Second Circuit Denies Rehearing in Key TCPA Case
Businesses that have not already done so should consult with counsel regarding "consent to be called" provisions in their consumer contracts in the wake of the decision by the U.S. Court of Appeals for the Second Circuit denying a rehearing in Reyes v. Lincoln Automotive Financial Services.
The Reyes decision marked a turning point in Telephone Consumer Protection Act (TCPA) litigation by holding that consent to be called under the TCPA cannot be revoked when that consent is part of the bargained-for exchange memorialized in the parties' contract. In Reyes, an automobile-lease agreement expressly authorized the lessor to contact the lessee using prerecorded or artificial-voice messages, text messages, emails, and/or automatic telephone-dialing systems.
Relying on the bilateral nature of contract law—where one party cannot unilaterally alter a contract term without the mutual assent of the other party—the Second Circuit reasoned that TCPA consent cannot be unilaterally revoked by the consumer when the consent is provided as part of a bargained-for exchange.
Although the Second Circuit is the only circuit court to directly address this issue, the 2014 decision of the U.S. Court of Appeals for the 11th Circuit in Osorio v. State Farm Bank, in which the court stated that the plaintiffs were free to orally revoke consent "in the absence of any contractual restriction to the contrary," suggests that it would have reached the same conclusion.
The consent in Osorio was implied when the plaintiff's roommate orally provided the plaintiff's cell phone number to the defendant—not as part of a bargained-for agreement. As such, the case held that consent can be revoked, but it did so in a different context—when consent was given gratuitously, rather than as part of a bargained-for exchange.