Whether and in what form a consumer has given consent to be contacted via an automatic telephone dialing system (ATDS) may be a crucial aspect of determining liability under the Telephone Consumer Protection Act (TCPA). Consent may preclude certain TCPA claims altogether, since the TCPA prohibits certain types of calls, including those using an ATDS, to the extent that the caller does not have “the prior express consent of the called party.” 47 U.S.C. § 227(b)(1)(A)-(B).
Recently, a growing (but not unanimous) number of courts have held that a consumer may not revoke consent if it is a term of a bargained-for contract between the consumer and caller. As a result, the ability of consumers to revoke contractually agreed-upon consent to automated communication remains unsettled and potentially ripe for a circuit split. Following these decisions and understanding the extent of their holdings could dramatically impact exposure and liability under the TCPA.
Reyes: Irrevocability of Consent in a Bilateral Exchange
In June 2017, the United States Court of Appeals for the Second Circuit held that a consumer may not unilaterally revoke consent in a bargained-for, bilateral exchange. Reyes v. Lincoln Auto. Fin. Servs., 861 F.3d 51, 53 (2d Cir. 2017). (See our earlier alert on Reyes.) In holding that a consumer’s consent is irrevocable when contractually agreed-upon, the Reyes court grounded its decision in “black-letter” contract law. The court looked to a fundamental aspect governing contractual relationships, namely that one party cannot alter or revoke a term of a bilateral agreement without the other party’s consent.
The Reyes court found that a consumer, having consented to be contacted via an ATDS, could not unilaterally revoke such consent without the caller’s permission. Importantly, the Second Circuit distinguished prior case law from the Third and Eleventh Circuits where consumers retained their ability to revoke consent because such consent was “freely and unilaterally given” in credit applications, rather than part of a bilateral contract.
A number of federal district courts across the country have followed the Second Circuit’s lead in Reyes. Despite a noticeable trend following Reyes, the case law is not unanimous. While consent provisions in consumer contracts may prove to be a valuable means of limiting exposure to the TCPA, the extent to which such provisions reduce or even eliminate the risk of TCPA liability remains an area of continued development and interpretation by the courts.
Recent District Court Decisions
In August 2018, the Middle District of Florida in Medley v. Dish Network, LLC, Case No. 8:16-cv-2534-T-36TBM, 2018 WL 4092120, at *10 (M.D. Fla. Aug. 27, 2018), held that the TCPA does not diverge from common law contract principles, and therefore consent provided by contract cannot be unilaterally revoked. Specifically, the court noted that “[n]othing in the TCPA indicates that contractually-granted consent can be unilaterally revoked in contradiction to black-letter law.” The plaintiff in Medley signed a contract with DISH in which the plaintiff explicitly consented to receive calls placed via an ATDS. The Medley court, in granting the defendant’s motion for summary judgment, held that a consumer who has consented to automated communication in a contract for services cannot later revoke such consent. In short, the court declined to “alter[ ] the common-law notion that consent [agreed to by contract] cannot be unilaterally revoked” without Congressional intent in the TCPA expressing otherwise. The court granted the defendant’s motion for summary judgment. The plaintiff has since filed a notice of appeal in Medley on September 7, 2018, which remains pending.
Similarly, the District of Connecticut declined to require that irrevocability be expressly agreed to by the parties. In Harris v. Navient Sols., LLC, Case No. 3:15-cv-564 (RNC), 2018 WL 3748155, at *2 (D. Conn. Aug. 7, 2018), the District of Connecticut rejected the plaintiff’s argument that irrevocability of consent is contingent on the parties agreeing that consent is irrevocable. Rather, the court followed the Reyes rationale that prior consent is irrevocable even if the contract is “silent on revocation.” See also Barton v. Credit One Fin., Case No. 16CV2652, 2018 WL 2012876, at *3-4 (N.D. Ohio Apr. 30, 2018) (holding consumer’s attempted oral revocation ineffective when contract required written revocation).
