In a first-of-its kind ruling, a California state court rejected a class action lawsuit against Dialpad, Inc., ruling that the company did not violate privacy or wiretapping laws by using artificial intelligence to transcribe and improve its communication services and customer phone calls.
Keker, Van Nest & Peters partner Ben Berkowitz successfully argued for a demurrer in Freund v. Dialpad, Inc., and the San Francisco Superior Court agreed, ruling that the company is immune from liability under the California Invasion of Privacy Act because it is a telephone service provider and the AI technology is integrated into the delivery of its services.
The case marked one of the first times a California court directly addressed how CIPA applies to AI-enabled voice technology. The ruling comes amid a surge of CIPA class actions attempting to stretch a 1967 statute to cover modern technologies such as cloud platforms, analytics tools, chatbots, and AI systems. In siding with Dialpad, the court emphasized that software performing these functions remains part of a telephone service provider’s infrastructure, and therefore retains statutory protection.
The ruling further provided a framework for courts and companies navigating the intersection of privacy law and artificial intelligence. The court rejected the claim by plaintiffs that AI-enhanced services turn a telephony provider into a wiretapper.
The Keker team included partners Ben Berkowitz and Christina Lee, of counsel Ian Kanig, and associates Lauren Kane and Spencer McManus.