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Contractual Consent Matters: Barton Decision Delivers First Out-of-Circuit Win for Reyes Holding that Contractual Consent is Irrevocable

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It has been a long time coming but adherents to the rationale of Reyes v. Lincoln Auto. Fin. Servs., 861 F.3d 51, 56 (2d Cir. 2017) finally have an out-of-circuit victory to crow about. Sort of.

Setting the stage, in Reyes the Second Circuit Court of Appeal was asked to determine whether a customer who had given consent to be robocalled in a contract had the right to unilaterally revoke that consent. The Reyes court had little trouble concluding that the answer was “no”—like other contractual terms a consumer cannot simply change the terms of their contractual consent provision to suit their mood.

Addressing a similar issue, the district Court in Barton v. Credit One Fin., Case No. 16CV2652, 2018 U.S. Dist. LEXIS 72245 (N.D. Oh. April 27, 2018) concluded that a contractual revocation provision requiring a consumer to provide written notification of a revocation request—including specific information related to the account and phone number for which the revocation was to take place—was an enforceable contractual provision that the consumer could not evade with an oral “stop call” request.  In reaching the ruling, the Court squarely rejected Plaintiff’s reliance on distinguishable case law—presumably Osorio v. State Farm Bank, FSB, 746 F. 3d 1242 (11th  Cir. 2014) and Gager v. Dell Financial Services, LLC, 727 F. 3d 265 (3rd Cir. 2013)—and concludes that the TCPA “does not permit a consumer who agrees to be contacted by telephone as part of a bargained-for transaction to unilaterally revoke that consent.” Barton at 9, following Reyes.

This last line is dynamite for callers who have been hoping to leverage Reyes outside of the Second Circuit. Prior to Barton, the Reyes scorecard was pretty bleak. Indeed, only one district court opinion had followed ReyesRodriguez v. Student Assistance Corp., No. 17-CV-01577 (BMC), 2017 U.S.Dist.LEXIS 183588 (E.D.N.Y. Nov. 6, 2017)— and that was a decision from within the Second Circuit. On the other side of the ledger are two district court decisions that flat refused to follow Reyes in favor of the rule of Osorio and Gager that allows consumers to revoke consent (albeit not contractual consent). See McBride v. Ally Fin., Inc., No. 15-867, 2017 U.S.Dist.LEXIS 142804 (W.D.Pa. Sept. 5, 2017); and Ginwright v. Exeter Fin. Corp., 280 F. Supp. 3d 674 (D.Md. 2017). And two additional district court cases cast aspersions on Reyes before ultimately determining that the consent clauses before them are not broad enough to encompass the subject messages anyway. See Ruffrano v. HSBC Fin. Corp., No. 15CV958A, 2017 U.S.Dist.LEXIS 132674 (W.D.N.Y. Aug. 17, 2017) and Patterson v. Ally Fin., Inc., No. 3:16-cv-1592-J-32JBT, 2018 U.S.Dist.LEXIS 15203, (M.D.Fla. Jan. 31, 2018). For callers hoping to make use of contractual consent provisions, therefore, Barton is a much-needed victory that was a long time coming.

Although Barton does not directly mention ACA Int’l v. FCC, No. 15-211, 2018 U.S. App. LEXIS 6535 (D.C. Cir. Mar. 16, 2018)—the big D.C. Circuit Court of Appeal ruling that overturned the FCC’s 2015 TCPA Omnibus ruling—ACA Int’l’s firmly supports Reyes in one important respect—it notes that the FCC’s Omnibus ruling does not impact contracting parties’ ability to decide for themselves how revocation can take place. ACA Int’l at *43 (“[n]othing in the Commission’s order thus should be understood to speak to the parties’ ability to agree upon revocation procedures.” )

It is worth pointing out that the consent provision in Reyes did not specifically dictate whether or how consent can be revoked. Instead, the Court inferred from that silence that the contractual consent clause could not be modified.  That was not an issue in Barton, however, since the clause clearly permitted revocation of consent to take place, but only in a highly specific way. By enforcing that clause Barton reaches an easy result that is consistent with both ACA Int’l and Reyes.

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