July 6, 2017

tcpa-consentOn June 22, 2017, the United States Court of Appeals for the Second Circuit ruled that consent provided by consumers to businesses within the meaning of the Telephone Consumer Protection Act (“TCPA”) cannot be revoked if such consent was “part of a bargained-for exchange” in a written contract.  Specifically, the Court asked, “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.”  The Court answered that question by holding 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.”

Why did the Court Rule that TCPA Contractual Consent May Not Be Revoked?

The underlying facts of the litigation are straightforward.  In 2012, the plaintiff entered into a written automobile leasing agreement, but soon thereafter stopped making payments.  The defendant automobile company called the plaintiff on multiple occasions in an attempt to cure the plaintiff’s default.  The plaintiff mailed a letter to the automobile company, disputing the debt and revoking his prior express written consent to be called by the automobile company via automated means.  The automobile company claimed that it never received the letter, and continued to call the plaintiff.

In arriving at its decision, the Court began its analysis by distinguishing between the legal definition of consent in the tort context and that of consent in the contractual context.  Under tort law, “consent” is generally defined as a gratuitous action, or voluntarily yielding to the desires of another.  In contrast, consent in the contractual context requires mutual assent by the parties as part of a bargained-for exchange.  The Court stated that “[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 . . . .  Yet, reading the TCPA’s definition of ‘consent’ to permit unilateral revocation at any time . . . would permit [the plaintiff] to do just that.”  With those principles in mind, the Court assessed the facts of the case and determined that consent “was not provided gratuitously; it was included as an express provision of a contract to lease an automobile.”  The Court concluded that consent to another’s actions can “become irrevocable” when it is expressly given in a written contract, regardless of whether the term is “material” under the law.  In the Second Circuit decision, the Court held that the plaintiff’s consent to be called by the automobile company via automated means was irrevocable and, therefore, the automobile company did not violate the TCPA.

TCPA Consent?  Protect Yourself: Consult with a TCPA Attorney Today

In a previous blog, we discussed the very first appellate court decision to hold that TCPA consent may be revoked.  Here, the Second Circuit distinguished the holding in that case, noting that it did not involve consent “given in exchange for any consideration, and which is not incorporated into a binding legal agreement.”  How much deference other circuits afford to this decision and whether it is somewhat limited to its facts remains to be seen.  Notwithstanding the foregoing, given the Second Circuit’s ruling, we recommend that businesses include provisions in all written agreements whereby consumers provide prior express written consent to be contacted on their cellular telephones via automated means.  In obtaining such consent, businesses will have an additional defense at their disposal in the event that litigation involves opt-out issues.

If you are interested in learning more about this topic, please visit the Telemarketing Law practice area of our website.  If you have been served with process concerning your telemarketing practices, please e-mail us at info@kleinmoynihan.com or call us at (212) 246-0900.

The material contained herein is provided for informational purposes only and is not legal advice, nor is it a substitute for obtaining legal advice from an attorney.  Each situation is unique, and you should not act or rely on any information contained herein without seeking the advice of an experienced attorney.

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