and fraud-risk assessments. The court held that these allegations supported a reasonable inference that Nuance could use the recorded data for purposes other than sending it back to Chase, including improving its own products and services. The court therefore found that the plaintiffs adequately alleged that Nuance was an independent third party and denied the motion to dismiss the section 631 claims and the eavesdropping portion of the section 632 claim on that ground.

The court also rejected Nuance’s arguments concerning the second and third clauses of section 631. For the second clause, the court held that the plaintiffs sufficiently alleged that Nuance analyzed the substance of their communications, including word choice, grammar, and syntax, rather than merely analyzing communication characteristics such as speaker identity. For the third clause, the court held that creating voice prints, analyzing them to identify fraud, and sending alerts to Chase constituted alleged uses of the information. The statute did not limit prohibited use to uses benefiting Nuance itself. The court denied Nuance’s motion to dismiss the section 631 claims on these grounds.

Section 637.3

Section 637.3 prohibits examining or recording voice prints or voice-stress patterns without advance express written consent when the purpose is to determine whether a person’s statements are true or false.

The court concluded that the complaint did not plausibly allege that Gatekeeper determined the truth or falsity of specific statements. Instead, the allegations indicated that Gatekeeper used voice characteristics to identify callers, which the court compared to a biometric passcode rather than a lie detector. The court therefore granted Nuance’s motion to dismiss the section 637.3 claim, with leave to amend so that the plaintiffs could attempt to plead specific supporting facts.

Disposition

Nuance’s motion to dismiss was granted in part and denied in part. The court denied the motion as to the plaintiffs’ claims under sections 631 and 632. The court granted the motion as to the section 637.3 claim with leave to amend. The court also directed the plaintiffs to amend the complaint to allege more specifically that Nuance used its Chase database of voice prints for other clients. The amended complaint was due June 18, 2024.