Reyes v. Lincoln Automotive Financial Services, No. 16-2104 (2d Cir. 2017)

Annotate this Case
Justia Opinion Summary

Plaintiff filed suit against Lincoln, alleging violations of the Telephone Consumer Protection Act (TCPA), 47 U.S.C. 227. The Second Circuit affirmed the district court's grant of summary judgment for Lincoln, holding that plaintiff did introduce sufficient evidence from which a jury could conclude that he revoked his consent, but that the TCPA does not permit a consumer to revoke its consent to be called when that consent forms part of a bargained‐for exchange. In this case, plaintiff's consent was not provided gratuitously, it was included as an express provision of a contract to lease an automobile from Lincoln.

The court issued a subsequent related opinion or order on August 21, 2017.

Download PDF
16 2104 cv Reyes v. Lincoln Automotive Fin. Servs. 1 2 In the 3 United States Court of Appeals 4 For the Second Circuit 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 ________ AUGUST TERM, 2016 ARGUED: APRIL 4, 2017 DECIDED: JUNE 22, 2017 No. 16 2104 cv ALBERTO REYES, JR., Plaintiff Appellant, v. LINCOLN AUTOMOTIVE FINANCIAL SERVICES, Defendant Appellee.* ________ Appeal from the United States District Court for the Eastern District of New York. No. 15 Civ. 560 – Leonard D. Wexler, Judge. ________ Before: WALKER, JACOBS, and PARKER, Circuit Judges. ________ _______ * The Clerk of Court is directed to amend the caption as shown above. 2 No. 16 2104 cv 1 Plaintiff appellant Alberto Reyes, Jr., appeals a judgment of 2 the United States District Court for the Eastern District of New York 3 (Leonard D. Wexler, J.). Judgment was entered following the grant 4 of summary judgment to the defendant appellee, Lincoln 5 Automotive Financial Services (“Lincoln”), on Reyes’s claim for 6 damages stemming from Lincoln’s alleged violation of the 7 Telephone Consumer Protection Act (“TCPA”), Pub. L. No. 102 243, 8 105 Stat. 2394 (1991) codified at 47 U.S.C. § 227. Reyes leased an 9 automobile from Lincoln and, as a condition of the lease agreement, 10 consented to receive manual or automated telephone calls from 11 Lincoln. Lincoln called Reyes regularly after he defaulted on his 12 lease obligations, and continued to do so after Reyes allegedly 13 revoked his consent to be called. Reyes sued for damages under the 14 TCPA. The district court granted summary judgment for Lincoln, on 15 the basis that (1) the evidence of consent revocation was insufficient, 16 and (2) in any event the TCPA does not permit revocation when 17 consent is provided as consideration in a binding contract. We hold 18 that (1) Reyes did introduce sufficient evidence from which a jury 19 could conclude that he revoked his consent, but that (2) the TCPA 20 does not permit a consumer to revoke its consent to be called when 21 that consent forms part of a bargained for exchange. We therefore 22 AFFIRM the judgment of the district court. 23 ________ 3 1 2 3 4 5 6 7 8 9 No. 16 2104 cv YITZCHAK ZELMAN, Marcus & Zelman, LLC, Ocean, NJ, for Plaintiffs Appellees. JESSICA L. ELLSWORTH (Morgan L. Goodspeed, on the brief), Hogan Lovells US LLP, Washington, DC, for Defendants Appellants. ________ JOHN M. WALKER, JR., Circuit Judge: 10 Plaintiff appellant Alberto Reyes, Jr., appeals a judgment of 11 the United States District Court for the Eastern District of New York 12 (Leonard D. Wexler, J.). Judgment was entered following the grant 13 of summary judgment to the defendant appellee, Lincoln 14 Automotive Financial Services (“Lincoln”), on Reyes’s claim for 15 damages stemming from Lincoln’s alleged violation of the 16 Telephone Consumer Protection Act (“TCPA”), Pub. L. No. 102 243, 17 105 Stat. 2394 (1991) codified at 47 U.S.C. § 227. Reyes leased an 18 automobile from Lincoln and, as a condition of the lease agreement, 19 consented to receive manual or automated telephone calls from 20 Lincoln. Lincoln called Reyes regularly after he defaulted on his 21 lease obligations, and continued to do so after Reyes allegedly 22 revoked his consent to be called. Reyes sued for damages under the 23 TCPA. The district court granted summary judgment for Lincoln, on 24 the basis that (1) the evidence of consent revocation was insufficient, 25 and (2) in any event the TCPA does not permit revocation when 4 No. 16 2104 cv 1 consent is provided as consideration in a binding contract. We hold 2 that (1) Reyes did introduce sufficient evidence from which a jury 3 could conclude that he revoked his consent, but that (2) the TCPA 4 does not permit a consumer to revoke its consent to be called when 5 that consent forms part of a bargained for exchange. We therefore 6 AFFIRM the judgment of the district court. 