Second Circuit Court of Appeals Clarifies that Consent under the Telephone Consumer Protection Act Cannot Be Unilaterally Revoked if Given as Part of a Binding Contract
The Second Circuit Court of Appeals recently issued a precedent-setting opinion concerning the Telephone Consumer Protection Act (“TCPA”). The TCPA, amongst other provisions, includes a broad prohibition against using an autodialer (including automated or prerecorded calls) to call consumers’ cell phones without the prior express consent of the consumer. In the case of Reyes v. Lincoln Automotive Financial Services, opinion issued June 22, 2017, the Court held that the TCPA does not permit a consumer to revoke his or her consent to receive automated or prerecorded cell phone calls if the consumer’s consent to receive those calls were part of a binding contract.
This case involved a delinquent borrower who brought a class action against an auto lender. The consumer had financed a car through the auto lender and, as a condition of the lease agreement, provided his cell number on the lease application to the lender. However, the lease also contained a provision in which the consumer “expressly consented” to the auto lender contacting him by “written, electronic or verbal means.” These means of contact included “contact by manual calling methods, prerecorded or artificial voice messages, text messages, emails and/or automatic telephone dialing systems,” which are otherwise generally prohibited under the TCPA. The lease agreement further permitted the auto lender to contact the consumer at “any telephone number you provide, now or in the future,” and this included any numbers of a “cellular phone or other wireless device.”
The consumer subsequently brought a class action TCPA lawsuit in the district court. In that underlying case, the Court granted summary judgment – a judgment without a trial – in favor of the defendant auto lender. A key element of the district court’s decision was that the consumer could not unilaterally revoke his consent under the TCPA which he gave to the auto leader as part of the legally binding lease contract. The Second Circuit upheld this decision upon appeal.
This decision represents a powerful and key clarification of the TCPA, as the TCPA requires prior express consent in connection with autodialed live or prerecorded calls, the TCPA remains silent on whether a party can subsequently revoke that consent in certain circumstances. Thus, at least in the Second Circuit, where consent is provided as part of a binding contract, it appears that the consumer will not be able to unilaterally change his or her mind after the fact and pursue litigation. Of course, this decision does not necessarily affect situations in which a consumer might give consent outside of a contract.
For now, the Reyes decision is binding, precedential law only within the Second Circuit (NY, VT, CT). It remains to be seen whether other courts will follow a similar trend or if Congress will weigh in and resolve the issue. As a result, businesses and industry providers should continue to be cautious when exploring options to limit their exposure to similar consumer suits and to comply with the TCPA by adding similar provisions to that of the auto lender in Reyes. In the meantime, the attorneys at Rock Fusco & Connelly, LLC can help businesses, lenders, and industry professionals alike to remain in compliance and avoid this potentially costly litigation.