                 FOR PUBLICATION

  UNITED STATES COURT OF APPEALS
       FOR THE NINTH CIRCUIT


JOHN FAULKNER, on behalf of                No. 11-16233
himself and all others similarly
situated,                                   D.C. No.
                Plaintiff-Appellant,   3:11-cv-00968-JSW

                 v.
                                            OPINION
ADT SECURITY SERVICES, INC.;
ADT SECURITY SYSTEMS, WEST ,
INC.; TYCO INTERNATIONAL
(U.S.) INC.,
             Defendants-Appellees.


      Appeal from the United States District Court
         for the Northern District of California
       Jeffrey S. White, District Judge, Presiding

               Argued and Submitted
     November 5, 2012—San Francisco, California

                  Filed January 17, 2013
2        FAULKNER V . ADT SECURITY SERVICES, INC.

         Before: Robert D. Sack,* Ronald M. Gould,
          and Milan D. Smith, Jr., Circuit Judges.

                      Opinion by Judge Sack


                           SUMMARY**


              California Invasion of Privacy Act

    The panel remanded to the district court to give the
plaintiff an opportunity to seek to amend his complaint to
successfully plead a cause of action under California’s
invasion of privacy law.

    The complaint was filed in a California state court
governed by state procedural rules, and removed to federal
court on diversity of citizenship grounds. The panel agreed
with the district court that the complaint failed to state a
plausible claim under California’s Invasion of Privacy Act,
but the panel remanded to allow plaintiff to amend to attempt
to successfully plead a cause of action under the federal
standards set forth in Ashcroft v. Iqbal, 556 U.S. 662 (2009),
and Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007).




 *
   The Honorable Robert D. Sack, Senior Circuit Judge for the U.S. Court
of Appeals for the Second Circuit, sitting by designation.

  **
     This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
       FAULKNER V . ADT SECURITY SERVICES, INC.             3

                        COUNSEL

Gretchen Carpenter (argued), Strange & Carpenter, Los
Angeles, California, for Plaintiff-Appellant.

Robert Hickok, pro hac vice (argued), Pepper Hamilton LLP,
Philadelphia, Pennsylvania, for Defendants-Appellees.


                         OPINION

SACK, Circuit Judge:

    John Faulkner, a California resident, brought a putative
class action against ADT Security Services, Inc., ADT
Security Systems, West, Inc., and Tyco International, Inc.,
(collectively “ADT”) in California Superior Court alleging
that ADT recorded his telephone conversation with an ADT
representative without his consent in violation of Section 632
of California’s invasion of privacy law. Cal. Penal Code
§ 632. The case was later removed by the defendant to the
United States District Court for the Northern District of
California on diversity grounds. Upon ADT’s motion, the
district court concluded that Faulkner’s pleadings failed to
state a plausible claim upon which relief could be granted and
therefore dismissed the action pursuant to Federal Rule of
Civil Procedure 12(b)(6). Although we agree with the district
court, we remand in order to give the plaintiff an opportunity
to seek to amend his complaint to successfully plead a cause
of action under the federal standards set forth in Ashcroft v.
Iqbal, 556 U.S. 662 (2009), and Bell Atlantic Corp. v.
Twombly, 550 U.S. 544 (2007).
4      FAULKNER V . ADT SECURITY SERVICES, INC.

    FACTUAL AND PROCEDURAL BACKGROUND

    According to his complaint, on March 4, 2010, John
Faulkner contacted his security provider, ADT, by telephone
to dispute a charge assessed by ADT. Faulkner was
transferred to ADT’s technical line, where, he alleges, he
began hearing periodic “beeping” sounds during the
conversation. Upon inquiring about the sounds, Faulkner was
informed that his telephone conversation was being recorded
by ADT.

    Faulkner told the representative that he had not previously
been informed that the conversation was being recorded and
that he did not wish to continue the conversation if the
recording continued. The representative advised Faulkner to
contact the customer service line to discuss the issue.
Faulkner called on the customer service line, where he asked
to speak with a representative on a line that was not being
recorded. That representative informed Faulkner that it was
the company’s policy to record telephone calls and advised
Faulkner to end the call if he did not wish to be recorded,
which he did.

