One of the key issues in any case under the Telephone Consumer Protection Act (TCPA) is whether the plaintiff consented to be called or texted.  If the recipient has provided “prior express consent,” the TCPA permits calls or texts to either (i) wireless numbers using autodialers or artificial or prerecorded voices; or (ii) residential telephones using artificial or prerecorded voices.  47 U.S.C. § 227(b)(1)(A)(iii) (cellular telephones); id. § 227(b)(1)(B) (residential telephones).  Courts currently are divided on the impact of contracts specifying that consumers agree in advance to receive such calls or texts.

Background

In its 2015 declaratory ruling and order, the FCC concluded that consumers may “revoke consent” to such calls “at any time and through any reasonable means,” whether verbally or in writing, and that companies may not prohibit revocation or restrict the means for doing so.  Since that order, it has been routine for plaintiffs who initially consented to be autodialed to allege that they revoked that consent in some fashion—such as by sending a letter or email or by telling a store or call-center employee—and then were called or texted in violation of the TCPA.

In 2018, in ACA International v. FCC (pdf), the D.C. Circuit invalidated most of that 2015 order, but affirmed the FCC’s ruling that consumers can revoke consent.  (See our reports on the FCC’s 2015 order and the D.C. Circuit’s ACA International decision.)

Court decisions

Since the FCC’s 2015 ruling, courts have divided over whether consumers’ unfettered right to revoke their consent to be called applies to consents that were provided as consideration for a contract.

This issue was left open by the FCC, which did not consider contractual consents in recognizing a right to revoke consent to be called.  In recognizing that right, the FCC observed that it followed from the “well-established common law right to revoke prior consent” articulated in the Restatement (Second) of Torts.

The only three courts of appeals to consider the question—the Second, Eleventh, and D.C. Circuits—have agreed that the FCC’s 2015 order did not address a consumer’s purported right to revoke a contractually binding consent to be called.  In ACA International, the D.C. Circuit held that the FCC’s rule concerning revocation applies only to limitations unilaterally imposed by companies.  The court emphasized that if “callers and consumers … contractually agree[] to revocation mechanisms[,] … [n]othing in the [FCC]’s order … should be understood to speak to” to validity of those agreements.

The Second Circuit went even further in Reyes v. Lincoln Automotive Financial Services, holding not only that the FCC failed to consider whether contractual consents can be revoked, but expressly concluding that “the TCPA does not permit a party who agrees to be contacted as part of a bargained-for exchange to unilaterally revoke that consent[.]”  The court explained that unlike in tort, where consent “is generally defined as a gratuitous action” that can be “revoked by the consenting party at any time,” under contract law, “consent to another’s actions can ‘become irrevocable’ when it is provided in a legally binding agreement.”  The court then concluded that nothing in the TCPA reflects a congressional intent to abrogate this fundamental character of “the common law of contracts.”

The Eleventh Circuit recently reached the same conclusion in Medley v. Dish Network, LLC, holding that nothing in the TCPA “allows unilateral revocation of consent given in a bargained-for contract.”  The court rejected the plaintiff’s argument that the FCC’s 2015 ruling conferred a statutory right on consumers to revoke consent given as part of a contract, explaining that “the 2015 FCC Ruling did not address contractual consent . . . given in a legally binding agreement.”

Some district courts, however, have reached the opposite conclusion and allowed plaintiffs to revoke consent regardless of whether that consent was part of a contract.  Some of these courts believed themselves bound by the FCC’s 2015 order.  See, e.g., Cartrette v. Time Warner Cable, Inc. (E.D.N.C.).  But virtually all of those decisions predate ACA International, which clarified that “[n]othing in the Commission’s order” regarding revocation “should be understood to speak to” consents provided as part of a contract.

Other district courts conclude that contractual consents to be contacted are not truly “essential” parts of the contract, as consumers entering into a loan, for example, typically don’t receive separate consideration for having agreed to be called.  See, e.g., Ammons v. Ally Fin., Inc. (M.D. Tenn.).  But that line of reasoning cannot be squared with contract law, which treats all obligations imposed on one party of the contract to be consideration for all obligations imposed on the other party—without requiring point-by-point mutuality of consideration for each separate obligation imposed by a contract.  For example, a tenant’s obligation to pay rent is typically treated as sufficient consideration to support not only the landlord’s obligation to provide habitable premises, but also to provide any additional amenities or utilities that the lease mandates.

Other district courts reason that even if contractual consents are non-revocable, the consumer’s consent is invalid because it doesn’t pass muster under the “knowing and voluntary” test commonly applied to guilty pleas and other waivers of constitutional rights.  See, e.g., Skinner v. Bluestern Brands, Inc. (S.D. Miss.).  To be sure, many contractual consents would satisfy that standard.  But state contract law typically doesn’t impose such a heightened burden.  And nothing in the TCPA does so.

Still other courts have allowed consumers to revoke contractual consents because nothing in the contract actually barred the consumer from revoking consent.  See, e.g., Rodriguez v. Premier Bankcard, LLC (N.D. Ohio).  That issue should not often recur, as companies can draft around that issue by expressly stating that the consumer’s consent cannot be revoked except by mutual agreement of the parties.  Moreover, as a general matter, it is a stretch to say that a contract’s silence on the issue of revocation is enough to allow the non-drafting party to unilaterally negate his or her obligations under the contract.  After all, even the public policy doctrine that ambiguities in a contract should be construed against the drafter presupposes multiple reasonable constructions of the contract; a construction that allows one party to unilaterally discard his or her obligations under the contract can hardly be said to be reasonable.

Finally, a federal district court in Nevada has concluded that an unpublished Ninth Circuit decision barred it from following ReyesSinger v. Las Vegas Athletic Clubs (D. Nev.).  But in that case, the Ninth Circuit did not consider whether the contractual nature of the consent barred revocation; instead, the only issue was whether the consumer had actually presented any evidence of revocation to contradict the company’s proof that its employees had never spoken with her.

Bottom line

In sum, although (in our view) Reyes and Medley were rightly decided, and despite the D.C. Circuit’s clarification that the FCC’s 2015 order does not bar companies and consumers from entering into binding contracts permitting autodialed calls, litigation over the revocation of consent issue is likely to continue.  Companies that may be targeted by TCPA lawsuits therefore should consider whether they can contract with consumers for the right to contact them and, if so, how best to make sure that such agreements are validly presented to and accepted by consumers and explain comprehensively if and how consumers may opt out of future calls.

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