7 BACKGROUND 8 In 2012, Reyes leased a new Lincoln MKZ luxury sedan from a 9 Ford dealership.1 Lincoln financed the lease. In his lease application, 10 Reyes provided several personal details, including his cellular phone 11 number. The lease itself contained a number of provisions to which 12 Reyes assented when finalizing the agreement. One provision 13 permitted Lincoln to contact Reyes, and read as follows: 14 You [Reyes] also expressly consent and agree to Lessor [Ford], Finance Company, Holder and their affiliates, agents and service providers may use written, electronic or verbal means to contact you. This consent includes, but is not limited to, contact by manual calling methods, prerecorded or artificial voice messages, text messages, emails and/or automatic telephone dialing systems. You agree that Lessor, Finance Company, Holder and their affiliates, agents and service providers may use any email address or any telephone number you provide, 15 16 17 18 19 20 21 22 23 24 “Lincoln Automotive Financial Services” is a registered trade name of Ford Motor Credit Company LLC, and not an independent company. 1 5 No. 16 2104 cv 5 now or in the future, including a number for a cellular phone or other wireless device, regardless of whether you incur charges as a result. At some point after the lease was finalized, Reyes stopped making 6 his required payments. As a result, on multiple occasions, Lincoln 7 called Reyes in an attempt to cure his default. 8 9 he requested that Lincoln cease contacting him. Reyes asserts that on 10 June 14, 2013, he mailed a letter to Lincoln in which he wrote: “I 11 would also like to request in writing that no telephone contact be 12 made by your office to my cell phone.” Lincoln contends that it 13 never received Reyes’s letter, or any other request to cease its calls. 14 At his deposition, Reyes testified to mailing the letter to the P.O. box 15 listed on Lincoln’s invoices and produced a copy of the letter that 16 did not bear an address or postmark and referenced an incorrect 17 account number. Despite his alleged revocation of consent, Lincoln 18 continued to call Reyes. Following the close of discovery, Lincoln’s 19 attorney confirmed that Lincoln had called him 141 times with a 20 customer representative on the line, and had called him with pre 21 recorded messages an additional 389 times. 22 23 in the Eastern District of New York, alleging violations of the TCPA 1 2 3 4 Reyes disputed his balance on the lease, and also claims that On February 6, 2015, Reyes filed a complaint against Lincoln 6 No. 16 2104 cv 1 and seeking $720,000 in damages.2 On June 20, 2016, Judge Wexler 2 granted summary judgment to Lincoln, holding that (1) Reyes had 3 failed to produce sufficient evidence from which a reasonable jury 4 could conclude that he had ever revoked his consent to be contacted 5 by Lincoln, and (2) that, in any event, the TCPA does not permit a 6 party to a legally binding contract to unilaterally revoke bargained 7 for consent to be contacted by telephone. 8 Reyes now timely appeals both rulings. DISCUSSION 9 10 A district court’s grant of summary judgment is reviewed de 11 novo. Gallo v. Prudential Residential Servs., Ltd. P ship, 22 F.3d 1219, 12 1224 (2d Cir. 1994). On a motion for summary judgment, the court 13 must “resolv[e] all ambiguities and draw[] all permissible factual 14 inferences in favor of the party against whom summary judgment is 15 sought.” Burg v. Gosselin, 591 F.3d 95, 97 (2d Cir. 2010). Summary 16 judgment is appropriate only “if the movant shows that there is no 17 genuine dispute as to any material fact and that the movant is 18 entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). All Reyes also initially sought damages under the Fair Debt Collection Practices Act (“FDCPA”), but abandoned those claims prior to summary judgment because Lincoln is not a “debt collection agency” within the meaning of the FDCPA. Only his TCPA claims remain. 