Core Privacy Claims Against AI Note Taking Platform Survive Dismissal

As AI-powered note-taking tools become increasingly common in the workplace, a recent decision from the U.S. District Court for the Northern District of California (In re Otter.AI Privacy Litigation, No. 5:25-cv-06911) highlights the privacy risks these technologies may present. In a consolidated class action lawsuit against Otter.AI (“Otter”), the court allowed several key claims to proceed, including alleged violations of the wiretapping provisions of the California Invasion of Privacy Act (“CIPA”), along with claims alleging violations of the federal Wiretap Act and the Illinois biometric privacy law.  

In the suit, the plaintiffs allege that Otter records and transcribes private conversations without obtaining the consent of all participants and uses those recordings to improve its products and train AI models without adequate disclosure. In defense, Otter argued that it merely provides a service at the direction of the account holder or meeting host and therefore cannot be considered a third-party interceptor of communications. The company also contended that the plaintiffs had not suffered a sufficiently concrete injury to pursue their claims in federal court.

At the pleading stage, the court found that the complaint plausibly alleged that Otter retained and used conversational data for its own commercial purposes, including developing machine-learning models and related services. Based on those allegations, the court concluded that plaintiffs could proceed with their argument that Otter functioned as a third-party eavesdropper under CIPA rather than simply a service provider acting on behalf of the meeting host.

The Otter case is part of a broader trend of litigation targeting AI note-taking technologies. In July, a proposed class action lawsuit was filed in the same court against Granola (another note taking solution provider). The complaint alleges that Granola violated privacy laws by developing software capable of recording conversations without the consent of all participants and intentionally designed its product to do so without requiring disclosure to everyone on the call.

According to the complaint, unlike some note-taking tools that rely on a bot joining a meeting, Granola captures audio directly from a user’s computer, allowing it to transcribe conversations without appearing as a meeting participant.

Takeaway – companies considering AI note-taking and transcription tools should carefully review both vendor and internal company practices, approval controls, product settings, and contractual terms to ensure compliance with applicable privacy and recording laws. Particular attention should be paid to consent requirements and whether all meeting participants receive appropriate notice before conversations are recorded or transcribed.