On October 20, 2017, the Second Circuit Court of Appeals denied a petition for rehearing of its decision in Reyes Jr. v. Lincoln Automotive Financial Services, (case no. 16-2104, Second Circuit Court of Appeals.) This is affirmation of the Court's ruling that the Telephone Consumer Protection Act (TCPA) does not permit a party to unilaterally revoke consent to receive telephone calls, if consent was part of a bilateral contractual provision.
insideARM previously wrote an article regarding the underlying appeal. You can find the article here.
In the appeal, plaintiff Alberto Reyes, Jr. (Reyes) argued that defendant Lincoln Automotive Financial Services (Lincoln) violated the TCPA by continuing to call him after he revoked his consent to receive said calls. Reyes' initial consent to receive calls arose from a provision in a lease agreement he signed with Lincoln. This provision stated that Reyes agreed to receive communication “including but not limited to, contact by manual calling methods, prerecorded or artificial voice messages, text messages, emails and/or automatic telephone dialing systems.” Reyes argued that by sending Lincoln a letter requesting that no contact be made to his cellular phone, he revoked this consent and thus Lincoln violated the TCPA by continuing to call him.
The Second Circuit acknowledged that though consent can often be revoked (as other circuit courts and the FCC previously determined), consent to another party’s actions that is part of a contract and legally binding, can become irrevocable. Thus, one party cannot alter the terms of the contract without the consent of the other party. The Second Circuit held that the TCPA did not permit Reyes to unilaterally revoke the consent he provided when he signed the lease agreement with Lincoln.
Following this decision, Reyes filed a petition for a rehearing. The Court denied his petition, affirming its decision that the TCPA does not allow one party to revoke consent to receive calls when it was given as part of a binding, bilateral agreement.
As described in our previous article on this case, the Second Circuit’s decision, including declining to rehear the case, is an important win for the industry.
Since the explosion of TCPA litigation in the mid-2000s, there has been a dramatic change by lenders, telecom and utility providers, and other vendors to include consent terms in consumer contracts providing express permission to contact the consumer by autodialer, prerecorded messaged, text message, and e-mail. In addition to helping prove express consumer consent, such clauses can now also be used to defend against claims the consumer revoked consent unilaterally.
It remains to be seen whether the Reyes decision will be adopted by other courts, but there is no question that creditors, providers, and others should carefully examine the decision and review their consumer contracts accordingly.