2 7 No. 16 2104 cv 1 legal conclusions by a district court are reviewed de novo. United 2 States v. Livecchi, 711 F.3d 345, 351 (2d Cir. 2013) (per curiam). 3 On appeal, Reyes contends (1) that he introduced sufficient 4 evidence to create a triable issue of fact as to whether he placed 5 Lincoln on notice of his revocation of consent; and (2) that the TCPA, 6 construed in light of its broad remedial purpose to protect 7 consumers from unwanted phone calls, does permit a party to 8 revoke consent to be called, even if that consent was given as part of 9 a contractual agreement. 10 11 I. 12 Whether Reyes revoked his consent to be contacted was a triable issue of fact 13 As a preliminary matter, we agree with Reyes that the district 14 court’s finding that he did not revoke his consent to be contacted by 15 telephone was improper on summary judgment. This material issue 16 of fact was in dispute and raised a jury question. Reyes testified in a 17 sworn deposition that he mailed a letter to Lincoln revoking his 18 consent; submitted an affidavit to that effect; and introduced a copy 19 of the letter as evidence in defending Lincoln’s motion for summary 20 judgment. The district court discounted this evidence as 21 “insufficient,” because Reyes “does not recall the address that he 22 mailed the Letter to,” and because “he has no record that the Letter 23 was actually sent to Defendant.” The district court also noted that 8 No. 16 2104 cv 1 Lincoln sent a letter to Reyes on December 1, 2014, stating that it had 2 never received any revocation of consent from Reyes. 3 4 consent rested on an impermissible assessment by the court of 5 Reyes’s credibility. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 6 255 (1986) (“Credibility determinations, the weighing of the 7 evidence, and the drawing of legitimate inferences from the facts are 8 jury functions, not those of a judge . . . [when] he is ruling on a 9 motion for summary judgment.”). Reyes introduced two separate 10 forms of sworn testimony asserting that he had mailed a letter 11 revoking his consent to be called, and Lincoln responded in turn that 12 it had never received the letter. Adverse parties commonly advance 13 “conflicting versions of the events” throughout the course of a 14 litigation. Jeffreys v. City of N.Y., 426 F.3d 549, 553 54 (2d Cir. 2005) 15 (quoting Rule v. Brine, Inc., 85 F.3d 1002, 1011 (2d Cir. 1996). In such 16 instances, on summary judgment, the district court is required to 17 “resolv[e] all ambiguities and [draw] all permissible factual 18 inferences in favor of the party against whom summary judgment 19 [is] sought.” Burg, 591 F.3d at 97. “[T]he judge must ask . . . not 20 whether . . . the evidence unmistakably favors one side or the other 21 but whether a fair minded jury could return a verdict for the 22 plaintiff on the evidence presented.” Jeffreys, 426 F.3d at 553 (quoting 23 Anderson, 477 U.S. at 252). Under this standard, the district judge The district court’s conclusion that Reyes did not revoke his 9 No. 16 2104 cv 1 erred in concluding that no reasonable jury could find that Reyes 2 revoked his consent, when Reyes introduced sworn testimony to the 3 contrary.3 Whether that testimony was reliable was a question of fact 4 for the jury. See id. 5 6 II. Under the TCPA a party is not able to revoke consent that is a term in a prior contract 7 We next turn to the district court’s determination that the 8 9 TCPA does not permit Reyes to unilaterally revoke his consent. 10 Congress enacted the TCPA to protect consumers from 11 “[u]nrestricted telemarketing,” which it determined could be “an 12 intrusive invasion of privacy.” Mims v. Arrow Fin. Servs., LLC, 565 13 U.S. 368, 372 (2012) (internal quotation marks and citation omitted) 14 accord Gager v. Dell Fin. Servs., LLC, 727 F.3d 265, 268 (3d Cir. 2013). 