The U.S. Court of Appeals for the Eleventh Circuit recently affirmed summary judgment in favor of a vendor under the Florida Security of Communications Act’s (“FSCA”) “business extension” exception where the vendor's company policy mandated recording all phone calls with a separate digital recorder connected to its telephone system.
A copy of the opinion is available at: http://media.ca11.uscourts.gov/opinions/unpub/files/201410872.pdf
A consumer sued a company (“Vendor”) claiming that the Vendor intercepted and recorded phone calls placed to the consumer’s Florida home about certain credit-card accounts without the consumer’s consent in alleged violation of the FSCA. It was the Vendor’s company policy to record all incoming and outgoing calls between its employees and third-party account holders. The Vendor recorded the calls using a digital recording system, or “logger” -- a separate piece of equipment connected to the telephone system. The Vendor did not dispute that it made and recorded several outgoing calls to the consumer in accordance with its company policy and without the consumer’s consent.
The district court granted summary judgment in favor the Vendor pursuant to the FSCA’s “business extension” exception.
The Eleventh Circuit noted that the FSCA prohibits the interception of wire, oral, or electronic communication. See Fla. Stat. § 934.03(1). The FSCA defines “intercept” as the “aural or other acquisition of the contents of any wire, electronic, or oral communication through the use of any electronic, mechanical, or other device.” See id. § 934.02(3) The phrase “electronic, mechanical, or other device” includes “any device or apparatus which can be used to intercept a wire, electronic, or oral communication.” See id. § 934.02(4).
However, under the “business extension” exception, the term “electronic, mechanical, or other device” does not include telephone equipment that is “[f]urnished to the subscriber or user by a provider of wire or electronic communication service in the ordinary course of business and being used by the subscriber or user in the ordinary course of its business.” See id. § 934.02(4)(a)(1).
The Eleventh Circuit noted that the district court relied on Royal Health Care Serv., Inc. v. Jefferson-Pilot Life Ins. Co. in determining that the business extension exception applied. See 924 F.2d 215 (11th Cir. 1991). In Royal Health, the plaintiff alleged a violation of the FSCA based on defendant’s automatic recording of outgoing calls to the plaintiff without plaintiff’s consent. See id. at 216. The Royal Health defendant asserted that is conduct fell under the FSCA’s business extension exception, and thus no “interception” occurred under the Act. See id.
To determine whether the business extension exception applied, the Circuit Court first considered whether the alleged interception was made by the telephone extension used to make the calls or by the recorder used to record the calls. See id. at 217.
Based both on Florida case law and the Eleventh Circuit’s precedent interpreting the Federal Wiretap Act (upon which the FSCA is modeled), the Circuit Court concluded that the calls were intercepted (under the term’s common meaning) by the telephone extension, not the recording device. See id. at 217-18.
Because (1) the telephone used was supplied by a provider of wire or electronic communication service in the ordinary course of its business, and (2) the calls were recorded pursuant to the defendant’s company policy in the ordinary course of business, the business extension exception applied. See id. Thus, no “interception” within the meaning of the FSCA occurred, and the defendant Vendor was entitled to summary judgment. See id. at 218.
Next, the Eleventh Circuit noted that the consumer did not dispute that the facts in Royal Health were materially distinguishable from the case at hand. Rather, the consumer asked the Circuit Court to certify questions to the Florida Supreme Court about the proper application of the FSCA.
The consumer contended that since Royal Health was decided, five other federal circuit courts (interpreting the Federal Wiretap Act) and various non-Florida state courts (interpreting analogous state statutes) – contrary to the reasoning in Royal Health – concluded that a telephone call is “intercepted” for purposes of the pertinent federal and statute statutes by the recording device, not the telephone. The consumer argued that the intervening foreign decisions casted sufficient doubt on the Eleventh Circuit’s earlier interpretation of Florida law that certification to the Florida Supreme Court was warranted.
However, the Eleventh Circuit noted that under its prior-precedent rule, it was bound by an earlier panel’s decisions unless it was overruled by the Circuit Court sitting en banc or “if subsequent decisions of the United States Supreme Court or the Florida courts cast doubt on [the Appellate Court’s] interpretation of state law.” See Venn v. St. Paul Fire & Marine Ins. Co., 99 F.3d 1058, 1066 (11th Cir. 1996) (emphasis in original).
The consumer failed to cite any such intervening decision of the United States Supreme Court or of the Florida courts that called into question the Circuit Court’s interpretation of the FSCA’s business extension exception in Royal Health. Thus, Royal Health remained binding precedent.
Accordingly, the Eleventh Circuit affirmed the entry of summary judgment in favor of the vendor.
Ralph T. Wutscher
McGinnis Wutscher LLP
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