Yesterday the Second Circuit Court of Appeals issued a groundbreaking opinion in a Telephone Consumer Protection Act (TCPA) case regarding revocation of consent. The case is Reyes, Jr. v. Lincoln Automotive Financial Services, (Case No 16-2104, Second Circuit Court of Appeals).

A copy of the court’s opinion can be found here. 

insideARM originally wrote about this case on July 5, 2016. In that article, we commented that that the issue of “revocation of consent” was going to be a major battleground in TCPA cases. This decision from the Second Circuit is going to be a boost to defense of TCPA cases going forward.


On June 29, 2012, Plaintiff, Alberto Reyes, Jr. (Reyes), leased a new 2012 Lincoln MKZ luxury sedan from a Ford Dealership, through Defendant Ford Motor Credit Company LLC (Ford Credit) Note: Lincoln Automotive Financial Services” is a registered trade name of Ford Motor Credit Company LLC, and not an independent company. Ford Credit was named in the complaint as Lincoln Automotive Financial Services (Lincoln). In connection with this transaction, Plaintiff executed a written New York Lease Contract dated June 29, 2012.

As part of the Lease Contract, Plaintiff expressly consented to receive telephone calls from Ford Credit, “including but not limited to, contact by manual calling methods, prerecorded or artificial voice messages, text messages, emails, and/or automatic telephone dialing systems.”  Plaintiff further consented to Ford Credit using “any telephone number” provided by Plaintiff in order to contact him, “including a number for a cellular phone or other wireless device, regardless of whether [Plaintiff] incurs charges as a result.”

Plaintiff failed to make several payments under the Lease Contract when due, thereby defaulting on his obligation. Ford Credit then began telephoning Plaintiff at the phone number provided by Plaintiff in the Lease Contract. Plaintiff failed to cure his default and Ford Credit repossessed the vehicle.

Reyes claimed that on June 14, 2013, he mailed a letter to Lincoln in which he wrote: “I would also like to request in writing that no telephone contact be made by your office to my cell phone.” Lincoln contends that it never received Reyes’s letter, or any other request to cease its calls. At his deposition, Reyes testified to mailing the letter to the P.O. box listed on Lincoln’s invoices and produced a copy of the letter that did not bear an address or postmark and referenced an incorrect account number. 

Despite his alleged revocation of consent, Lincoln continued to call Reyes. Following the close of discovery, Lincoln’s attorney confirmed that Lincoln had called him 141 times with a customer representative on the line, and had called him with prerecorded messages an additional 389 times.

Plaintiff filed this lawsuit on February 6, 2015, alleging violations of both the TCPA and the Fair Debt Collection Practices Act (FDCPA). Plaintiff requested damages in the amount of $720,000. After Discovery, Ford Credit filed a motion for Summary Judgment.

[Editor’s note: A motion for summary judgment is based upon a claim by one party (or, in some cases, both parties) that contends that all necessary factual issues are settled or so one-sided they need not be tried. The summary judgment is appropriate when the court determines there no factual issues remaining to be tried, and therefore a cause of action or all causes of action in a complaint can be decided upon certain facts without trial.]

The district court granted the defendant’s motion for summary judgment on the basis that (1) the evidence of consent revocation was insufficient, and (2) in any event the TCPA does not permit revocation when consent is provided as consideration in a binding contract. 

The plaintiff appealed that order. Two issues were raised by Reyes in the appeal: 

  1. That he introduced sufficient evidence to create a triable issue of fact as to whether he placed Lincoln on notice of his revocation of consent; and 
  2. That the TCPA, construed in light of its broad remedial purpose to protect consumers from unwanted phone calls, does permit a party to revoke consent to be called, even if that consent was given as part of a contractual agreement.

This opinion is the result of that appeal. 

The Appellate Court Decision 

The Second Circuit affirmed the district court judgment in favor of the defendant. The court held that (1) Reyes did introduce sufficient evidence from which a jury could conclude that he revoked his consent, but that (2) the TCPA does not permit a consumer to revoke its consent to be called when that consent forms part of a bargained‐for exchange. (Emphasis added by insideARM

The court began its analysis with a review of the documentation: 

“In his lease application, Reyes provided several personal details, including his cellular phone number. The lease itself contained a number of provisions to which Reyes assented when finalizing the agreement. One provision permitted Lincoln to contact Reyes, and read as follows: 

You [Reyes] also expressly consent and agree to Lessor [Ford], Finance Company, 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 1 future, including a number for a cellular phone or other wireless device, regardless of whether you incur charges as a result. 