15 To mitigate this problem, the act prohibits, subject to narrow 16 exceptions not pertinent here, any person within the United States 17 from “initiat[ing] any telephone call to any residential telephone line 18 using an artificial or prerecorded voice to deliver a message without 19 the prior express consent of the called party.” 47 U.S.C. 20 § 227(b)(1)(B). The TCPA also authorizes the Federal Whatever impact the use of the wrong account number may be reasonably assumed to have on Reyes’s attempt at revocation, the district court did not rely on that fact. 3 10 No. 16 2104 cv 1 Communications Commission (“FCC”) to promulgate rules and 2 regulations in order to further implement the act’s provisions. 47 3 U.S.C. § 227(b)(2). 4 While the act requires that any party wishing to make live or 5 prerecorded calls obtain prior express consent, the statute is silent as 6 to whether a party that has so consented can subsequently revoke 7 that consent. Two of our sister circuit courts have ruled that a party 8 can revoke prior consent under the terms of the act. In Gager v. Dell 9 Financial Services, the Third Circuit held that the plaintiff, who 10 consented to be called in an application for a line of credit that she 11 submitted to the defendant, was permitted to later revoke that 12 consent after receiving harassing calls upon her default on the loan. 13 727 F.3d at 267 68. The court reasoned that “consent,” as defined 14 under the common law, is traditionally considered to be revocable. 15 Id. at 270. Moreover, permitting consumers to revoke consent would 16 further Congress’s purpose in enacting the TCPA, which was “to 17 protect consumers from unwanted automated telephone calls.” Id. at 18 271. The Eleventh Circuit, in Osorio v. State Farm Bank F.S.B., adopted 19 the Third Circuit’s reasoning and held that the plaintiff in that case, 20 who had consented to receive calls from the defendant in an 21 application for auto insurance, could revoke her consent. 746 F.3d 22 1242, 1253 (11th Cir. 2014). In 2015, the FCC relied on these two cases 23 in ruling that “prior express consent” is revocable under the TCPA. 11 No. 16 2104 cv 1 See In the Matter of Rules & Regulations Implementing the Tel. Consumer 2 Prot. Act of 1991, 30 F.C.C. Rcd. 7961, 7993 94 (2015) (hereinafter 3 “2015 FCC Ruling”). 4 Gager, Osorio, and the 2015 FCC Ruling considered a narrow 5 question: whether the TCPA allows a consumer who has freely and 6 unilaterally given his or her informed consent to be contacted can 7 later revoke that consent. See Osorio, 746 F.3d at 1253; Gager, 727 8 F.3d at 270. Reyes’s appeal presents a different question, which has 9 not been addressed by the FCC or, to our knowledge, by any federal 10 circuit court of appeal: whether the TCPA also permits a consumer 11 to unilaterally revoke his or her consent to be contacted by telephone 12 when that consent is given, not gratuitously, but as bargained for 13 consideration in a bilateral contract. 14 Reyes contends that the same principles that the FCC and the 15 Third and Eleventh Circuits relied on in their previous rulings apply 16 to this situation as well. He argues that (1) under the common law 17 definition of the term, which Congress is presumed to have adopted 18 when it drafted the TCPA, any form of “consent” (whether 19 contractual or not) is revocable by the consenting party at any time; 20 and (2) permitting parties to revoke their consent to be called is 21 consistent with the remedial purpose of the TCPA, which was 22 designed by Congress to afford consumers broad protection from 23 harassing phone calls. 12 No. 16 2104 cv 1 We agree with the district court that the TCPA does not 2 permit a party who agrees to be contacted as part of a bargained for 3 exchange to unilaterally revoke that consent, and we decline to read 4 such a provision into the act. As an initial matter, Reyes is correct 5 that when Congress uses a term, such as “consent,” that has 6 “accumulated [a] settled meaning under . . . the common law, a 7 court must infer, unless the statute otherwise dictates, that Congress 8 means to incorporate the established meaning of th[at] term[].” 