Source: JD Supra

Companies are increasingly deploying AI for customer service and related functions, which the piece identifies as creating significant legal risk under older statutes such as wiretap, biometrics, and common-law privacy rules. A recent Northern District of California lawsuit is described in which plaintiffs allege that Otter.AI’s meeting bot joined meetings without consent and transmitted audio to Otter to produce transcriptions and to improve its speech‑recognition and machine‑learning models; the complaint advances California Invasion of Privacy Act (CIPA) claims treating the transcription tool as a distinct third party rather than merely a passive host-controlled instrument. The merits of the Otter.AI litigation remain unadjudicated and the assertions in the complaint are presented as allegations; courts are said to be grappling with whether AI transcription tools qualify as third parties under applicable precedent.

Additional actions in the Northern District of California are noted where plaintiffs allege that third‑party AI recording, transcription and analytics vendors captured or reused data without informing or obtaining consent from consumers. The summary reports that plaintiffs survived a motion to dismiss in a customer‑service case after the court emphasized that a vendor’s mere capability to use captured data for its own purposes was sufficient to plausibly allege CIPA liability. A separate newly filed complaint concerns health providers’ deployment of an “ambient clinical documentation” system that allegedly records and transcribes physician‑patient conversations; facts about patient consent and whether recordings were sent to a third‑party developer are identified as pivotal as the case moves toward the motion‑to‑dismiss stage. The authors contrast prior CIPA claims tied to pixel tracking with AI’s wider reuse potential and recommend mitigation measures—inventorying tools, clear disclosure, obtaining notice and consent, updating vendor contracts, calibrated retention and logging, and testing consent/refusal flows—while noting a general disclaimer that the update is not a substitute for tailored legal advice.