As noted above, the court agreed with Reyes on the first issue. The court found that he did introduce sufficient evidence to create a triable issue of fact as to whether he had placed Lincoln on notice that he had revoked his consent. The court wrote: 

“We agree with Reyes that the district court’s finding that he did not revoke his consent to be contacted by telephone was improper on summary judgment. This material issue of fact was in dispute and raised a jury question. The district court’s conclusion that Reyes did not revoke his consent rested on an impermissible assessment by the court of Reyes’s credibility. The district judge erred in concluding 1 that no reasonable jury could find that Reyes revoked his consent, when Reyes introduced sworn testimony to the contrary. Whether that testimony was reliable was a question of fact for the jury.” 

The court then turned to the issue of whether Reyes was able to revoke his consent under the facts presented. The court noted that “two of our sister circuit courts have ruled that a party can revoke prior consent under the terms of the act.” (Citing cases from the Third and Eleventh Circuits.)  The court also noted that the Federal Communications Commission (FCC), in their 2015 Rulemaking, had relied on those two cases to rule that that “prior express consent” is revocable under the TCPA. 

However, the court distinguished those cases and the 2015 FCC Rule from this case. The court wrote: 

“Reyes’s appeal presents a different question, which has not been addressed by the FCC or, to our knowledge, by any federal circuit court of appeal: whether the TCPA also permits a consumer to unilaterally revoke his or her consent to be contacted by telephone when that consent is given, not gratuitously, but as bargained‐for consideration in a bilateral contract. 

Reyes contends that the same principles that the FCC and the Third and Eleventh Circuits relied on in their previous rulings apply to this situation as well. He argues that (1) under the common law definition of the term, which Congress is presumed to have adopted when it drafted the TCPA, any form of “consent” (whether contractual or not) is revocable by the consenting party at any time; and (2) permitting parties to revoke their consent to be called is consistent with the remedial purpose of the TCPA, which was designed by Congress to afford consumers broad protection from harassing phone calls. 

We agree with the district court that the TCPA does not permit a party who agrees to be contacted as part of a bargained‐for exchange to unilaterally revoke that consent, and we decline to read such a provision into the act.

 (Emphasis added by insideARM

Reyes also argues that his consent to be contacted is revocable because that consent was not an “essential term” of his lease agreement with Lincoln. This argument is meritless. In contract law “essential terms” are those terms that are necessary in order to lend an agreement sufficient detail to be enforceable by a court. Brookhaven Hous. Coal. v. Solomon, 583 F.2d 584, 593 (2d Cir. 1978) (“If essential terms of an agreement are omitted or are phrased in too indefinite a manner, no legally enforceable contract will result.”). For example, a contract for the sale of goods must contain terms such as the quantity of goods to be sold and the price at which they will be purchased. But a contractual term does not need to be “essential” in order to be enforced as part of a binding agreement. It is a fundamental rule of contracts that parties may bind themselves to any terms, so long as the basic conditions of contract formation (e.g., consideration and mutual assent) are met.” 

insideARM Perspective

This case is a very big “win” for defense of TCPA claims where consent has been provided in a contract.  The court’s labeling the Reyes argument on whether the consent was an “essential term” to the agreement will be referenced over and over in the coming weeks and months.  

However, before everyone gets too excited about this, note the very clear language in the lease agreement. Not every consumer contract is written in this manner. The consent terms are clearly part of the lease agreement. Would the result have been the same if this were a credit card account and these terms were sent out later as part of an update to an account terms and conditions?

insideARM contacted frequent contributor, attorney John Rossman from the Minneapolis law firm of Moss & Barnett, for his thoughts on this decision. Rossman commented:

"The decision in Reyes is a game-changer for companies defending against the seemingly endless onslaught of "no actual damages" TCPA cases.  Further, this case is yet another recent example of a Court injecting a much-needed common sense element into the assessment of the often ethereal claims asserted under consumer protection laws.  The Court recognized that it makes no sense to allow a consumer, after receiving the benefit of a contract, to pick and choose contractual elements that he or she later decides are unfavorable.  Our office intends to cite this case in motions to dismiss both under the TCPA and under certain State protection laws in a number of cases pending across the country." 

Another frequent insideARM contributor, Rozanne Andersen, Vice President and Chief Compliance Officer at Ontario Systems, also commented:

 “This Court’s ruling creates a tremendous opportunity for creditors and their first and third party collection agencies. By updating their contracts with consumers to include mutually bargained for consent, calls placed to consumer’s cells using an ATDS or a prerecorded message will be subject to legally binding contract provisions - to wit the consumer cannot back out of without penalty. To date our industry has waffled between the need to include TCPA style written consent in the underlying creditor contract and relying on the FCC’s ruling that so long as the consumer voluntarily provides their cell number to the creditor consent is obtained. The latter is not protected by contract while the former will at least give the creditor and its first and third party debt collector their day in court.”


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