9 Neder v. United States, 527 U.S. 1, 21 (1999) (citation omitted). The text 10 of the TCPA evidences no intent to deviate from common law rules 11 in defining “consent,” and the FCC and other federal appellate 12 courts have applied the common law definition of the term when 13 interpreting the act. See Gager, 727 F.3d at 270; 2015 FCC Ruling at 14 *7961 (holding that permitting “unwanted texts and voice calls is 15 counter . . . to common law notions of consent”). 16 “Consent,” however, is not always revocable under the 17 common law. A distinction in this regard must be drawn between 18 tort and contract law. In tort law, “consent” is generally defined as a 19 gratuitous action, or “[a] voluntary yielding to what another 20 proposes or desires.” Black’s Law Dictionary (10th ed. 2014); see also 21 Gager, 727 F.3d at 270 (“Under the common law understanding of 22 consent, the basic premise of consent is that it is given voluntarily.” 23 (internal quotation marks omitted)). In Gager and Osorio the 13 No. 16 2104 cv 1 plaintiffs provided such voluntary consent to be contacted by 2 furnishing their telephone numbers to businesses in connection with 3 loan and insurance applications, respectively. See Gager, 727 F.3d at 4 267; Osorio, 746 F.3d at 1247; see also Rules and Regulations 5 Implementing the TCPA, 7 F.C.C. Rcd. 8752, 8769 (1992) (ruling that 6 the “knowing[]” release of a phone number to a third party 7 constitutes “express consent” to receive telephone calls from that 8 party under the TCPA). The courts in those cases found, and the 9 2015 FCC ruling confirmed, that consent of this kind, which is not 10 given in exchange for any consideration, and which is not 11 incorporated into a binding legal agreement, may be revoked by the 12 consenting party at any time. This conclusion is well supported by 13 common law authority, which counsels that “[u]pon termination of 14 consent its effectiveness is terminated.” RESTATEMENT (SECOND) OF 15 TORTS § 892A(5) (AM. LAW INST. 1979). 16 Reyes’s consent to be contacted by telephone, however, was 17 not provided gratuitously; it was included as an express provision of 18 a contract to lease an automobile from Lincoln. Under such 19 circumstances, “consent,” as that term is used in the TCPA, is not 20 revocable. The common law is clear that consent to another’s actions 21 can “become irrevocable” when it is provided in a legally binding 22 agreement, RESTATEMENT (SECOND) OF TORTS § 892A(5) (AM. LAW 23 INST. 1979), in which case any “attempted termination is not 14 No. 16 2104 cv 1 effective,” id. at cmt. i. See also 13 67 CORBIN ON CONTRACTS § 67.1 2 (2017) (noting that “a party who is under a legal duty [to perform a 3 contractual obligation] by virtue of its assent” has the burden to 4 prove that that duty was discharged by some subsequent event, 5 such as recission by “mutual agreement” or by the exercise of a 6 contractual right to terminate). This rule derives from the 7 requirement that every provision of a contract—including any 8 proposed modification—receive the “mutual assent” of every 9 contracting party in order to have legal effect. Dallas Aerospace, Inc. v. 10 CIS Air Corp., 352 F.3d 775, 783 (2d Cir. 2003) (“[F]undamental to the 11 establishment of a contract modification is proof of each element 12 requisite to the formulation of a contract, including mutual assent to 13 its terms.” (internal quotation marks and citation omitted)). It is 14 black letter law that one party may not alter a bilateral contract by 15 revoking a term without the consent of a counterparty. See 16 RESTATEMENT (SECOND) OF CONTRACTS § 287 cmt. a (AM. LAW INST. 17 1981) (requiring “assent by the other party” before a proposed 18 alteration to a contract becomes valid). Yet reading the TCPA’s 19 definition of “consent” to permit unilateral revocation at any time, 20 as Reyes suggests, would permit him to do just that. Absent express 21 statutory language to the contrary, we cannot conclude that 22 Congress intended to alter the common law of contracts in this way. 23 See Neder, 527 U.S. at 21 23. 