Otter.ai Lawsuit: Judge Lets Core Privacy Claims Proceed (2026)

A federal judge has ruled that the core privacy claims against the AI notetaking service Otter.ai will go forward. On August 13, 2026, Judge Eumi K. Lee of the Northern District of California granted Otter's motion to dismiss only in part, holding that the plaintiffs plausibly alleged Otter acts as a third-party eavesdropper, and allowing the federal Wiretap Act claim, the California Invasion of Privacy Act claim, and both Illinois biometric-privacy claims to proceed toward discovery.

Status: On August 13, 2026, the court in In re Otter.AI Privacy Litigation, No. 5:25-cv-06911-EKL (N.D. Cal.), granted Otter's motion to dismiss in part and denied it in part. The core wiretap, CIPA, and BIPA claims survive. This is a ruling on the pleadings, not a finding of liability; the case continues.

Information last verified on August 20, 2026. This is a developing story; we update it as the record changes.

Jurisdiction scope: This article addresses a putative class action pending in the U.S. District Court for the Northern District of California and the California, Illinois, Washington, and federal statutes it invokes. It explains the law generally and does not advise on any specific meeting, account, or dispute. For state rules, see California recording laws and AI meeting recording laws by state.

What Happened

Otter.ai markets an AI assistant, often called the Otter Notetaker, that joins video calls on platforms such as Zoom, Google Meet, and Microsoft Teams to record audio, generate live transcripts, and produce summaries. Beginning in August 2025, users and meeting participants sued the company in California federal court, alleging the service captured their conversations without permission. Judge Eumi K. Lee consolidated the suits into In re Otter.AI Privacy Litigation, No. 5:25-cv-06911-EKL, and seven named plaintiffs from California, Illinois, and Washington filed a consolidated complaint on December 5, 2025.

The complaint alleges that Otter obtained consent, at most, from the meeting host who added the assistant, but not from the other participants whose voices it recorded and transcribed. It further alleges that Otter used recorded content to train and improve its artificial intelligence models. In the court's words, the case alleges that Otter "surreptitiously eavesdrops and records conversations held over virtual meeting platforms like Zoom and Microsoft Teams without obtaining consent from all meeting participants."

Otter moved to dismiss the consolidated complaint, denying that any unlawful interception occurred and arguing that its assistant acts for the meeting host rather than as a separate eavesdropping third party. After three continuances, Judge Lee heard argument on August 3, 2026 in San Jose and took the motion under submission. (An earlier version of this article said the motion was argued on May 20, 2026; the docket shows that hearing date was reset three times — to July 15, July 29, and finally August 3 — and argument was actually heard on August 3.) Ten days later, on August 13, 2026, the court issued a 23-page written order.

What the Court Decided

The order grants the motion in part and denies it in part, and the parts that survive are the heart of the case.

Standing. The court first held the plaintiffs have Article III standing, reasoning that the alleged harm — "the unauthorized interception, recording, transcription, and retention of Plaintiffs' private conversations without their consent" — "closely resembles the common-law privacy tort of intrusion upon seclusion." Otter had leaned on the Ninth Circuit's recent decision in Popa v. Microsoft, which involved website session-replay tracking; Judge Lee distinguished it, writing that eavesdropping on entire conversations is "materially more invasive than the monitoring of browsing activity."

The federal Wiretap Act claim survives. Otter argued the "party exception," which permits a party to a communication to record it. The court held that exception can fall away at the pleading stage because the plaintiffs allege Otter "tortiously used their conversational data without their knowledge or consent to train its 'machine learning systems for its own pecuniary gain,'" invoking the statute's criminal-or-tortious-purpose carve-out.

The CIPA section 631 claim survives for all three California plaintiffs. This is the ruling's most consequential passage for the AI-notetaker industry. Otter argued it is merely an extension of the meeting host, like a tape recorder. The court disagreed at this stage: "Because Plaintiffs plausibly allege that Otter independently collects, retains, and uses communications for its own commercial purposes, they have sufficiently alleged that Otter is a third-party eavesdropper under section 631." The court distinguished Graham v. Noom, where a session-replay vendor was treated as an extension of its client, providing a tool rather than acting as a third-party eavesdropper.

Both Illinois BIPA claims survive. The plaintiffs allege Otter creates and stores voiceprints "so that, in future meetings, Otter can identify the same individuals and transcribe their conversations." The court held that plausibly alleges biometric identifiers collected without the written consent BIPA requires, and rejected Otter's extraterritoriality argument at the pleading stage. So did the unjust enrichment, Unfair Competition Law, and declaratory judgment claims.

