Sutter Health And MemorialCare Hit With Class Action Over AI Transcription

Sutter Health and MemorialCare Hit With Class Action Over AI Transcription

Last updated: 2026/04/12 at 2:08 PM

News Room Published 12 April 2026

Two major healthcare providers, Sutter Health and MemorialCare, have been hit with a class-action lawsuit in California over allegations that they used AI to record and transcribe patient conversations without their consent.

The suit, first spotted by Ars Technica, claims that the companies used software developed by Abridge AI, sometimes dubbed an “ambient clinical documentation” system. This technology was allegedly used during patient encounters to capture and transcribe physician–patient conversations, using microphone-enabled devices in examination rooms.

Abridge’s software allegedly transmitted the audio of the clinical encounters to external servers for automated transcription and analysis, and generated draft clinical notes that were added to the patients’ health records, including personal data about health conditions.

Plaintiffs claim they did not receive clear notice that their medical conversations would be recorded, transmitted outside the clinical setting, or processed through third-party systems, in contravention of California privacy laws.

Sutter spokesperson Liz Madison told Ars Technica that it takes “patient privacy seriously” and that it is “committed to protecting the security of our patients’ information.”

She added: “Technology used in our clinical settings is carefully evaluated and implemented in accordance with applicable laws and regulations.”

Wendy Dow, a spokesperson for MemorialCare, commented: “We don’t comment on pending litigation.”

AI transcription has been at the crux of several recent lawsuits in California, invoking the state’s privacy legislation. In April, AI transcription software firm Otter was hit with a case accusing it of “deceptively and surreptitiously” recording private conversations without getting necessary permission from meeting attendees to record their communications. The case concerned its Note Taker product which can automatically create meeting notes via its integration with Zoom and Microsoft Teams.

Bradford Kelley, a lawyer at Littler Mendelson, told HR Executive earlier this month that “AI transcription and recording issues are a hot topic,” highlighting issues like different states’ standards of consent when recording meetings.