Robocall Consent Irrevocable if Part of Binding Contract

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By Jimmy H. Koo

Consumers can’t unilaterally revoke their consent to receive commercial phone calls if that consent is part of a bargained-for exchange in a contract, the U.S. Court of Appeals for the Second Circuit affirmed June 22 ( Reyes v. Lincoln Auto. Fin. Servs. , 2017 BL 214099, 2d Cir., No. 16-2104-cv, 6/22/17 ).

“A party who has agreed to a particular term in a valid contract cannot later renege on that term or unilaterally declare it to no longer apply simply because the contract could have been formed without it,” Judge John M. Walker said in the Telephone Consumer Protection Act ruling.

The TCPA allows consumers to sue companies that make phone calls using an automatic dialing system without prior consent. Whether a plaintiff gave consent to receive calls is the central issue in many TCPA cases.

The plaintiff in this case leased a car through Ford Motor Co.'s Lincoln Automotive Financial Services. The lease application signed by the plaintiff contained a provision allowing Lincoln to make contact calls. When the plaintiff stopped making his payments, Lincoln called him to collect the money he owed. Although the plaintiff allegedly requested that Lincoln stop calling him, Lincoln continued to call.

Plaintiff Alberto Reyes sued Lincoln, alleging violations of the TCPA. In June 2016, the trial court held that the TCPA prohibits a party to a legally binding contract from unilaterally revoking the bargained-for consent to be contacted by telephone. Reyes appealed.

Consent Clauses

The appeals court found that the plaintiff’s consent to be called was part of a contract to lease an automobile from Lincoln, and that “‘consent,’ as that term is used in the TCPA, is not revocable.”

The appeals court said that it is “sensitive to the argument that businesses may undermine the effectiveness of the TCPA by inserting ‘consent’ clauses of the type signed by Reyes into standard sales contracts, thereby making revocation impossible in many instances.” However, it said that such a hypothetical concern, “is grounded in public policy considerations rather than legal ones.”

The Second Circuit panel concluded that it can’t substitute its “policy preferences for those of the legislature by reading a right to revoke contractual consent into the TCPA where Congress has provided none.”

Judges Dennis G. Jacobs and Barrington D. Parker joined the opinion.

Marcus & Zelman LLC represented the plaintiff. Hogan Lovells US LLP represented Lincoln.

To contact the reporter on this story: Jimmy H. Koo in Washington at jkoo@bna.com

To contact the editor responsible for this story: Donald Aplin at daplin@bna.com

For More Information

Full text of the court's opinion is available at http://src.bna.com/p96.

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