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You Can’t Always Get What You Want—Second Circuit Affirms Parties Can Bargain Away TCPA Right To Revoke Consent To Automated Calls

As the Rolling Stones famously sing, “You can’t always get what you want.” And in the ever treacherous world of the Telephone Consumer Protection Act (“TCPA”), 47 U.S.C. § 227, et seq., the Second Circuit has ruled that means a party to contract cannot unilaterally revoke consent to receive automated calls.

In Reyes v. Lincoln Automotive Financial Services, — F.3d —-, 2017 WL 2675363 (2d Cir. June 22, 2017), the Second Circuit became the first court of appeals to decide whether a person can bargain away his or her TCPA right to revoke consent to be called. Delivering some good news to businesses continually beset by an endless wave of TCPA litigation, the court answered that question in the affirmative. It held that the TCPA does not alter the common law of contracts and thus it “does not permit a party who agrees to be contacted as part of a bargained-for exchange to unilaterally revoke that consent.” (Slip at 12.)

In Reyes, the plaintiff leased a car from Lincoln, and Lincoln financed the lease. Reyes provided several personal details in his lease application, including his cell phone number, and “expressly consent[ed] and agree[d]” that Lincoln could contact him via prerecorded, autodialed calls on his cell phone. When Reyes stopped making payments, Lincoln called him hundreds of times on his cell phone to cure his default. But Reyes asserted he had revoked his consent to receive such calls, and sued Lincoln under the TCPA. Reyes sought over $720,000 in statutory damages.

The district court granted judgment in favor of Lincoln, holding the TCPA does not permit a party to a binding contract unilaterally to revoke bilateral, bargained-for consent to be contacted on a telephone. The Second Circuit affirmed that conclusion. In doing so, the court was not writing on an entirely blank slate. In Gager v. Dell Financial Services, LLC, 727 F.3d 265 (3d Cir. 2013), and Osorio v. State Farm Bank, F.S.B., 746 F.3d 1242 (11th Cir. 2014), the Third and Eleventh Circuits each held a plaintiff could revoke consent to receive autodialed calls where the called party had gratuitously provided consent to be called on a cell phone. But the Second Circuit distinguished Gager and Osorio on the ground that the plaintiffs in those cases (unlike Reyes) did not consent to receive autodialed calls as part of consideration for a bilateral contract.

In reaching its holding, the Second Circuit relied on the common law principle that “consent to another’s actions can ‘become irrevocable’ when it is providing in a legally binding contract.” As the court explained, “[i]t is black-letter law that one party may not alter a bilateral contract by revoking a term without the consent of a counterparty.” Absent any contrary statutory language, the Second Circuit concluded the Congress did not, through the TCPA, intend to alter the common law of contracts.

The full impact of Reyes will take time to play out in the Second Circuit and elsewhere, including the Federal Communications Commission. But the case does make clear that contractual agreements to receive autodialed telephone calls are enforceable and can be used to limit TCPA liability.

Copyright © 2017, Sheppard Mullin Richter & Hampton LLP.

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About this Author

Paul A. Werner, Litigation Attorney, Sheppard Mullin, Law firm
Partner

Mr. Werner is a partner in the Business Trial Practice Group in the firm's Washington D.C. office.

Mr. Werner is a seasoned first-chair litigator, whose prodigious representations over the past decade have been before all levels of courts and administrative tribunals, federal and state, and spanned a wide range of complex litigation matters. These matters have run the gamut from high-stakes, “bet the company” commercial disputes to disputes involving statutory, constitutional, communications, energy, environmental, insurance, intellectual...

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David M. Poell, business law Lawyer, Sheppard Mullin
Associate

David Poell is an associate in the Business Trial Practice Group in the firm’s Chicago office with an emphasis in the areas of consumer privacy and class action litigation.

Areas of Practice

A large portion of Mr. Poell’s practice is devoted to defending companies against class and individual actions brought under various state and federal consumer protection statutes, including the Telephone Consumer Protection Act (TCPA) and the Fair and Accurate Credit Transactions Act (FACTA), as well as other consumer-privacy and unfair business practices laws and regulations. He also advises companies regarding privacy and direct-marketing matters, such as drafting privacy policies and providing guidance on compliance with FCC, FTC and state-specific rules and regulations. 

312-499-6349