The U.S. Court of Appeals for the Third Circuit recently ruled that the federal Telephone Consumer Protection Act of 1991 ("TCPA"), 47 U.S.C. § 227(b)(1)(A)(iii), allows a consumer to revoke prior express consent, and that there is no temporal time limitation on that right.
In so ruling, the Court reversed and remanded the district court's dismissal in favor of the creditor, because while the TCPA is silent as to revocation of consent, the Third Circuit held that: (1) Congress did not intend to depart from the common law meaning of consent, which allows for withdrawal of consent; (2) the TCPA is remedial in nature, and its silence regarding revocation should be construed to benefit consumers; and (3) the FCC's ruling in Soundbite, which concluded consumers may revoke their prior express consent to be contacted by autodialer systems, supported such a finding.
A copy of the opinion is available at: http://www2.ca3.uscourts.gov/opinarch/122823p.pdf.
Around December 2007, the plaintiff applied for a line of credit from the creditor to purchase computer equipment. The credit application required that she provide her home phone number, but the consumer listed her cellular phone number. In doing so, however, the consumer neither stated that the number was for a cellular phone, nor did she indicate that the creditor should not use an automated telephone dialing system to call her at the provided number.
The creditor granted the consumer a line of credit, which she used to purchase computer equipment. The consumer subsequently defaulted on her debt. The creditor then began using an automated telephone dialing system to call the consumer's cellular phone, leaving pre-recorded messages on her voicemail concerning the debt.
In December 2010, the consumer sent a letter to the creditor, listing her phone number and asking the creditor to stop calling. The letter did not indicate that the number was for a cellular phone. The consumer alleged that, after receiving her letter, the creditor called her cellular phone approximately forty times over the three week period, using an automated telephone dialing system.
The consumer filed a complaint, asserting violations of 47 U.S.C. § 227(b)(1)(A)(iii), the TCPA's provision banning certain automated calls to cellular phones. The consumer alleged that, after receiving her letter, the creditor had a duty under the TCPA to stop all autodialed calls to her cellular phone because she had withdrawn her prior express consent to be contacted at that number via an automated dialing system. The case was subsequently removed under 28 U.S.C. § 1441.
The creditor moved to dismiss the complaint for failure to state a claim. The District Court granted the motion, holding that the consumer could not revoke her prior express consent for three reasons. First, the lower court concluded that the lack of language in the TCPA providing for "post-formation revocation of consent" weighed in favor of finding that no such right exists. Gager v. Dell Fin. Servs., LLC, No. 11-cv-2115, 2012 WL 1942079, at *6 (M.D. Pa. May 29, 2012). Second, the District Court held that, although the consumer was entitled to give "instructions to the contrary" as to whether the creditor could use an automated telephone dialing system to call her, those instructions had to be "provided at the time [she] . . . knowingly release[d] her telephone number" to the creditor. Id. Finally, the District Court determined that, because calls regarding debt collection are not subject to the TCPA and because the creditor's calls were for debt collection purposes, the consumer failed to allege a violation of the TCPA. Id.
The consumer then appealed. On appeal, the Third Circuit was presented with two issues: (1) whether the TCPA allows a consumer to revoke "prior express consent" to be contacted via an automated telephone dialing system on a cellular phone; and (2) if a revocation right exists, whether there is a temporal limitation on that right.
As you may recall, the relevant portion of the TCPA provides that it is unlawful for any person:
"to make any call (other than a call made for emergency purposes or made with the prior express consent of the called party) using any automatic telephone dialing system or an artificial or prerecorded voice . . . to any telephone number assigned to a paging service, cellular telephone service, specialized mobile radio service, or other radio common carrier service, or any service for which the called party is charged for the call." 47 U.S.C. § 227(b)(1)(A)(iii).
Importantly, the statute does not contain any language expressly granting consumers the right to revoke their prior express consent.
The Third Circuit noted that the most significant guidance from the FCC on the issue of revocation of prior express consent comes from a decision issued after the District Court dismissed the consumer's claim. See In the Matter of Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991, SoundBite Communications, Inc., 27 FCC Rcd. 15391 (Nov. 26, 2012) (hereinafter "SoundBite").
In SoundBite, the FCC issued a declaratory ruling to resolve the issue of whether "a consumer's prior express consent to receive text messages from an entity can be construed to include consent to receive a final, one-time text message confirming that such consent has been revoked." Id. at 15395 ¶ 9. The FCC concluded that a text message confirming an opt-out request is permissible under the TCPA. Id. at 15394 ¶ 7, 15398 ¶ 15.
