Arias v. Mutual Central Alarm Service

Mutual Central Alarm Service, Inc. (Mutual) (defendant) was a company that monitored its customers’ fire and burglar alarms and notified the appropriate emergency services if an alarm was activated. The standard industry practice was for alarm-monitoring companies to record all telephone calls. Trade associations, Mutual’s own insurance underwriters, and regulatory bodies also recommended recording all telephone calls. The recordings were used to ensure that accurate information was provided to public officials in order to verify that the reporting happened quickly and also to verify customer claims about alarm events. In addition, because alarm-monitoring employees often had access to sensitive customer information, the recordings were used to identify criminal activity and to verify employee honesty. For all these reasons, and in accordance with standard industry practice, Mutual had equipment that recorded all telephone conversations on its lines 24 hours per day. Because part of the purpose of the recording was to combat criminal activity by its employees, Mutual did not formally notify its employees that the recording was happening. Lourdes Arias and Louis Albero (plaintiffs) were Mutual employees whose private telephone conversations were recorded. Arias and Albero sued Mutual, alleging that Mutual’s act of recording their personal telephone conversations without notice or consent violated the federal Wiretap Act. The district court granted summary judgment to Mutual, dismissing the Wiretap Act claims. Arias and Albero appealed the dismissal to the Second Circuit.