Alberto Reyes, Jr., the consumer who sued Lincoln Automotive Financial Services for violating the Telephone Consumer Protection Act (TCPA), has asked the full Second Circuit for a rehearing to reconsider his case. Reyes argues that the original three-judge panel decision finding -- that consent given in contracts isn’t revocable -- conflicts with opposite decisions in other courts of appeal. The case is Reyes, Jr. v. Lincoln Automotive Financial Services, Case No. 15-0560, (Eastern District of New York, June 20, 2016).

A copy of the Petition for Rehearing and Rehearing En Banc can be found here.

insideARM wrote about the original district court decision on July 5, 2016, and then wrote about the Court of Appeals decision on June 23, 2017.

Background 

Both of the prior articles noted above provide a detailed background of the facts and issues presented in the case. The case revolves around consent to be called on a cell phone and the potential revocation of that consent.

As noted in our June 23, 2017 article, the Second Circuit affirmed the original district court judgment in favor of the defendant. The Second Circuit held that (1) Reyes did introduce sufficient evidence from which a jury could conclude that he revoked his consent, but that (2) the TCPA does not permit a consumer to revoke its consent to be called when that consent forms part of a bargained‐for exchange. (Emphasis added by insideARM

The Petition for Rehearing 

The Petition filed by Reyes is requesting a rehearing en banc. What does “en banc” mean? The U.S. Courts of Appeals usually assign cases to a “panel” of three or more judges. Panels contain fewer judges than the Court of Appeals as a whole. The Reyes case was heard by a panel of 3 Circuit Judges. The panel judges heard the appeal and rendered a decision.  

After a panel has heard the appeal and issued its opinion, either party to the appeal may choose to request another hearing “en banc.”  This request asks the court to hear the case again, this time with all of the court’s judges listening to the case. 

In this case, Reyes argues: 

“Rehearing or rehearing en banc is warranted because this case presents a question of exceptional importance because the panel decision: 

(1) conflicts with the holdings of the Third, Gager v. Dell Financial Services, LLC, 727 F.3d 265 (3d Cir. 2013); Ninth, Van Patten v. Vertical Fitness Group, LLC, 847 F.3d 1037 (9th Circ. 2017); and Eleventh Circuits, Osorio v. State Farm Bank, F.S.B., 746 F.3d 1242 (11th Cir. 2014); that consumers have the right to revoke consent to be robocalled under the Telephone Consumer Protection Act. 

(2) conflicts with the Federal Communications Commission’s authoritative conclusion that consumers have the right to revoke consent to be robocalled under the Telephone Consumer Protection Act. In re Rules & Regulations Implementing the Telephone Consumer Protection Act of 1991, 30 F.C.C. Rcd. 7961, 7964, 7969 (July 10, 2015); and 

(3) opens the door to widespread fine-print waivers of substantive consumer protection law.” 

The Petitioner’s argument is effectively summarized in the introduction section of the Petition: 

“The Telephone Consumer Protection Act (TCPA) is intended to curb the staggering numbers of unwanted robocalls Americans receive by prohibiting autodialed or pre-recorded calls to consumers’ cell phones unless consumers give “prior express consent.” Three federal courts of appeals—every other court of appeals to have considered the question—and the Federal Communications Commission (FCC) have concluded that, inherent in the concept of TCPA consumer consent is the ability to revoke that consent. Neither the other courts, nor the FCC have so much as hinted at any exceptions or qualifications to that right, which is grounded in the text and purpose of the TCPA and is consistent with the common law. To the contrary, the FCC has stressed that the very notion of TCPA consumer consent dissolves if that consent is irrevocable. The panel decision in this case is in conflict with those well considered rulings. The panel held that a consumer’s consent to be robocalled on his cell phone is not revocable where the consent occurs in the context of a contract. If left to stand, that holding creates chaos and uncertainty, especially for nationwide companies that use automated systems to contact their customers’ cell phones—in addition to the usual compelling reasons to avoid a circuit split, following the panel’s ruling may put a company in the crosshairs of an FCC enforcement action. 

Rehearing should also be granted because it opens the door to the evisceration of statutory consumer rights. Federal consumer protection statutes cannot be contracted around. Otherwise, in the modern world of lengthy, one-sided, boilerplate contracts, companies will seek to avoid compliance with federal law by dropping waivers into the fine print. Perhaps a company would prefer not to comply with the Federal Debt Collection Practices Act, the Truth in Lending Act, or the usury limits imposed by the Military Lending Act. If all it took for a company to avoid liability for violating those laws was to include a waiver in the fine print, those consumer protections would have little value. Here, by saying that consent to be robodialed cannot be revoked if it is in a contract, the Court creates an incentive for each company using robodialers to insert exactly that language into their contracts.” 

insideARM Perspective 

TCPA attorneys will be watching this case with great interest. Our insideARM Perspective in the June, 2017 article provided comments from two prominent attorneys in the space. Their comments hold true to this development. 

However, this story may be destined for multiple additional chapters. Regardless of the outcome at the Court of Appeals, it seems the issue may wind up at the Supreme Court to resolve the conflict in the circuits. 

insideARM will continue to monitor the case and report on future activity. 


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