Contracts 101: Court Rules Contractual TCPA Consent Is Irrevocable Even if the Contract Doesn’t Specifically Say So
Well it has been a while since we’ve had anything to report regarding case law developing around “Good Reyes”–Reyes v. Lincoln Auto. Fin. Servs., 861 F.3d 51, 56 (2d Cir. 2017), as amended (Aug. 21, 2017). Indeed, with all the recent hullabaloo regarding seesaw ATDS decisions you have to go back to the very first Ramble podcast to hear anything regarding revocation of contractual consent. At that time we were discussing the Barton decision–the first out of circuit case to apply Good Reyes and a killer decision on contractual revocation provisions. But finally there is something new to report on the revocability–or lack thereof–of contractual consent provisions.
In Harris v. Navient Solutions, Case No. 3:15-cv-564 (RNC), 2018 WL 3748155 (D. Conn. Aug. 7, 2018) the district court held that Good Reyes governed the revocation dispute before it and granted summary judgment to the defendant on Plaintiff’s Telephone Consumer Protection Act (“TCPA”) claim in light of a contractual consent provision contained within the consumer’s student loan agreements.
Some background: The TCPA prevents calls made using (un)certain regulated technology without the express consent of the called party. Although the statute is silent on the issue of revocation, most courts apply the common law of consent to the statute for some reason and, as such, commonly hold that express consent can be revoked under most circumstances. Most circumstances do not include those circumstances where consent is given in a contractual term, however. In those instances–at least according to the Second Circuit Court of Appeal in Good Reyes–consent is irrevocable to the same extent as any other contractual clause. So if you sign an agreement allowing your student loan servicer to call you with robocalls you’re stuck receiving those calls more or less forever (or until you pay your darn bill.)
Notably–as with everything in TCPAland it seems–not all courts agree. Indeed, a considerable number of cases have refused to apply the reasoning of Good Reyes because they feel consent provisions are different than other contractual provisions because… well… I’m not really sure why but that’s what they find. In light of this seesaw battle, anytime a new case comes down applying Good Reyes it is a newsworthy event, and so here we are giving you the worthy news.
To the point: in Harris the Defendant moved for summary judgment arguing that the consent provision contained in the Plaintiff’s promissory notes were binding and irrevocable, affording a complete defense to her TCPA claim. The clause read:
I understand that you may use automated telephone dialing equipment or an artificial or prerecorded voice message to contact me in connection with this loan or loan application. You may contact me at any telephone number I provide in this application or I provide in the future, even if that number is a cellular telephone number.
The Harris court begins its analysis noting that Good Reyes is binding upon it (Connecticut is in the Second Circuit after all) and recites the rule of Good Reyes as “the TCPA does not permit a party who agrees to be contacted as part of a bargained-for exchange to unilaterally revoke that consent.” Harris at *2. From there the analysis is quick: “It is undisputed that plaintiff consented to receiving ATDS calls when she signed her promissory notes. This fact is dispositive under Reyes.” Id. Done.
Crucially, the Court rejected Plaintiff’s argument that contractually-provided consent is irrevocable only when the parties expressly agree by contract that consent is irrevocable. The Harris court correctly pointed out that the clause in Reyes contained no such provision deeming consent irrevocable; instead consent was deemed irrevocable by operation of basic contract principles– the terms of a written agreement bind the parties’ relationship thereunder unless those terms are modified as contemplated by the agreement itself. Plaintiff had not demonstrated any such modification. So the case was over.
Finally, the Court made short work of the Plaintiff’s reliance on FCC orders suggesting that consent can sometimes be revoked. Harris points out that the Reyes Appellants had made a similar argument and been shot down by the Second Circuit panel which had distinguished those FCC orders as limited to gratuitous consent circumstances, not contractual consent.
All in all Harris is a brief but mighty decision. It triumphantly rejects the assertion that contractual consent clauses are only irrevocable if the contract says as much. The law is actually quite the contrary–at least in the Second Circuit–in the absence of a contractual revocation procedure the contractual consent provision is per se irrevocable. Where a contract does contain a revocation provision, however, the consumer can revoke consent, but only in the manner specified by contract.