Consumer Finance Litigation

A .pdf copy of the Medley opinion can be found here.

While the Federal Communications Commission (“FCC”) has been clear that the Telephone Consumer Protection Act (“TCPA”) allows a consumer to revoke consent through “any reasonable means,” federal courts have been grappling with the interplay of consent that was provided in a bargained-for contract and subsequent attempts to revoke that consent.  Back in 2017, the Second Circuit issued a landmark decision in Reyes v. Lincoln Auto. Fin. Svcs., 861 F.3d 51, 56 (2d Cir. 2017), 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.”  Since the decision in Reyes, district courts have struggled with finding a uniform approach to this issue.

In Ammons v. Ally Financial, Inc., 326 F. Supp. 3d 578, 595 (M.D. Tenn. June 27, 2018), the U.S. District Court for the Middle District of Tennessee rejected the holding in Reyes, finding that the “consent” referenced in the TCPA is akin to common law consent.  As a result, the Ammons court reasoned, revocation must be permitted in any context because the right to revoke consent was “consistent with the common law.”  Id. at 595.

Several other courts have sided with the Second Circuit, though with some caveats.  For example, in Barton v. Credit One Fin., No. 16-CV-2652, 2018 WL 2012876 (N.D. Ohio Apr. 30, 2018), the U.S. District Court for the Northern District of Ohio followed the reasoning in Reyes.  However, the Court focused on language in the parties’ contract that specifically limited the means of revocation:

COMMUNICATION REVOCATION: If you do not want to receive communication as described [herein], you must (i) provide us with written notice revoking your prior consent, (ii) in that written notice, you must include your name, mailing address, and the last four digits of your Account number . . . (iv) if you are requesting communications to cease via telephone(s) and/or email, please provide the specific phone number(s) and email address.

Reviewing this provision, the court held: “[t]he revocation clause within the Cardholder Agreement is valid and enforceable, and Mr. Barton cannot unilaterally alter the terms of the agreement to claim that his oral revocation of consent was valid.”  Id. at *4.

Thus, courts have fallen into three camps:

Until last week, no other federal circuit court had directly addressed the issue.

On Friday, May 1st, the Eleventh Circuit issued its decision in Linda Medley v. Dish Network, LLC, No. 18-13841, 2020 WL 2092594 (11th Cir. May 1, 2020) and firmly jumped into the first camp.  The appellant, Linda Medley (“Medley”), had entered into a 24-month contract to receive television service from Dish Network (“Dish”).  Id. at *1.  As part of her contract, Medley provided her cellular telephone number and expressly authorized Dish to contact her regarding her account, or any past due balance.  Id.  After she fell behind, Medley hired attorneys to help her file for bankruptcy.  Id.  Those attorneys sent a fax to Dish, informing the company that it could no longer contact Medley directly and could not make telephone calls.  Id. at *2.  Following its receipt of the fax, Dish made six (6) calls directly to Medley’s cell phone.  Id.

The Eleventh Circuit noted that there was no dispute that Medley had (1) expressly consented to be contacted on her cell phone in her original agreement and (2) that she unilaterally attempted to revoke that consent.  Id. at *5.  Thus, the court stated, “[t]he question is whether the TCPA allows unilateral revocation of consent given in a bargained-for contract.”  Id.  Ultimately, the court sided with Reyes, answering the question in the negative.  Id.

Citing its own precedent, the court stated that “an ‘agreement is a manifestation of mutual assent on the part of two or more persons,’ [and thus] it is black-letter contract law that one party to an agreement cannot, without the other party’s consent, unilaterally modify the agreement once it has been executed.”  Id. at *5 (citing Kuhne v. Fla. Dep’t of Corrs., 745 F.3d 1091, 1096 (11th Cir. 2014) (quoting Restatement (Second) of Contracts § 3 (Am. Law Inst. 1981.  The court continued, noting “this rule originates from the foundational ‘requirement that every provision of a contract—including any proposed modification—receive the ‘mutual assent’ of every contractual party in order to have legal effect.’” Id. (quoting Reyes, 861 F.3d at 57 (citation omitted)).

Medley argued that prohibiting revocation would be at odds with the FCC’s 2015 Ruling, In the Matter of Rules & Regulations Implementing the Tel. Consumer Prot. Act of 1991, 30 F.C.C. Rcd. 7961, 7994-7999 (2015) (hereinafter, “2015 Ruling”), and with the consumer-protection purposes of the TCPA.  The court, however, dismissed such concerns, stating that contractual consent was not directly discussed in the FCC’s 2015 Ruling and that the TCPA “is silent ‘regarding the means of providing or revoking consent.’”  Id. at 6 (citing Osorio v. State Farm Bank, F.S.B., 746 F.3d 1242, 1255 (11th Cir. 2014).  The court concluded, stating:

We, like the Second Circuit, are . . . unpersuaded by the argument that unilateral revocation of consent given in a legally binding agreement is permissible because it comports with the consumer-protection purposes of the TCPA. “It was well-established at the time that Congress drafted the TCPA that consent becomes irrevocable when it is integrated into a binding contract, and we find no indication in the statute’s text that Congress intended to deviate from this common-law principle in its use of the word ‘consent.’” Reyes, 861 F.3d at 58 (citing Neder v. United States, 527 U.S. 1, 21, 119 S.Ct. 1827, 144 L.Ed.2d 35 (1999)). Permitting Medley to unilaterally revoke a mutually-agreed-upon term in a contract would run counter to black-letter contract law in effect at the time Congress enacted the TCPA. “Absent express statutory language to the contrary, we cannot conclude that Congress intended to alter the common law of contracts in this way.” Reyes, 861 F.3d at 59 (citing Neder, 527 U.S. at 21–23, 119 S.Ct. 1827).

Thus, the Eleventh Circuit in Medley as well as the U.S. District Court for the Middle District of Tennessee in Ammons both cite to “common-law principles” to support their diametrically opposed interpretations of revocation under the TCPA.  However, with the Eleventh Circuit now joining the Second Circuit as the only federal circuits to have addressed the issue, it is clear that momentum clearly favors the position that unilateral revocation of contractual consent is not permitted.  We will continue to monitor developments on this very important issue and will update the blog if any other circuit court weighs in.

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