## Facts

- Newell and Juanita Spears owned and operated the White Oak Package Store and lived in a nearby mobile home; the store and home shared a single telephone line with an extension.
- After a burglary in which about $16,000 was stolen, the Spearses suspected employee Sibbie Deal and sought to capture incriminating calls.
- Newell Spears installed a recording device on the home extension that, when activated, automatically recorded all calls on the shared line without notice to callers.
- The device recorded calls from June 27 to August 13, 1990, producing about 22 hours of recordings.
- Many intercepted calls were personal and sexually explicit conversations between Deal and Calvin Lucas, who was not an employee.
- Newell Spears listened to the recordings, including calls plainly unrelated to any theft investigation.
- Newell played part of a recording for Deal to show her the calls were being taped; Deal was later fired.
- Deal and Lucas sued under the federal wiretap statute (Title III), alleging unlawful interception and disclosure/use of wire communications.

## Issues

1. Whether Deal (and thus Lucas) impliedly consented to interception of the calls under 18 U.S.C. § 2511(2)(d).
2. Whether the interception was exempt as use of telephone equipment in the ordinary course of business under the business extension/ordinary-course exception in 18 U.S.C. § 2510(5).
3. Whether the plaintiffs were entitled to punitive damages under 18 U.S.C. § 2520.

## Decision

- The Eighth Circuit affirmed the judgment for Deal and Lucas.
- The court held there was no implied consent to continuous recording of all calls.
- The court held the business extension/ordinary-course exception did not apply to a separate recording device and indiscriminate, weeks-long taping of personal calls.
- The court upheld statutory damages of $40,000 and an award of attorneys’ fees.
- The court affirmed denial of punitive damages.

## Legal Principles

- Title III imposes civil liability for intentional interception of wire communications and for intentional disclosure or use of their contents, absent a statutory exception. 18 U.S.C. § 2511(1); § 2520.
- Implied consent must be actual and clearly indicated by the circumstances; a warning that calls “might” be monitored, or awareness that an extension could be picked up, does not equal consent to systematic recording.
- The business extension/ordinary-course exception is limited; broad, indiscriminate monitoring that captures personal conversations is not “in the ordinary course of business,” and a separate recording device is not treated as exempt extension equipment.
- Punitive damages under § 2520 require wanton, reckless, or malicious conduct; a factfinder may deny punitive damages where defendants acted partly to investigate a theft and relied on law-enforcement reassurance, even though the interception was intentional and unlawful.

## Conclusion

The court held that an employer’s covert, continuous recording of all calls on a shared business/home line violated Title III because neither implied consent nor the ordinary-course business exception applied, and it affirmed statutory damages and fees while leaving punitive damages unavailable on the facts found.


Deal v. Spears, 980 F.2d 1153 (8th Cir. 1992)