On June 22, 2017, the US Court of Appeals for the Second Circuit—addressing what the court characterized as an issue of first impression for the federal circuit courts—held that the Telephone Consumer Protection Act (“TCPA”) does not permit consumers to revoke their consent to receive calls on their cell phones if they are parties to contracts in which their consent formed part of the bargained-for exchange.
The TCPA prohibits the use of autodialing technology and prerecorded messages to place calls to cell phones without the prior express consent of the called party. In Reyes v. Lincoln Automotive Financial Services, the plaintiff had entered into an auto lease that was financed by the defendant and that expressly permitted the defendant to contact him on his cell phone by any means. When he stopped making required payments, the plaintiff claimed that the defendant violated the TCPA by continuing to call him on his cell phone after he sent a letter to the defendant revoking his prior consent.
The Second Circuit affirmed summary judgment for the defendant. The court acknowledged that the Federal Communications Commission (“FCC”), following decisions by other circuit courts, ruled in 2015 that consent is revocable under the TCPA. In that ruling, the FCC relied on both the remedial purpose of the TCPA and the common-law meaning of consent in clarifying that consent is revocable under the TCPA “at any time and through any reasonable means” and that a “caller may not limit the manner in which revocation may occur.” (30 FCC Rcd. 7961, 7989-90.) But the Second Circuit construed that FCC ruling to apply only where consumers have “freely and unilaterally” given their consent. Noting that the FCC interpreted the TCPA to incorporate the common-law meaning of consent, the court explained that at common law, consent is revocable when it is “gratuitous” but may become irrevocable when included as an express term of a legally binding contract; in that case, the contract terms cannot be altered without the mutual assent of every party. Accordingly, the court concluded that the plaintiff’s contract barred him from unilaterally revoking his prior consent. Finding that this conclusion was well-established at common law and that the TCPA’s use of the term “consent” was therefore unambiguous, the court rejected the plaintiff’s argument that the remedial purpose of the TCPA favored an interpretation permitting unilateral revocation of consent.
This potentially is a significant decision because businesses could try to use it to cut off TCPA litigation by inserting consent clauses into standard contracts. The Second Circuit even noted this possibility (explaining that this is a policy concern for Congress, rather than the courts, to address). But businesses seeking to rely on contractual consent clauses—especially businesses operating outside the Second Circuit—will have to weigh the possibility that other courts will not adopt the Second Circuit’s approach. Thus, some uncertainty likely will surround this issue pending additional guidance from other circuit courts, the FCC or the US Supreme Court.