    Based on these conversations, Faulkner filed a claim
alleging a violation of Section 632 of California’s invasion of
privacy law, Cal. Penal Code § 632, in the Superior Court of
California, County of San Mateo, on February 3, 2011.
Faulkner alleged that his was a confidential communication
under the statute and that ADT had violated the statute by
recording the conversation without first obtaining his consent.
He alleged that conversations such as his were confidential
“because they are carried on in circumstances as may
reasonably indicate that any party to the communication
       FAULKNER V . ADT SECURITY SERVICES, INC.              5

desires it to be confined to the parties thereto.” Pl.’s Compl.
¶ 27.

    On March 2, 2011, ADT removed this action to the
United States District Court for the Northern District of
California, asserting jurisdiction under 28 U.S.C.
§ 1332(d)(2). On March 21, 2011, ADT filed a motion to
dismiss Faulkner’s complaint under Federal Rule of Civil
Procedure 12(b)(6) for failure to state a claim upon which
relief can be granted. By order dated May 12, 2011, the
district court (Jeffrey S. White, J.) granted the motion.

    The district court concluded that Faulkner’s conversation
was not a confidential communication because he had “no
objectively reasonable expectation that his telephone
conversation with ADT would not be overheard or
recorded . . . .” Faulkner v. ADT Sec. Servs., Inc., No. 11-
00968, 2011 U.S. Dist. LEXIS 50993, at *8, 2011 WL
1812744, at *3 (N.D. Cal. May 12, 2011). In reaching this
conclusion, the court looked at the “surrounding
circumstances to determine whether the parties had an
objectively reasonable expectation that the conversation [wa]s
not being recorded or overheard,” id., and concluded that
Faulkner had “not alleged what circumstances would support
an expectation of privacy in such a call,” id. at *10, 2011 WL
1812744, at *4. The court distinguished Faulkner’s
allegations from the facts of cases in which courts had found
a reasonably warranted expectation of confidentiality on the
grounds that the nature of ADT’s business and the character
of the call would not alone provide for such an objectively
reasonable expectation. Id. at *10–11, 2011 WL 1812744, at
*3–4. The court therefore granted ADT’s motion to dismiss
the complaint with prejudice. Faulkner appeals.
6       FAULKNER V . ADT SECURITY SERVICES, INC.

    JURISDICTION AND STANDARD OF REVIEW

    We have jurisdiction to hear Faulkner’s appeal under
28 U.S.C. § 1291 because the judgment from which he
appeals is a “final decision[] of the district court[.]” We
review de novo the district court’s order granting a motion to
dismiss for failure to state a claim under Federal Rule of Civil
Procedure 12(b)(6). Cousins v. Lockyer, 568 F.3d 1063, 1067
(9th Cir. 2009). All well-pleaded allegations of material fact
in the complaint are accepted as true and are construed in the
light most favorable to the non-moving party. Manzarek v.
St. Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1031 (9th
Cir. 2008); Warshaw v. Xoma Corp., 74 F.3d 955, 957 (9th
Cir. 1996). To survive a motion to dismiss, a complaint must
allege “enough facts to state a claim to relief that is plausible
on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570
(2007); see also Moss v. U.S. Secret Serv., 572 F.3d 962, 969
(9th Cir. 2009). A claim has facial plausibility when “the
plaintiff pleads factual content that allows the court to draw
the reasonable inference that the defendant is liable for the
misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678
(2009).

                        DISCUSSION

    California’s Invasion of Privacy Act provides, in relevant
part, that “[e]very person who, intentionally and without the
consent of all parties to a confidential communication, by
means of any electronic amplifying or recording device . . .
records the confidential communication” violates the statute.
Cal. Penal Code § 632(a). The statute also provides, in
Section 632(c), that “[t]he term ‘confidential communication’
includes any communication carried on in circumstances as
may reasonably indicate that any party to the communication
       FAULKNER V . ADT SECURITY SERVICES, INC.              7

desires it to be confined to the parties thereto . . . .” Id.
§ 632(c). The statute does not reach a communication made
“in any other circumstance in which the parties to the
communication may reasonably expect that the
communication may be overheard or recorded.” Id.

    The California Supreme Court has concluded that a
conversation is confidential within the meaning of Section
632 “if a party to that conversation has an objectively
reasonable expectation that the conversation is not being
overheard or recorded.” Kearney v. Salomon Smith Barney,
Inc., 39 Cal. 4th 95, 117 n.7 (2006) (quoting Flanagan v.
Flanagan, 27 Cal. 4th 766, 776–77 (2002)). The standard of
confidentiality is “an objective one defined in terms of
reasonableness.” Frio v. Superior Court, 203 Cal. App. 3d
1480, 1488 (1988).