15 No. 16 2104 cv 1 Reyes also argues that his consent to be contacted is revocable 2 because that consent was not an “essential term” of his lease 3 agreement with Lincoln. This argument is meritless. In contract law, 4 “essential terms” are those terms that are necessary in order to lend 5 an agreement sufficient detail to be enforceable by a court. 6 Brookhaven Hous. Coal. v. Solomon, 583 F.2d 584, 593 (2d Cir. 1978) (“If 7 essential terms of an agreement are omitted or are phrased in too 8 indefinite a manner, no legally enforceable contract will result.”). 9 For example, a contract for the sale of goods must contain terms 10 such as the quantity of goods to be sold and the price at which they 11 will be purchased. But a contractual term does not need to be 12 “essential” in order to be enforced as part of a binding agreement. It 13 is a fundamental rule of contracts that parties may bind themselves 14 to any terms, so long as the basic conditions of contract formation 15 (e.g., consideration and mutual assent) are met. Chesapeake Energy 16 Corp. v. Bank of N.Y. Mellon Trust Co., 773 F.3d 110, 114 (2d Cir. 2014) 17 (noting the common law rule that a “contract should be construed so 18 as to give full meaning and effect to all of its provisions”(alterations, 19 internal quotation marks and citation omitted) (emphasis added)). A 20 party who has agreed to a particular term in a valid contract cannot 21 later renege on that term or unilaterally declare it to no longer apply 22 simply because the contract could have been formed without it. 23 Contracting parties are bound to perform on the terms that they did 16 No. 16 2104 cv 1 agree to, not what they might have agreed to under different 2 circumstances. 3 Reyes counters that because the TCPA is a remedial statute 4 enacted to protect consumers from unwanted telephone calls, any 5 ambiguities in its text must be construed to further that purpose. 6 See Atchison, Topeka & Santa Fe Ry. Co. v. Buell, 480 U.S. 557, 562 7 (1987) (holding that when interpreting broad remedial statutes, 8 courts should apply a “standard of liberal construction in order to 9 accomplish [Congress’s] objects” (citation omitted)); E.E.O.C. v. 10 Staten Island Sav. Bank, 207 F.3d 144, 149 (2d Cir. 2000) (“[I]t is our 11 duty to interpret remedial statutes broadly.”). A liberal reading of an 12 ambiguous term might favor a right to revoke contractual consent. 13 But for the remedial rule of statutory interpretation to apply, the 14 statute must contain an actual ambiguity to construe in the 15 consumer’s favor, and we find no lack of clarity in the TCPA’s use of 16 the term “consent.” It was well established at the time that Congress 17 drafted the TCPA that consent becomes irrevocable when it is 18 integrated into a binding contract, and we find no indication in the 19 statute’s text that Congress intended to deviate from this common 20 law principle in its use of the word “consent.” See Neder, 527 U.S. at 21 21. 22 We are sensitive to the argument that businesses may 23 undermine the effectiveness of the TCPA by inserting “consent” 17 No. 16 2104 cv 1 clauses of the type signed by Reyes into standard sales contracts, 2 thereby making revocation impossible in many instances. See, e.g., 3 Skinner v. Bluestem Brands, Inc., No. 3:14 CV 256 CWR FKB, 2015 WL 4 4135269, at *3 (S.D. Miss. July 8, 2015). But this hypothetical concern, 5 if valid, is grounded in public policy considerations rather than legal 6 ones; if the abuse came to pass, it would therefore be “for 7 the Congress to resolve—not the courts.” Atl. City Elec. Co. v. Gen. 8 Elec. Co., 312 F.2d 236, 244 (2d Cir. 1962) (en banc). We are not free to 9 substitute our own policy preferences for those of the legislature by 10 reading a right to revoke contractual consent into the TCPA where 11 Congress has provided none. CONCLUSION 12 13 We have considered Reyes’s remaining arguments, and we 14 find them meritless. We therefore AFFIRM the judgment of the 15 district court.