"Listen Up" If Your AI Policy Does Not Cover AI Recording Issues – Another Class Action Lawsuit Filed Over Third Party AI Recording Service

Published: 2025-07-14 08:13:07 ET RNG

Published on 07/14/2025 at 08:13

The use of AI recording tools has become prevalent. Companies' policies addressing the legal issues with these tools is not yet as prevalent. If your company's AI policy does not address these issues, it needs to be updated. A recently filed class action stems from one fact scenario where legal issues may arise. It is not the first suit against AI recording and it will not be the last. The lawsuit claims violation of the Federal Wiretap Act. 18 U.S.C. § 2510 et seq based on use of a third party service that records and perform AI analysis on calls between a dental company and its patients. Details of this lawsuit are provided below. However, it is important to understand that if your company or your employees use AI recording tools or notetakers, you need to ensure that your AI policy covers all of the necessary issues. These issues can include at least: i) managing and documenting notice and consent; ii) dealing with nonconsenting parties participating in a call being recorded; iii) inaccuracies of AI generated transcripts and summaries; iv) AI generated sentiment analysis/emotion detection; v) confidentiality and privilege issues; vi) retention and/or deletion of recordings; vii) vendor diligence on these tools and approval process for specific tools; and viii) knowing the technical features of some tools that can help mitigate risk and others that can create more risk.

The Lawsuit

The putative class action was filed against Heartland Dental, LLC ("Heartland")1 for using a third party AI service provided by co-defendant RingCentral, Inc. ("Ring') which records and performs AI analysis on calls between Heartland and its patients without notice to the dental patients.2 The lawsuit claims this violates the Federal Wiretap Act. 18 U.S.C. § 2510 et seq. and particularly, 18 U.S.C. § 2511. It primarily deals with the interception and disclosure of wire, oral, or electronic communications. The activity relates to use of a third party service that recorded patients call with a dental service. The claim is based, in part, on the fact that Ring was not a party to the calls. Yet, Ring listens to and analyzes phones calls in real time using its AI tool.

Allegedly, Heartland incorporated the Ring phone into call center services that it provides to its dental practice partners. As a result, patients calling a local dental practice affiliated with Heartland had their calls listened to and analyzed by Ring and its sophisticated artificial intelligence algorithms. The Plaintiff alleges that patients calling a local dental office are not informed that an unknown third-party (Ring) is listening in on the calls and analyzing them using AI without the patients' knowledge and consent. According to Plaintiff, Heartland intercepted or procured another person to intercept sensitive communications between Plaintiff and the Class and their healthcare providers in violation of 18 U.S.C. § 2511.

Ring is an entirely separate entity from the local dental clinic, and acts as an unannounced listener and auditor of patients' phone calls. Given the nature of the calls, which include individually identifiable health information about their medical treatments. The Complaint alleges this violates 42 U.S.C. § 1320d-6 of the Health Insurance Portability and Accountability Act ("HIPAA"), which imposes federal criminal liability to anyone who obtains "individually identifiable health information" (or "IIHI") relating to an individual or discloses it to another person.

Additionally, the Complaint alleges that Ring not only listens to and analyzes patient calls on Heartland's behalf, but also uses patient calls for its own purpose: to train its AI models and develop its own products and services for other customers. Ring's privacy policy governs the relationship between Heartland and RingCentral. It specifically allows RingCentral to use patient calls to improve its own product. But apparently this is not disclosed by Heartland (or Ring) to Heartland's patients. The Complaint asserts that by agreeing to Ring's terms and implementing Ring's phone systems, Heartland has effectively granted an unknown third-party the ability to eavesdrop on patient phone calls in real-time without patient consent.

Lessons To Be Learned

Conclusion

The foregoing are sample issues that can arise with AI recordings and notetakers. Different tools and different use cases can implicate other issues. It is important that each company adopt written policies that are appropriate for their own circumstances. There is no one size fits all policy for these tools. The requirement for thorough diligence on these tools can not be overstated. In addition to this lawsuit, there have been other cases where companies using a third party AI service have faced liability issues for aiding and abetting wire tapping due to the third party's activities. This is an area where legal issues continue to evolve as the features of the AI recording tools evolve. It is important to stay up to date on the technology and legal issues and periodically update your AI policies accordingly. Feel free to reach out if you have questions on these or other AI issues.

Footnotes

1 Defendant Heartland is a dental support organization ("DSO") that provides services related to non-clinical aspects of running a practice, such as billing, insurance, staffing, and marketing. Allegedly, Heartland Dental is the largest DSO in the United States and has partnered up with over 1,700 dental practices and over 2,800 doctors nationwide.

2 The RingCentral AI is a suite of features that listens to phone calls in the background and analyzes conversations in real-time. The features that make up RingCentralAI include, among others, (i) real-time voice transcription, (ii) call highlights, (iii) automated call summaries and (iv) sentiment voice analysis.

3 Many AI recording and note taking tools exist. Some are integrated into other products such as Zoom AI Companion and Teams. Others are standalone tools such as Fireflies.ai and Otter.ai. Many others exist.

4 For more information on legal issues with Emotional AI, see The Price of Emotion: Privacy, Manipulation, and Bias in Emotional AI.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

James Gatto Sheppard Mullin Richter & Hampton 2099 Pennsylvania NW Suite 100 Washington DC UNITED STATES Fax: 2136201398 E-mail: [email protected] URL: www.sheppardmullin.com