In a watershed ruling for businesses facing the recent onslaught of Telephone Consumer Protection Act (TCPA) claims, the Second Circuit Court of Appeals held that consumers cannot revoke their consent to receive automated or prerecorded cell phone calls if they previously consented to receive those calls as part of a binding contract. See Reyes v. Lincoln Automotive Fin. Servs., No. 16-2104-cv, slip op. (2d Cir. June 22, 2017).

In Reyes, the plaintiff entered into a binding auto lease agreement, which contained a provision stating that he expressly consented to be contacted using “prerecorded or artificial voice messages, text messages, emails and/or automatic telephone dialing systems” at the cell phone number he had provided on his application. When the plaintiff defaulted on his car lease and he started receiving collection calls on his cell phone, he allegedly mailed a letter revoking his consent to receive further calls, but they continued.

The New York federal district court granted summary judgment to the defendant in part on the basis that “the TCPA does not permit a party to a legally binding contract to unilaterally revoke bargained-for consent to be contacted by telephone.” On appeal, the Second Circuit affirmed the district court’s decision, 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, and we decline to read such a provision into the act.”

In reaching this ruling, the Second Circuit reasoned that the “text of the TCPA evidences no intent to deviate from common law rules in defining ‘consent.’” The court distinguished between (i) “gratuitous actions” under the tort law, such as voluntarily providing one’s cell phone number on a loan application without exchanging any consideration, versus (ii) providing consent “as an express provision of a contract to lease an automobile.” In the former case, where the consent was purely voluntary, revocation is allowed at any time. But in the latter case, where consent is provided as a term of a binding agreement, that consent “become[s] irrevocable” because “one party may not alter a bilateral contract by revoking a term without the consent of the counterparty.” Given Congress’ silence about revocation in the TCPA, the Second Circuit was not willing to conclude that “Congress intended to alter the common law of contracts.” The Second Circuit further rejected the plaintiff’s argument that any ambiguities should be construed in the consumers’ favor because the statute contained no ambiguity on the revocation point.

Take-away: Businesses face thousands of TCPA lawsuits each year based on alleged revocations of prior express consent. This Second Circuit decision creates a powerful defense to these claims as long as the defendant can show that the plaintiff’s prior express consent to receive automated or prerecorded calls was given as part of a binding contractual agreement. If so, the plaintiff cannot unilaterally revoke that consent as a matter of law. While this decision only is binding in the Second Circuit, it can and should be used by defendants as persuasive precedent across the entire country.