The spate of class actions under the Telephone Consumer Protection Act (TCPA) isn’t ending anytime soon. And the risks to businesses have just increased in the Third Circuit, thanks to that court’s recent ruling that the TCPA permits consumers to retract consent to receiving calls on their cell phones placed by automatic telephone dialing systems.
The TCPA prohibits making any call to a cell phone “using any automatic telephone dialing system or an artificial or prerecorded voice” unless (among various exceptions) the call is made with the “prior express consent of the called party.” 47 U.S.C. § 227(b)(1)(A)(iii). Courts have upheld various ways of demonstrating “express consent,” including:
- verbally, such as when the consumer orally provides a cell phone number as a contact number (Greene v. DirecTV, Inc., 2010 WL 4628734 (N.D. Ill. Nov. 8, 2010));
- in writing, such as when a contract authorizes cell phone calls (Moore v. Firstsource Advantage, LLC, 2011 WL 4345703 (W.D.N.Y. Sept. 15, 2011)); and
- through a third party, such as when a spouse authorizes cell phone calls (Gutierrez v. Barclays Bank Group, 2011 WL 579238 (S.D. Cal. Feb. 9, 2011)).
But once consumers have consented to receiving these calls, can they rescind their consent? The TCPA’s text is silent on the subject. And although the FCC’s 1992 TCPA Order indicates that consumers who provide their cell phone number can give “instructions” that they don’t agree to receive autodialer calls, the order doesn’t address whether the consumer can give those instructions long after initially providing the cell phone contact number.
By contrast, other privacy statutes—such as the CAN-SPAM Act, the Junk Fax Protection Act, and the Fair Debt Collection Practices Act—have express provisions allowing consumers to opt out of receiving communications at any time. A number of district courts have concluded that the lack of a corresponding express provision in the TCPA means that consumers don’t have the statutory right to retract consent once it has been given. See, e.g., Osorio v. State Farm Bank, F.S.B., 2012 WL 1671780 (S.D. Fla. May 10, 2012); Cunningham v. Credit Mgmt., L.P. (pdf), 2010 WL 3791104 (N.D. Tex. Aug. 30, 2010); Starkey v. Firstsource Advantage, L.L.C. (pdf), 2010 WL 2541756 (W.D.N.Y. Mar. 11, 2010).
But in Gager v. Dell Financial Services, Inc. (pdf), the Third Circuit sided with courts that have taken the opposite view. See Adamcik v. Credit Control Servs., Inc., 832 F. Supp. 2d 744 (W.D. Tex. 2011); Gutierrez, supra.
The Third Circuit gave three reasons for its holding. In my view, each one is questionable.
The court first noted that, at common law, consent can be revoked at any time. But the court’s limited discussion of common-law notions of consent was confined to the tort context. By contrast, in contract, consent often cannot be freely rescinded. When a party extends an offer that has been accepted or relied upon by another, the offering party is generally bound—there are no “backsies.” The court should not have assumed so readily that Congress would have chosen the “tort” view of consent over contractual norms when enacting the TCPA—especially because consent is in fact frequently provided by contract.
The court next concluded that because the TCPA is a “remedial statute,” any “silence in the TCPA” should be construed in favor of consumers. But the court’s premise—that the sole purpose of the TCPA is to “protect consumers”—is shaky. Congress had multiple reasons for enacting the various provisions of the TCPA; some provisions were intended to shield consumers from unwelcome intrusions, but others were designed to provide safe harbors for certain industries and for certain business activities. Thus, for example, the “express prior consent” exception to liability under the TCPA could be read as a protection for businesses rather than consumers. If so, on the Third Circuit’s reasoning, ambiguities—at least those relating to consent—should be construed in favor of businesses. Otherwise, holding that unclear statutory language should be construed to bar commonly accepted practices could unfairly subject businesses to enormous liability ex post facto. The law frowns upon retroactively displacing settled expectations.
The Third Circuit’s third and final reason for construing the TCPA to allow consumers to retract consent is equally dubious. The court pointed to a recent FCC ruling that a business doesn’t violate the TCPA by sending a text message confirming a consumer’s opt-out request. This ruling, the court explained, suggests that the FCC would rule that consumers have a right under the TCPA to retract consent, as the FCC made statements in passing to that effect. But as the court acknowledged, the FCC’s ruling was primarily about a different issue, and the FCC certainly articulated no rationale that would support the conclusion that the Third Circuit reached. For this reason, the Third Circuit conceded that the FCC’s ruling could not be accorded Chevron deference.
For the reasons I have explained , businesses have lots of ammunition for arguing for a different result when litigating this issue in other circuits. And even in the Third Circuit, businesses faced with TCPA plaintiffs who claim to have “revoked” their consent to receiving cell phone calls or text messages still have arguments against liability. For example, if the consent to receiving such calls is part of a contract, state-law rules about barring unilateral modifications of contracts may be applicable. And if the case is a class action, whether the consumer effectively revoked consent often will be the type of individualized issue that can preclude certifying a class under Rule 23(b)(3).