telemarketing lawsCan a seller contractually prohibit a customer from revoking his or her consent to receive autodialed and/or pre-recorded message calls under the Telephone Consumer Protection Act (TCPA)? According to the U.S. Court of Appeals for the Second Circuit, the answer is “yes.” On June 22, 2017, in Reyes v. Lincoln Automotive Financial Services, No. 16-2104 (2d Cir. June 22, 2017), a first-of-its-kind decision, a three-judge panel of the U.S. Court of Appeals for the Second Circuit unanimously affirmed a district court’s award of summary judgment to defendant Lincoln Automotive Financial Services on the plaintiff’s TCPA claim, which alleged that Lincoln violated the Act by placing autodialed and pre-recorded message calls to the plaintiff’s cell phone without appropriate consent.

The underlying facts were relatively straightforward: in 2012, the plaintiff leased a new car; Lincoln financed the lease. The lease contained a provision, to which the plaintiff assented, stating:

You [plaintiff] also expressly consent and agree [that Lincoln] 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 . . . and/or automatic telephone dialing systems. You agree that [Lincoln] may use . . . 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.

In the lease, the plaintiff provided his cell phone number. The plaintiff subsequently stopped making the required loan payments and, as a result, Lincoln called him 141 times with a live representative and an additional 389 times using a pre-recorded message. The plaintiff claimed (and later provided deposition testimony and a sworn declaration) that, in June 2013, he mailed a letter to Lincoln stating that he no longer wished to be contacted on his cell phone. Lincoln argued that it never received that letter. The Second Circuit found the issue to be in dispute but irrelevant to its decision.

Rather, the court held that, under the TCPA, a party is not permitted to revoke consent where consent to be contacted is a term of a contract. In reaching its conclusion, the court noted that the Third and Eleventh Circuits, and the Federal Communications Commission in its July 2015 Omnibus TCPA Order have ruled that a consumer generally may revoke consent once given under the Act and did not disagree with those decisions. However, the Lincoln Automotive appeal presented an entirely different question: “whether the TCPA also permits a consumer to unilaterally revoke his or her consent to be contacted by telephone when the consent is given, not gratuitously, but as bargained-for consideration in a bilateral contract.” The Second Circuit found that there is a distinction between tort and contract law with respect to the issue of consent.

Consent, in the context of tort law, is a voluntary act – i.e., not given in exchange for consideration and incorporated into a binding legal agreement – and, as such, may be revoked by the consenting party at any time. In contrast, where consent is not provided gratuitously but, instead, as an express provision of a contract, “‘consent,’ as that term is used in the TCPA, is not revocable.” In that regard, relying on fundamental contract principles, the court found that the plaintiff could not unilaterally alter the terms of the express contract between the parties and, thus, could not revoke his consent.

The TCPA requires prior express written consent in order to place autodialed and/or pre-recorded message telemarketing calls to cell phones and, as part of obtaining such consent, a telemarketer must advise the consumer that his or her consent is not required as a condition of purchasing the telemarketer’s products or services. Thus, Lincoln Automotive appears to be limited to collection and other non-telemarketing types of calls. However, the decision underscores the importance that strong contractual verbiage designed to capture consumer consent can play in shielding a company from TCPA liability.