Eavesdropping Class Action Against Hilton Reinstated

Hilton Worldwide Inc. must face a customer class action claiming it eavesdropped on customer service phone calls without consent, in violation of California privacy law, a divided federal appeals court held Thursday.

The 9th U.S. Circuit Court of Appeals reinstated the class action by Rick Young, accusing the hotel chain of recording cellphone and cordless telephone calls without getting consent. Young did not appeal the dismissal of eavesdropping claims involving telephone landlines.

The original lawsuit alleged the Hampton Hotels, owned by Hilton, recorded customer calls to the service center while they made reservations, had questions comments or feedback about the hotel.  It also alleged the recordings were without consent and sensitive information, such as name and credit card number, may have been shared.

The appeals panel, split 2-1, was critical of the trial judge, U.S. District Judge Manuel Real in Los Angeles, for failing to make a distinction between the two types of protection against eavesdropping on landlines and cellular calls.

The majority rejected Real’s dismissal of the entire complaint saying he “simply signed defendants’ proposed order, which failed to distinguish between the two provisions.”

And the panel directed some of its anger at lawyers for Hilton.

“On appeal, Hilton for the first time urges several statutory construction arguments in an attempt to defend the defective order that its own counsel drafted,” the majority said.

In dissent, visiting Judge Frederick Motz said he thought the ruling was premature and urged that the case be sent back to Real to be fully briefed on the alleged cellular violations claims.

The ruling was unpublished, meaning it is a non-precedent-setting order.

This is not the first time Real has faced criticism from the appeals court for his handling of a case.  In 2009 the Judicial Council for the circuit examined 89 cases in which Real’s conduct was challenged.  They found his behavior in many cases problematic but found he lacked “willfulness” required for discipline.  Even earlier, in 2006, he testified in Congress to fight an impeachment effort over a complaint about his handling of a bankruptcy case of a woman whose probation he oversaw.  He  successfully fought off the impeachment.

Case:  Young v. Hilton Worldwide, Inc., No. 12-56189




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