    In the context of a business-related telephone call, courts
have looked to the circumstances surrounding the call to
divine whether the standard has been met, including the
“nature of [the defendant’s] business and the character of the
communications.” Flanagan, 27 Cal. 4th at 772 (citing Frio,
203 Cal. App. 3d at 1489–90). For example, the Court of
Appeal in Frio, considering calls between a record producer
and his clients, concluded that the communications were
confidential because “[a]ll the telephone communications
were conducted on a one-on-one basis and related to a
profitable venture which the speaker reasonably might expect
would be confined to the parties.” 203 Cal. App. 3d at
1489–90. It observed that the communication included
“market data [and] business strategy,” was “sensitive,” and
was “personal . . . among the parties.” Id. The Court of
Appeal concluded that there was “a reasonable expectation by
8       FAULKNER V . ADT SECURITY SERVICES, INC.

one of the parties that no one [was] . . . overhearing the
conversation.” Id. at 1490.

    To prevail against the Rule 12(b)(6) motion, then,
Faulkner would have to allege facts that would lead to the
plausible inference that his was a confidential communication
– that is, a communication that he had an objectively
reasonable expectation was not being recorded. Faulkner’s
complaint, at least in its present form, does not do so.

    Faulkner’s complaint contains two allegations concerning
the confidentiality of his communications with ADT. First,
he alleges that he called ADT to “dispute a charge.” Pl.’s
Compl. ¶ 10. Second, he states that his conversation was
confidential because it was “carried on in circumstances as
may reasonably indicate that any party to the communication
desires it to be confined thereto.” Id. ¶ 27. The latter of these
allegations is no more than a “[t]hreadbare recital[]” of the
language of Section 632, precisely the kind that Iqbal
prohibits. Iqbal, 556 U.S. at 678. Under Iqbal, such bald
legal conclusions are not entitled to be accepted as true and
thus “do not suffice” to prevail over a motion to dismiss. Id.

    Nor is the former allegation, that Faulkner called to
dispute a charge, sufficient to lead to the plausible inference
that he had an objectively reasonable expectation of
confidentiality. Although circumstances may arise under
which the nature of the relationship or the character of the
communications between a customer and a home security
company could plausibly constitute a confidential
communication under the California statute, here, the detail
that Faulkner alleges is merely consistent with such a
         FAULKNER V . ADT SECURITY SERVICES, INC.                         9

conclusion.*** In other words, too little is asserted in the
complaint about the particular relationship between the
parties, and the particular circumstances of the call, to lead to
the plausible conclusion that an objectively reasonable
expectation of confidentiality would have attended such a
communication. Faulkner has therefore failed to “nudge[]”
his claim “from conceivable to plausible.” Id. at 680 (internal
citations and quotation marks omitted). His complaint cannot
survive ADT’s Rule 12(b)(6) motion.

     Faulkner’s complaint was filed in a California State
court, which is, of course, governed by state procedural rules.
The action, along with the complaint, was then removed to
federal court, as noted, on diversity of citizenship grounds.
It is under the Federal Rules of Civil Procedure, as interpreted
by the Supreme Court, that the motion to dismiss was
properly granted. See Kearns v. Ford Motor Co., 567 F.3d
1120, 1125 (9th Cir. 2009) (applying federal pleading rules,
and noting that “[i]t is well-settled that the Federal Rules of
Civil Procedure apply in federal court, irrespective of the
source of the subject matter jurisdiction, and irrespective of
whether the substantive law at issue is state or federal”)
(internal quotation marks omitted)). In an abundance –
perhaps an overabundance – of caution we remand this case
to the district court for it to consider allowing the plaintiff to


  ***
      ADT argues that dismissal was properly granted because a consumer
call to a home security company can never constitute a confidential
communication within the meaning of California Penal Code § 632. W e
disagree. There is nothing inherently non-confidential about a billing
dispute with a home security company. For example, a caller might be
asked to verify his identity by confirming his social security number or his
unlisted telephone number, or to disclose other private or potentially
private information. If adequately pled, such facts might well support a
finding of confidentiality.
10     FAULKNER V . ADT SECURITY SERVICES, INC.

amend his complaint in a manner that would satisfy federal
pleading standards.

     REMANDED.