Some district courts, however, have diverged from the Reyes rationale. Three months following the Reyes decision, the Western District of Pennsylvania in McBride v. Ally Fin., Inc., Case No. 15-867, 2017 WL 3873615, at *2 n.4 (W.D. Pa. Sept. 5, 2017), declined to adopt Reyes “absent clearer indications in the law of [the Third] Circuit.” Nevertheless, the McBride court acknowledged that “the detailed common-law and statutory interpretations in Reyes are not without logical appeal” and that Reyes “reflects a potential sea-change in the area of TCPA-litigation.”
Additionally, the Middle District of Tennessee in Ammons v. Ally Fin., Inc., Case No. 3:17-cv-00505, 2018 WL 3134619, at *15 (M.D. Tenn. June 27, 2018), relied upon the Federal Communications Commission (FCC) 2015 Omnibus TCPA Declaratory Ruling and Order to hold that “consumer consent may be revoked at any time by any reasonable means.” In the court’s view, the 2015 TCPA Order “set forth a right of revocation pursuant to statute” and “allowing consumers to revoke consent is in keeping with the remedial, consumer-protection purposes of the TCPA.” As held by the Ammons court, consumers retain the ability to revoke their prior consent despite having a bilateral agreement with the caller.
In August 2018, the Northern District of Alabama, in Few v. Receivables Performance Mgmt., Case No. 1:17-CV-2038-KOB, 2018 WL 3772863, at *2 (N.D. Ala. Aug. 9, 2018), originally held that a consumer could not revoke prior express consent given via contract. In Few, the plaintiff signed a television and internet services contract with DISH, which authorized DISH and any debt collection agency or debt collection attorney retained by DISH to contact the plaintiff via an ATDS to collect any outstanding payment. When the defendant, a debt collection agency hired by DISH, called the plaintiff, the plaintiff attempted to revoke consent. The defendant continued to contact the plaintiff, and the plaintiff subsequently brought suit alleging that the defendant’s ongoing communication violated the TCPA. The Few court, in applying Reyes, originally granted the defendant’s motion for summary judgment and held that the plaintiff’s attempt to revoke consent was ineffective because she provided consent via contract and “not merely gratuitously.” Despite its prior opinion, on November 13, 2018, the Few court granted the plaintiff’s motion for reconsideration in holding that it erroneously relied on Reyes. See Few v. Receivables Performance Mgmt., Case No. 1:17-CV-2038-KOB, 2018 WL 5923765, at *1 (N.D. Ala. Nov. 13, 2018) (holding that the court should have relied upon binding Eleventh Circuit precedent allowing for revocation of consent in the absence of a contractual restriction on the means by which a consumer may revoke consent). The Few court entered a separate opinion and order denying an alternative TCPA argument presented by the defendant in a dispositive motion as premature because the parties have not yet engaged in discovery. See Few v. Receivables Performance Mgmt., Case No. 1:17-CV-2038-KOB, 2018 WL 5923767, at *1 (N.D. Ala. Nov. 13, 2018).
Conclusion
Revocation of consent will remain at the forefront of TCPA-related jurisprudence as this issue continues to develop in the federal district and appellate courts. While there is a trend towards enforceable consent by contract, divergence does exist among the district courts. Furthermore, to the extent that the FCC attempted to weigh in on this issue in its July 2015 TCPA Order by ruling that consumers can revoke consent “at any time and through any reasonable means,” in March 2018, the United States Court of Appeals for the DC Circuit held that the order does not address the ability of contracting parties to adopt revocation rules and procedures. ACA Int’l v. FCC, Case No. 15-1211, 2018 WL 1352922, at *18 (D.C. Cir. Mar. 16, 2018). As a result, the law in this area will continue to evolve until more circuit court precedent is established, or the FCC provides clear guidance on this question. This divergence from the bench brings the risk of TCPA liability and a lack of clarity for defendants in TCPA litigation.
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