Yeah, this is actually an interesting case and one well worth litigating. I agree with the outcome (perhaps obviously) but it's good to have it argued in open court.
>Security cameras that record audio are illegal in California.
It depends.
The two-party consent rule applies when the audio being recorded is in a location where there is an expectation of privacy because the communication is considered confidential. Generally, this doesn't apply to cameras as long as their use doesn't violate community norms and they are used in an area without an expectation of privacy. Using a security camera on your porch is fine because there is no expectation of privacy, but if the microphone is powerful enough to pick up the conversation across the street on the neighbor's porch, that is illegal.
>Security cameras that are not clearly visible (i.e., with a sign pointing them out) are also illegal in CA.
Again, it depends.
There is no two-party consent rule for video recording. You are free to put security cameras anywhere on your property (inside or outside), without notification, including hidden cameras.
There are some exceptions:
1) Commercial operators of vehicles used to transport passengers require notification to passengers when using a video recording device.
2) It is illegal to use a video recording device in the interior of a bedroom, bathroom, changing room, fitting room, dressing room, or tanning booth, or the interior of any other area in which the person has a reasonable expectation of privacy, with the intent to invade the privacy of a person. This doesn't include areas of a business used to count negotiable instruments.
3) It is illegal to use a video recording device to view the naked body or undergarments of a person, without their consent, under circumstances in which the person has a reasonable expectation of privacy.
As someone who operates two Nest cameras (one doorbell, one camera, both record audio) in California with clear line of sight towards public areas (sidewalk and street), I would really like to know what sources make you believe this is illegal. I find that claim very hard to believe.
If you are concerned about this being an issue for you. Place one of the window stickers that came with it in a front window. That should satisfy any need to notify others of possible surveillance.
I linked the law in my other comment — to this non-lawyer's reading, it forbids security cameras that capture audio, but not video-only surveillance cameras.
In California, the two-party consent rule only applies when there is an expectation of privacy.
As an example, dash cams that record audio are legal in California. However, there can be cases when somebody expects to have a confidential conversation with you (on the phone, standing next to the door, or from the backseat) and you must notify them of the audio recording.
