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Second Circuit Narrows Revocation of Consent Under the TCPA

Earlier this month, Justice Gorsuch’s opinion in Henson v. Santander Consumer USA, Inc. served as a reminder that courts should refrain from reading absent terms into clear and unambiguous statutory language.  On June 22, the Second Circuit followed this directive in Reyes v. Lincoln Automotive Financial Services, and affirmed dismissal of a consumer’s claim that the Telephone Consumer Protection Act allowed him to revoke his previously bargained-for express consent to receive calls on his cellular telephone.  In a case of first impression, the Second Circuit held that the plain language of the TCPA does not permit a party, who agrees to be contacted as part of a bargained-for exchange, to revoke such consent unilaterally.

At first glance, Reyes presented a familiar fact pattern: Lincoln financed Reyes’ lease of a new Lincoln MKZ luxury sedan.  The lease agreement contained a provision stating:

You [Reyes] also expressly consent and agree to Lessor [Ford], Finance Company [Lincoln], Holder and their affiliates, agents and service providers may use written, electronic or verbal means to contact you.  This consent includes, but is not limited to, contact by manual calling methods, prerecorded or artificial voice messages, text messages, emails and/or automatic telephone dialing systems.  You agree that Lessor, Finance Company, Holder and their affiliates, agents and service providers may use any email address or any telephone number you provide, now or in the future, including a number for a cellular phone or other wireless device, regardless of whether you incur charges as a result.

Reyes eventually stopped making payments on the lease, and Lincoln began calling him in an attempt to obtain payment.  Reyes claimed that he sent Lincoln a letter asking that Lincoln cease all calls to his cell phone.  Lincoln, in turn, had no record of receiving Reyes’ letter, and confirmed that it called Reyes 389 times with a pre-recorded message after Reyes purportedly sent his letter. The only copy Reyes produced during discovery contained no address or postmark, and referenced the wrong account number.  Reyes argued that Lincoln violated the TCPA by continuing to call his cell phone with a pre-recorded message after his written revocation of consent.

Rather than focus on whether Reyes’ purported revocation was effective, Lincoln took a different path.  It argued that because Reyes’ provision of consent to receive calls on “any telephone number” was given as bargained-for consideration in a bilateral contract rather than given “gratuitously,” Reyes could not unilaterally revoke that consent.  The district court agreed, and dismissed Reyes’ TCPA claims.

The Second Circuit affirmed, and its reasoning provides some much-needed ammunition to defendants facing potentially devastating TCPA claims.  First, the Court explained that although the text of the TCPA gives no reason for courts to define “consent” in any manner than that afforded by common law, even under common law “consent” is not always revocable.  The Court took pains to distinguish Reyes, both factually and legally, from the Third Circuit’s opinion in Gager v. Dell Financial Services, LLC and the Eleventh Circuit’s opinion in Osorio v. State Farm Bank, F.S.B.  Both Gager and Osorio those cases concerned consumers who gave consent “freely and unilaterally,” whereas Reyes gave his consent to receive calls on his cell phone as part of a bilateral contract.  Where “consent” is provided in a legally binding agreement, any modification to such consent must “receive the mutual assent of every contracting party in order to have legal effect.”  In other words, Reyes lacked authority to modify or revoke any contractual term unilaterally, including his consent to receive calls on his cell phone, without Lincoln’s consent.

The Second Circuit also rejected Reyes’ familiar entreaty that the Court interpret the TCPA broadly to effectuate Congress’ stated goal of protecting consumers from unwanted telephone calls.  The Court stated, “[F]or the remedial rule of statutory interpretation to apply, the statute must contain an actual ambiguity to construe in the consumer’s favor, and we find no lack of clarity in the TCPA’s use of the term ‘consent.’”  The Court concluded by rejecting Reyes’ argument that businesses could simply skirt the TCPA by inserting “consent” clauses into contracts, reminding the parties that the Court cannot “substitute our own policy preferences for those of the legislature by reading a right to revoke contractual consent into the TCPA where Congress has provided none.”

As courts throughout the country recognize, where statutory language is clear, the plain meaning of the statute governs.  Reyes gives TCPA defendants a strong statutory language defense to claims alleging revocation of prior express consent.  However, Reyes leaves little doubt that future lawsuits will focus on whether such express consent was given “gratuitously” or as part of bargained-for consideration.