Kearney v. Salomon Smith Barney, Inc., 39 Cal. 4th 95 (2006)

In this proceeding, several California clients of SSB filed a putative class action seeking damages and injunctive relief against SSB’s Atlanta-based branch’s practice of recording telephone conversations with California residents without their knowledge or consent. The lower court affirmed dismissal of the lawsuit after applying the law of the State of Georgia. The California Supreme Court, however, concluded that the failure to apply California law in this context would impair California’s interest in protecting the degree of privacy afforded to California residents by California law. Further, the Supreme Court concluded that applying Georgia law in this instance would place California businesses (that are subject to California’s privacy law) at an unfair disadvantage vis-à-vis their out-of-state competitors. The Court also concluded that the action could go forward insofar as plaintiffs sought injunctive relief but not damages or restitution based on SSB’s past conduct.