Still Locked In: New York District Court Swiftly Follows Reyes–Dismisses TCPA Suit Because Contractual Consent Cannot be Revoked

Every time a TCPA claim gets dismissed because contractual consent cannot be revoked an angel gets its wings. Or something. Well, we now have another high-flying harp player thanks to the district court’s ruling in Ford v. Bluestem Brands, Inc., Case No. 18-cv-2695, 2019 U.S. Dist. Lexis 34636 (S.D.N.Y March 5, 2019).

In Ford, a pro per TCPA Defendant brought suit against a defendant for purportedly calling him without express consent. The Court found a way to dismiss the case– at the pleadings stage(!)– following Reyes v. Lincoln Auto. Fin. Servs., 861 F.3d 51, 56 (2d Cir. 2017)(“Good Reyes.”)

Here are the facts:

Plaintiff opened an account with the Defendant, obtained a line of credit and bought a computer. But the order was cancelled by the Defendant because it could not verify his mailing address for some reason. Nonetheless the Defendant–allegedly and rather oddly–tried to collect on the money owed for the laptop that was never received by placing collection calls to the Plaintiff’s cell phone. Plaintiff, allegedly, asked for the calls to stop–and did other entertaining things like demand Defendant pay him $150k and take steps to enforce a default against the Defendant when it failed to agree–and then sued the Defendant under the TCPA when the calls continued.

Defendant moved to dismiss the TCPA case because its online disclosures–apparently accepted by the Plaintiff by virtue of his cancelled computer order– contained an express consent provision. The Court–moving swiftly past the lean record at the pleadings stage–accepted Plaintiff’s complaint as alleging, in essence, he accepted the terms of the online agreement. See Ford at *7. It then swiftly recalled that Good Reyes prohibits a party from unilaterally revoking contractual consent. Id., citing Reyes at *56 for proposition that “[t]he TCPA “does not permit a party who agrees to be contacted as part of a bargained-for exchange to unilaterally revoke that consent.” It then swiftly–sensing a theme here?– dismissed the action because there were no calls placed to the Plaintiff after the Defendant honored the Plaintiff’s revocation effort.

Although Ford is in the Second Circuit–and hence was required to follow Good Reyes –there are a few interesting nuances to this case to keep in mind. First, the Court accepted the allegations that Plaintiff did business with Defendant over the internet as proof positive that he had consented in “bargained for” fashion to receive calls. Second, the Court enforced the Reyes provision even after the contract was allegedly cancelled–that’s a key ruling to keep in mind given the approach some courts are taking to the enforceability of arbitration provisions after a contract terminates. (See Gamble v. New Eng. Auto Fin., Inc., No. 17-15343, 2018 U.S. App. LEXIS 14608 (11th Cir. May 31, 2018)[TCPA claim arising from post-contractual conduct not subject to arbitration via clause in contract with consumer governing disputes arising out of contract.])  Third, and perhaps most interestingly, the Court accepted that the Defendant did not agree to the revocation until it accepted the revocation via a written letter.

That last point may not seem very important but remember– Good Reyes holds only that a contract cannot be unilaterally modified by a consumer to revoke consent. If a Defendant agrees in some manner to allow the contract to be modified and then continues to place calls the door might be open to a valid claim. Luckily for the Defendant in Ford the calls stopped when it “accepted” the revocation effort– the case might have ended differently otherwise.

Good chatting TCPAworld. More good stuff to come.