What was dismissed. Both Computer Fraud and Abuse Act counts were dismissed with leave to amend — one for conclusory "access" allegations, the other for failing to allege a cognizable statutory "loss." In a footnote, the court flagged that a brand-new Ninth Circuit opinion, Amazon.com Services v. Perplexity AI (decided August 4, 2026), "casts doubt" on the plaintiffs' theory that Otter accesses their computers indirectly through the users who deploy the Notetaker, though the court said it did not rely on that opinion here. The CDAFA claim and the Washington Privacy Act claim were also dismissed with leave to amend, the latter because the Washington plaintiff had not pleaded enough facts that his communications were "private" — and his common-law intrusion-upon-seclusion claim was dismissed on the same ground. Intrusion-upon-seclusion claims failed for two California plaintiffs who alleged only that their conversations were generically private, but survived for plaintiff Chaka Theus, who alleged Otter intercepted a conversation with his medical provider involving "deeply personal and private medical information."

What was withdrawn. The plaintiffs voluntarily dropped their conversion, trespass to chattels, larceny, and CIPA sections 635 and 638.51 claims; the order's conclusion also lists the Illinois plaintiffs' intrusion-upon-seclusion claims among the withdrawn counts. Because the deadline to amend the pleadings had already passed, they cannot bring those back without showing good cause.

What the Law Actually Says

The lawsuit turns on California's recording statutes. California is one of a minority of states that require all-party consent to record a private conversation. Under California Penal Code section 632, it is unlawful to use an electronic device to record a confidential communication without the consent of every party to it. A communication is confidential when at least one party reasonably expects that it is not being overheard or recorded.

"A person who, intentionally and without the consent of all parties to a confidential communication, uses an electronic amplifying or recording device to eavesdrop upon or record the confidential communication . . ."

Cal. Penal Code section 632(a)

The plaintiffs also rely on section 631, which reaches a person who, without consent, reads or attempts to read the contents of a communication while it is in transit, or who aids another in doing so. Section 637.2 lets a person harmed by a violation recover $5,000 for each violation or three times actual damages, whichever is greater, and it does not require proof of actual damage. That statutory structure is what gives these cases their scale when they proceed as class actions.

A parallel claim arises under the federal Wiretap Act, part of the Electronic Communications Privacy Act, codified at 18 U.S.C. sections 2510 through 2522. Federal law sets a one-party consent floor, so it generally permits recording when one participant consents — unless the interception is made for a criminal or tortious purpose, the carve-out the court relied on here. The federal statute also carries its own civil damages, the greater of $10,000 per violation or $100 per day. For background on the federal baseline, see our guide to the federal Wiretap Act and ECPA.

The dividing line the ruling sharpens is whether a technology vendor counts as a separate eavesdropping party or merely a tool used by a participant. Judge Lee's reasoning tracks the approach Judge Rita F. Lin took in the Google Cloud Contact Center AI litigation in February 2025, which adopted a "capability test": whether the vendor "has the capability to use the wiretapped data it collects . . . to improve its AI/ML models," regardless of whether it actually does or is contractually barred from doing so. Under that line of cases, an AI vendor's own retention and training use of meeting audio is exactly what converts it from the host's recorder into a potential eavesdropper.

Analysis: Why This Matters

The following is analysis from the Recording Law Editorial Team.

This is the clearest signal yet from a federal court that an AI notetaker can be treated as a third-party eavesdropper rather than a neutral recording tool, at least where the vendor is alleged to keep the audio and train its models on it. The reasoning matters more than the caption: it did not turn on anything unique to Otter. Any meeting assistant whose vendor retains conversational data for its own purposes faces the same pleading-stage logic, which is why the ruling is being read across the industry and not just in Mountain View.

The procedural posture still matters. A motion to dismiss tests only whether the complaint states a legal claim, accepting its factual allegations as true. Nothing in the order finds that Otter actually did what the complaint alleges, and Otter denies unlawful interception. But the practical consequences of surviving dismissal are real: discovery into how the Notetaker joins meetings, what notice participants actually receive, and how recordings feed model training; a coming fight over class certification; and, hanging over it, statutory damages that accrue per violation under CIPA and BIPA. The surviving BIPA counts are notable on their own — voiceprint claims carry $1,000 to $5,000 per violation without proof of actual harm.

