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Paul Zimmerman

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Hotel Groups in the Hot Seat for Failing to Obtain "Caller Consent"

An InterContinental Hotels Group, PLC unit sued its insurance company, Zurich, last week in California federal court, alleging their insurer had failed to cover the group for potential losses stemming from a pending class action lawsuit alleging the hotel illegally recorded customer service phone calls in California.

In the lawsuit, Six Continent Hotels is alleged to have recorded a potential class of 7,000 California residents through the company’s reservation hotline, without their consent, in violation of California’s Invasion of Privacy Act (CIPA). 

Note to California hotels: You could be tagged and face class actions for tape recording calls “for quality assurance purposes” if you have failed to inform your callers. 

M&R has a history of dealing with these kinds of "illegal recording" class actions. In one notable case, plaintiff, on behalf of the class, argued that there were thousands of such “wrongful acts”, and that a $5,000 penalty resulted from each of the same, pursuant to CIPA. With the potential for tens of thousands of class members (and hundreds of millions, if not billions, of  dollars in damages), our attorneys formulated a strategy based on legislative intent, and settled the case for pennies on the dollar. (To read more about this issue, click here)

This article is not offered as, and should not be relied on as, legal advice. You should consult an attorney for advice in specific situations.