Is it legal for police in California to record suspects via a hidden microphone in police vehicles? If so, how can the information obtained be used?
The police are probably exempt from liability and the evidence is probably admissible pursuant to California Penal Code § 633 which states (referencing the two party consent statutes):
(a) Nothing in Section 631, 632, 632.5, 632.6, or 632.7 prohibits the Attorney General, any district attorney, or any assistant, deputy, or investigator of the Attorney General or any district attorney, any officer of the California Highway Patrol, any peace officer of the Office of Internal Affairs of the Department of Corrections and Rehabilitation, any chief of police, assistant chief of police, or police officer of a city or city and county, any sheriff, undersheriff, or deputy sheriff regularly employed and paid in that capacity by a county, police officer of the County of Los Angeles, or any person acting pursuant to the direction of one of these law enforcement officers acting within the scope of his or her authority, from overhearing or recording any communication that they could lawfully overhear or record prior to January 1, 1968.
(b) Nothing in Section 631, 632, 632.5, 632.6, or 632.7 renders inadmissible any evidence obtained by the above-named persons by means of overhearing or recording any communication that they could lawfully overhear or record prior to January 1, 1968.
Cal. Penal Code Ann. § 633.
See, e.g., People v. Clark, 372 P.3d 811 (Cal. 2016) (Tape recordings of defendant's telephone conversations with sister of murder victim admitted at murder trial did not violate state Invasion of Privacy Act, since sister was acting pursuant to direction of police inspector acting within the scope of his authority.); Armenta v. Superior Court of Santa Barbara County, 61 Cal.App.3d 584 (1976) (Section 632 was not violated when sheriff's deputies recorded conversation between enrollee in methadone maintenance program and fellow enrollee who was acting as undercover informant, since prohibition under that section does not apply to police informants); People v. Collins, 182 P.2d 585 (Cal. App. 1947) (Testimony of district attorney's stenographer, who listened in and took notes over concealed microphone equipment, was properly admitted.)
The year 1968 is when California adopted its statutory invasion of privacy law. Prior to that point and still today, the constitution's protection of privacy and requirement for warrants to do a wiretap is much narrower than the requirement under California's two party consent statute (but for Section 633 above).
I also doubt that there is a reasonable expectation of privacy while in custody in the back of a patrol car or while otherwise arrested. There is definitely no expectation of privacy in that situation if the suspects have been given Miranda warnings.
The actual requirement in California relates to an objectively reasonable expectation of privacy. My initial scans of CA case law do not indicate that it is illegal for police to record a person who is under arrest and and in the police cruiser. If two people are arrested and are in the back seat, I can sort of see that they might think they can get away with talking to each other in a way that the officers won't hear then, but clearly secrecy has to be achieved by whispering and not bu ordinary talking. So I don't see that there is a reasonable objective expectation of privacy when you are under arrest and being transported to the station. Things are different when you are talking to your attorney in an interview room.