Reversal of Fortune: Court Reconsiders and Reverses Earlier Ruling Finding That Contractual Consent Cannot Be Revoked
As of yesterday, the “Good Reyes” contractual consent decision in Tina Few v. Receivables Performance Management out of the Northern District of Alabama has officially been reconsidered and reversed. Cue the sad trombone. As we break it down for you below, the court was ultimately convinced on reconsideration that it had misapplied the Eleventh Circuit’s holding in Osorio, and that – according to the Eleventh Circuit – contractual consent may be unilaterally revoked unless there’s a specific contractual provision to the contrary. So while the court recognized that the right to revoke may be limited by a specific contractual provision, it seems to have singled out contractual consent clauses as being outside the purview of common law contract rules that forbid the unilateral revocation of contract terms.
As we reported back in August, the court in Few had originally held – in reliance on Good Reyes – that the Plaintiff “could not unilaterally revoke her consent to receive debt-collection calls because she agreed to provide that consent as part of a bargained-for exchange.” The court’s decision was also (originally) based upon its reading of the Eleventh Circuit’s holding in Osorio – that common law concepts allow the unilateral revocation of consent, but only “in the absence of any contractual restriction to the contrary” – which the court then applied to the facts before it, stating that “Ms. Few does not dispute that she contractually agreed to allow Receivables to make the phone calls at issue.”
Following the original decision, Plaintiff moved for reconsideration arguing that the court committed a “manifest error of law” in holding that Plaintiff could unilaterally revoke contractual consent. And the court agreed. So what changed between then and now?
Nothing, actually. But the court revisited some of the authorities surrounding its original ruling, and decided that it was wrong, and that a consumer may freely revoke contractual consent unless some term in the contract limits that right. The court’s decision to reconsider was based namely on its finding that it had “failed to correctly follow Osorio v. State Farm Bank, F.S.B., 746 F.3d 1242 (11th Cir. 2014),” which held that, “‘in the absence of any contractual restriction to the contrary,’ consumers ‘were free to orally revoke any consent previously given.’” And because there was no such “restriction” in Plaintiff’s contract (you know, other than those pesky fundamental rules of contract law), that meant Plaintiff was free to orally revoke her consent at any time.
Specifically, the court reasoned this time around that “the contractual grant of consent is not a ‘contractual restriction to the contrary’ under Osorio because it does not restrict the means of revocation.. The court then provides an example, stating that “a contract provision stating that Ms. Few may revoke consent only in writing would be a ‘contractual restriction to the contrary’ of Ms. Few’s right to ‘orally revoke any consent previously given,’ and would therefore invalidate Ms. Few’s oral revocation.” Few v. Receivables Performance Mgmt., LLC, No. 1:17-CV-2038-KOB, 2018 U.S. Dist. LEXIS 192854, at *7 (N.D. Ala. Nov. 13, 2018) (citing Osorio, 746 F.3d at 1255).
But let’s apply that logic to other terms. Isn’t the Court then saying that a consumer may unilaterally modify or revoke other terms of their contracts in the same manner? Surely a consumer can’t unilaterally say they no longer want to pay interest on their loan, or change other terms of their contract like in the same way? So what differentiates a contractual consent term, from a contractual interest term? Well, the court doesn’t say, and this is part of the problem with this approach. It places different types of contractual provisions on different footing, and says that the common law (preventing unilateral revocation or modification of contract terms) applies to some but not other types of provisions.
Based on the court’s finding that it had committed a manifest error of the law, it reversed its original ruling granting summary judgment to Defendant, then revisited a question it didn’t reached in the motion: whether the Defendant had used an ATDS. The court found that Few “ha[d] not had the opportunity to dispute whether Receivables used an ATDS or an artificial or prerecorded voice because Receivables brought its motion for summary judgment before discovery began.” It therefore denied the motion, and the parties are off to fight over whether the LiveVox Human Clicker Application – yes the very system that has repeatedly been held by courts not to constitute an ATDS – is really an ATDS.
We don’t see any reason why the outcome would be different in this case. But then again, the Plaintiff did pull a rabbit out of the hat on reconsideration, and who knows if they might do it again…