Commentary Addressing Risks and Opportunities Through the Lifecycle of Data, Technology, Advertising and Innovation

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<img class="alignright size-medium wp-image-5003" src="https://dataprivacymonitor.bakerhostetlerblogs.com/wp-content/uploads/sites/5/2017/07/Phone_83402576-300x200.jpg" alt="" width="300" height="200" />The Telephone Consumer Protection Act (TCPA) was enacted as a consumer protection measure against companies that engage in telemarketing practices. The basic principle of the TCPA is that it seeks to prohibit a company from making “any telephone call to any residential telephone line using an artificial or prerecorded voice to deliver a message without the prior express consent of the called party.” 47 U.S.C. § 227(b)(1)(B). The deterrent for such acts is a hefty fine of up to $1,500 per incident (per call in this case, a number that can quickly add up).

But what happens if an individual gives a company “express written consent” and later seeks to revoke that consent? Prior case law, and a 2015 Federal Communications Commission (FCC) ruling, had stated that a consumer who freely gives informed consent may revoke it by “any reasonable means.” There have been various cases where the plaintiffs have successfully claimed that they revoked their initial consent and were therefore entitled to damages under the TCPA. The Second Circuit, in <em>Reyes v. Lincoln Automotive Financial Services</em>, No. 16-2104-cv, however, draws a clear distinction with those rulings and comes out stating that express consent can, in certain cases, be irrevocable.

In <em>Reyes</em>, the customer leased a brand-new Lincoln and provided his cell phone number in his lease application. There was express consent in the contract that allowed the company to contact him at that number, via “recorded messages, text messages and automatic dialing systems,” among other means. Reyes eventually stopped making payments, and the leasing company made efforts to collect on what was due to it with repeated calls to the number Reyes had provided. Reyes testified that he sent a written letter to Lincoln revoking consent and sued for damages under the TCPA, alleging that the company did not have consent to call him after he revoked his initial consent.

The Second Circuit found that while there was sufficient evidence to support that Reyes had revoked consent, the TCPA does not allow for a party to revoke his express written consent to be contacted if that express written consent was given as part of a “bargained-for exchange” in a bilateral agreement. This is in stark contrast to prior cases in the Third and Eleventh circuits that stated that consent could in fact be revoked. In its reasoning for this unanticipated decision, the Second Circuit pointed to a clear distinction in those prior cases, the issue in them being whether the TCPA permitted revocation by a consumer who had unilaterally given his consent. The key distinction, then, is the type of contract under which the consent was given. In a bargained-for bilateral contract, no revocation would be allowed. If, however, the consent was given in a unilateral contract such as a credit card application, revocation would indeed be allowed. In making this decision, the Second Circuit relied heavily on established contract law principles, stating that terms within a bargained-for agreement were binding on both sides and could be amended only if both sides agree.

The Second Circuit’s decision will surely impact future TCPA cases regarding revocable consent where the parties have entered bilateral contracts. It bears watching how other Circuits rule on this matter, and there is a D.C. Circuit appeal of the FCC’s 2015 Declaratory Ruling on this issue that should provide more clarity as well. For now, it is clear that companies should avail themselves of the potential protection and include broad consent language in all of their bilateral agreements.

Revocation of Consent Under the TCPA