The creditor argued that the TCPA's silence as to whether a consumer may revoke her prior express consent to be contacted via an autodialing system supports the conclusion that the right does not exist. Because Congress has passed several other remedial consumer protection statutes providing the consumer with a right to stop unwanted communications, the creditor argued it would have done so in the TCPA if it intended.
In examining the issue, the Third Circuit disagreed with the creditor's position for three reasons.
First, the Third Circuit held that Congress did not intend to stray from the common law meaning of consent because it did not treat the term differently from its common usage. Consent is both voluntary, and at common law, it may be withdrawn. Restatement (Second) of Torts § 892A, cmt. i (1979).
Second, the Third Circuit held that because the TCPA is a remedial statute, which was passed to protect consumers from unwanted telephone calls, it is to be construed to benefit consumers. See Lesher v. Law Offices of Mitchell N. Kay, PC, 650 F.3d 993, 997 (3d Cir. 2011). Therefore, the Court concluded that the TCPA's silence concerning revocation of prior express consent "should not be seen as limiting a Consumer's right to revoke prior express consent. Instead, [it] view[ed] the silence in the statute as evidence that the right to revoke exists."
Third, the Third Circuit held that the FCC's SoundBite ruling only provided further evidence that it reached the correct decision. According to the Third Circuit, SoundBite's conclusion was clear in providing that consumers may revoke prior express consent to be contacted by autodialing systems. Further, the Court noted that SoundBite is consistent with the TCPA's purpose. As such, the Third Circuit found that SoundBite provided further support for its holding that a consumer may revoke prior express consent.
The creditor further argued that even if the TCPA allowed for prior express consent, the consumer had to deliver "instructions to the contrary" at the time she filled out her credit application, or, in other words, there is a temporal limit on when a consumer may revoke prior written consent.
The Third Circuit disagreed with the creditor's position, ruling instead that the lack of express language in the TCPA regarding any temporal limit should not be interpreted as imposing such a limit. The Third Circuit read the silence in the TCPA in favor of the consumer, since, as the Court previously held, the TCPA is remedial in nature.
The Third Circuit again relied upon the common law understanding of consent; a person should be allowed to withdraw consent any time she no longer wishes to continue a particular sort of action.
The Third Circuit further noted in SoundBite, the revocation of consent in that decision came well after consent was initially provided. Therefore, the Court held there is no temporal time limit on revocation of prior express consent under the TCPA.
Lastly, the creditor argued that the consumer still failed to state a cause of action under the TCPA for two reasons: (1) the TCPA's content-based exemption for autodialed debt collection calls precluded the consumer from withdrawing her prior express consent; and (2) equitable principles dictated that the consumer should not be able to revoke her prior express consent.
The Court rejected both arguments. First, the Third Circuit held that the content-based exemption does not apply to cellular phones. Rather, it only applied to autodialed calls made to land-lines. See 47 C.F.R. § 64.1200(a)(2). The Third Circuit recognized that the only exemptions in the TCPA that apply to cellular phones are for emergency calls and calls made with prior express consent. Therefore, the Third Circuit concluded that the content-based exemption did not apply.
Next, the Third Circuit rejected the creditor's argument that basic principles of contract law should preclude the consumer from withdrawing her prior express consent. The creditor argued that a creditor's consent to receive automated phone calls constitutes consideration in support of the application. Further, the creditor argued that it would be unfair to allow a consumer to revoke prior express consent because a creditor may not be able to reach the consumer by autodialer in the debt-collection context.
The Third Circuit was not persuaded, finding that the ability to use an autodialing system is not an essential term to a credit agreement. Moreover, the Third Circuit concluded that the creditor's argument overlooks the fact that the creditor may still use a live person to contact the consumer in order to collect its debt.
Accordingly, the Third Circuit reversed the District Court's opinion, ruling that the consumer stated a plausible claim for relief because (1) the TCPA affords her the right to revoke her prior express consent to be contacted on her cellular phone via an autodialing system and (2) there is no temporal limitation on that right. The case was remanded for further proceedings.
Ralph T. Wutscher
McGinnis Wutscher Beiramee LLP
The Loop Center Building
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Chicago, Illinois 60602
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Email: RWutscher@mwbllp.com
Admitted to practice law in Illinois
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