There is also a quiet second storyline for the AI industry in the CFAA footnote. The Ninth Circuit's August 4 Perplexity AI opinion, flagged but not relied on by Judge Lee, suggests courts are narrowing the theory that an AI service "accesses" your computer when a user points it at your data. Plaintiffs' lawyers will keep testing that seam; the wiretap and biometric statutes, not the hacking statute, look like the durable vehicles. We are not predicting how this case ends. We are flagging that its framework — consent ceremonies, vendor data use, per-violation exposure — is becoming the compliance checklist for every AI meeting product.

How This Affects You

This section describes general implications, not advice about any specific situation. The lawsuit is a reminder that consent rules vary sharply by state. In all-party consent states, recording a private conversation generally requires permission from everyone on the call, and a setting that captures a meeting for one host does not by itself supply that consent for the others. Courts have generally treated a clear, up-front notice that a meeting is being recorded, paired with a real chance to object or leave, as central to consent.

For anyone deploying an AI notetaker, the ruling sharpens rather than changes the practical guidance our state guides already give: announce the assistant before it captures anything, get affirmative agreement in all-party states, and turn off auto-join, the feature at the center of this complaint. Because the law is unsettled for AI notetakers specifically, people and organizations using these tools across several states can face different rules at once. Anyone weighing a specific recording question should consult a lawyer licensed in the relevant jurisdiction.

What Happens Next

The plaintiffs may file an amended complaint within 14 days of the order, on or about August 27, 2026, to try to cure the dismissed claims; Otter must respond within 21 days after that, whether or not they amend. Then the case moves into discovery and, eventually, a fight over class certification. As of August 20, 2026, no amended complaint had been docketed.

The wider docket tells its own story. Cruz v. Fireflies.AI, a parallel suit against another notetaking vendor, was voluntarily dismissed without prejudice in March 2026 without explanation. The Google Cloud Contact Center AI litigation, source of the capability test, remains active more than a year after its own motion-to-dismiss ruling. The event that converts this explainer into settled law is a merits ruling or an appellate decision; until then, the legal status of AI notetakers under wiretap and eavesdropping statutes remains contested. We will keep updating this article as the record changes.

This is general legal information, not legal advice. It covers a putative class action pending in the U.S. District Court for the Northern District of California and the statutes it invokes, and reflects sources verified on August 20, 2026. Laws change and this matter remains undecided on the merits; consult a lawyer licensed in your jurisdiction about your specific situation.

Related articles

• California Recording Laws: All-Party Consent Rules
• AI Meeting Recording Laws by State
• California AI Meeting Recording Laws
• Federal Wiretap Act and ECPA

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Last updated: 2026-08-20. This is a developing story; details verified as of 2026-08-20.

Frequently Asked Questions

Has a court ruled that Otter.ai is illegal?

No. The August 13, 2026 order in In re Otter.AI Privacy Litigation decided only that the core claims are plausible enough to proceed. It accepts the complaint's allegations as true for that purpose and makes no finding that Otter actually violated any law. Otter denies unlawful interception.

What did the August 2026 Otter.ai ruling decide?

Judge Eumi K. Lee granted Otter's motion to dismiss only in part. The federal Wiretap Act claim, the California Invasion of Privacy Act section 631 claim, both Illinois BIPA voiceprint claims, unjust enrichment, and the UCL claim all survive. Both CFAA counts, the CDAFA claim, the Washington Privacy Act claim, and most intrusion-upon-seclusion claims were dismissed with leave to amend.

Why did the court say Otter might be an eavesdropper rather than a tool?

Because the plaintiffs allege Otter does not just record for the meeting host: it independently retains conversational data and uses it to improve its own machine-learning models. Under California case law, a vendor with its own use for intercepted communications can be a third-party eavesdropper under Penal Code section 631 rather than an extension of a party.

What is the significance of the BIPA claims?

Illinois's Biometric Information Privacy Act requires written consent before collecting voiceprints. The plaintiffs allege Otter stores voiceprints so it can identify the same speakers in future meetings. BIPA allows $1,000 to $5,000 per violation without proof of actual harm, which scales quickly in a class action.

Why does California law matter here?

California requires all-party consent to record a confidential communication. Penal Code section 632 bars recording without everyone's consent, and section 637.2 allows $5,000 per violation or three times actual damages, whichever is greater.

Is it legal to record a meeting with an AI notetaker?

It depends on the state and the facts. In one-party consent states, one participant's consent can be enough; in all-party consent states like California, everyone generally must consent. This ruling makes clear that a vendor's own use of the recordings can create separate legal exposure even where a participant consented.

What happens next in the case?

Plaintiffs may amend the dismissed claims by about August 27, 2026, and Otter responds within 21 days after that. The surviving claims head toward discovery and a class-certification fight. No trial date has been set, and no damages have been awarded.