Tate v. Chemed Corp.

CourtDistrict Court, E.D. California
DecidedJanuary 8, 2025
Docket2:24-cv-01327
StatusUnknown

This text of Tate v. Chemed Corp. (Tate v. Chemed Corp.) is published on Counsel Stack Legal Research, covering District Court, E.D. California primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Tate v. Chemed Corp., (E.D. Cal. 2025).

Opinion

8 UNITED STATES DISTRICT COURT

9 FOR THE EASTERN DISTRICT OF CALIFORNIA

11 CHARMAINE TATE, individually and 2:24-cv-01327-DJC-CSK on behalf of all others similarly 12 situated,

13 Plaintiff, v. ORDER 14 VITAS HEALTHCARE CORPORATION, 15 Defendant. 16

17 A woman called a healthcare provider to discuss sensitive details about the

18 provider’s hospice care for the woman’s grandmother. Unknown to the woman

19 calling, the healthcare provider utilized a software to listen to the contents of the call

20 and produce data about the call’s purpose and resolution. Via its Terms of Service,

21 the software creator reserved the rights to employ the data yielded from those calls

22 for its own busine ss and product development functions. Does the woman have a 23 viable claim that the use of that software by the healthcare provider and the software 24 developer violated California privacy laws? 25 In weighing this question, the Court must determine whether the software 26 developer is a third party separate from the healthcare provider, or an extension of 27 the healthcare provider itself. The Court joins a number of district courts in holding 28 1 that the developer of software used to record and analyze phone calls is a third party

2 when the developer is able to utilize data obtained for its own purposes, separate

3 from the interests of the parties to the call. The Court finds that the software

4 developer in this case is capable of using the data for its own purposes, and because

5 the use of its software was not disclosed to the caller, it may be in violation of

6 California privacy laws. Additionally, because the healthcare provider aided the

7 software developer in obtaining access to the client calls, it may also be held liable.

8 Accordingly, Defendant’s Motion to Dismiss (ECF No. 12) is DENIED.

9 BACKGROUND

10 Defendant VITAS Healthcare Corporation operates hospice and palliative care

11 locations throughout California. (ECF No. 10; “FAC” ¶ 9.) It utilizes a conversation

12 intelligence software-as-a-service (“SaaS”) provided by Invoca, Inc. (“Invoca”) to help

13 analyze the more than 90,000 annual calls it receives to its call centers. (Id. ¶¶ 1, 36.)

14 When a person calls VITAS, Invoca’s software records and creates a transcript of the

15 caller’s speech. (Id. ¶ 20.) Invoca feeds that transcript to an artificial intelligence (AI)

16 program that identifies patterns and classifies the data into a searchable database,

17 which is then sent to VITAS. (Id.) This database is used by VITAS to understand what

18 questions and concerns its callers have, so that VITAS can adjust the content it delivers

19 to consumers and the call scripts utilized by its representatives. (Id. ¶ 37.) Under its

20 Terms of Service, Invoca can also use data obtained for other limited purposes,

21 including “to optimize and improve Services or otherwise operate Invoca’s business.”

22 (Id. ¶¶ 33, 34.) Neither VITAS nor Invoca obtain the consent of any caller to VITAS’s

23 call center, and callers are unaware that their speech is being recorded and analyzed.

24 (Id. ¶¶ 6, 40.)

25 In late 2023, Plaintiff Charmaine Tate called Defendant VITAS and spoke with a 26 VITAS representative regarding hospice care for Tate’s grandmother. (Id. ¶¶ 8, 42.) 27 Tate alleges that the use of Invoca’s software to record and analyze her and others’ 28 calls to VITAS violates the California Invasion of Privacy Act (“CIPA”) sections 631(a) 1 (unauthorized wiretapping) and 632(a) (unauthorized eavesdropping on or recording

2 of confidential communications), and that VITAS is liable for aiding those violations.

3 (Id. ¶ 41; see Cal. Pen. Code1 §§ 631(a), 632(a).) On February 28, 2024, Tate brought

4 this action in the Sacramento Superior Court on behalf of herself and members of a

5 proposed class, and it was removed to federal court on May 9, 2024. The proposed

6 class for which Tate seeks certification would consist of all California residents who

7 called VITAS’s customer service line while in California and whose conversations with

8 VITAS were intercepted and recorded by Invoca. (Id. ¶ 49.)

9 LEGAL STANDARD

10 A party may move to dismiss for “failure to state a claim upon which relief can

11 be granted.” Fed. R. Civ. P. 12(b)(6). The motion may be granted only if the complaint

12 lacks a “cognizable legal theory or sufficient facts to support a cognizable legal

13 theory.” Mendiondo v. Centinela Hosp. Med. Ctr., 521 F.3d 1097, 1104 (9th Cir. 2008).

14 While the Court assumes all factual allegations are true and construes “them in the

15 light most favorable to the nonmoving party,” Parks Sch. of Bus., Inc. v. Symington, 51

16 F.3d 1480, 1484 (9th Cir. 1995), if the complaint's allegations do not “plausibly give

17 rise to an entitlement to relief” the motion must be granted, Ashcroft v. Iqbal, 556 U.S.

18 662, 679 (2009) (“Iqbal”).

19 A complaint need contain only a “short and plain statement of the claim

20 showing that the pleader is entitled to relief,” Fed. R. Civ. P. 8(a)(2), not “detailed

21 factual allegations,” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). However,

22 this rule demands more than unadorned accusations; “sufficient factual matter” must

23 make the claim at least plausible. Iqbal, 556 U.S. at 678. In the same vein, conclusory

24 or formulaic recitations of elements do not alone suffice. Id. “A claim has facial

25 plausibility when the plaintiff pleads factual content that allows the court to draw the 26 reasonable inference that the defendant is liable for the misconduct alleged.” Id. This 27

28 1 All undesignated statutory references are to the California Penal Code unless otherwise specified. 1 evaluation of plausibility is a context-specific task drawing on “judicial experience and

2 common sense.” Id. at 679.

3 DISCUSSION

4 CIPA provides parties to a phone call legal protection from unauthorized, third-

5 party listeners eavesdropping or recording the contents of those calls. Section 631(a)

6 outlines repercussions for any person:

7 (1) “[W]ho, by means of any machine, instrument, or contrivance, or in any other manner, intentionally taps, or makes any unauthorized connection, whether 8 physically, electrically, acoustically, inductively, or otherwise, with any

9 telegraph or telephone wire, line, cable, or instrument, including the wire, line, cable, or instrument of any internal telephonic communication system, 10 or who willfully and without the consent of all parties to the communication, or in any unauthorized manner, reads, or attempts to read, or to learn the 11 contents or meaning of any message, report, or communication while the

12 same is in transit or passing over any wire, line, or cable, or is being sent from, or received at any place within this state;” or 13 (2) “[W]ho uses, or attempts to use, in any manner, or for any purpose, or to communicate in any way, any information so obtained, or who aids, agrees 14 with, employs, or conspires with any person or persons to unlawfully do, or

15 permit, or cause to be done any of the acts or things mentioned above in this section.” 16

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