Ok, this has got to be the most unlikely TCPA ruling out there.
And its not just because the ruling is probably incorrect–I like the ruling, I just don’t want people getting excited by it and hurting themselves–its because of truly against the grain it is.
I mean, when a federal court cites to a case that literally stands for the opposition proposition as the ruling suggests, you know something has gone off the rails.
The case at issue is Beard v. John Hiester Chevrolet, 2022 WL 16840332 (E.D. N.C. Nov. 9, 2022) and it is DEFINITELY going to give fits to inhouse counsel trying to keep corporate marketing teams in check.
The dealership then sent her a bunch of ringless voicemails.
Beard sued and the dealership raised the consent within the adhesion terms and conditions as a defense.
It gets better.
The dealership FAILED TO ASSERT CONSENT AS AN AFFIRMATIVE DEFENSE in its answer. That, right there, could have ended its bid to enforce the consent. Just a terrible oversight. But the Court determined Plaintiff wasn’t prejudiced by it and allowed the Defendant to raise the defense anyway.
It gets better.
The dealership did not actually have direct evidence that the Plaintiff accepted the disclosure at issue. Instead the dealership relied on evidence of how the form was set up, not on what actually happened when the Plaintiff visited the website.
It gets better.
The dealership argued that ringless voicemails aren’t calls under the TCPA. Literally every single case to consider the issue has disagreed. But the dealership still lobbed this dog of an argument at the court. The Court rejected the argument–as you’d expect–but apparently did not hold this miss against the Defendant either.
So now we get to the big ruling. As you can see it is unlikely this is going to go in the defendant’s favor just based on, you know, the failure to raise consent as a defense or to actually have evidence of it. The bad RVM argument doesn’t help either.
Can the dealership enforce a consent disclosure buried in the terms and conditions which were only visible when a hyperlink was clicked?
Before we answer, we need context.
“Express written consent” is a term specially defined the in CFR provisions implementing the TCPA.
The CFR defines the term prior express written consent to mean “an agreement, in writing, bearing the signature of the person called that clearly authorizes the seller to deliver or cause to be delivered to the person called advertisements or telemarketing messages using an automatic telephone dialing system or an artificial or prerecorded voice, and the telephone number to which the signatory authorizes such advertisements or telemarketing messages to be delivered.”
Further the consent must: “include a clear and conspicuous disclosure informing the person signing that: (A) By executing the agreement, such person authorizes the seller to deliver or cause to be delivered to the signatory telemarketing calls using an automatic telephone dialing system or an artificial or prerecorded voice; and (B) The person is not required to sign the agreement (directly or indirectly), or agree to enter into such an agreement as a condition of purchasing any property, goods, or services. (ii) The term “signature” shall include an electronic or digital form of signature, to the extent that such form of signature is recognized as a valid signature under applicable federal law or state contract law.”
And the definition of clear and conspicuous means: “means a notice that would be apparent to the reasonable consumer, separate and distinguishable from the advertising copy or other disclosures.”
It is also notable that the FCC has placed the burden of proving the disclosure was clearly and conspicuously made on the operator of the website. See In the Matter of Rules & Regulations Implementing the Tel. Consumer Prot. Act of 1991, 27 F.C.C. Rcd. 1830, 1844 (2012)(“Finally, should any question about the consent arise, the seller will bear the burden of demonstrating that a clear and conspicuous disclosure was provided and that unambiguous consent was obtained.”)
You put all of this together and most folks are looking for a SEPARATE CONSPICUOUS consent disclosure as part of their TCPA consent flows. And for good reason. Even in this context courts will sometimes scrutinize the sufficiency of a disclosure.
So armed with all of that, we come back to Beard.
Can the Defendant use a consent provision that was not conspicuously disclosed on its website but was–at best–only conspicuously disclosed in its terms and conditions to win the case?
Yes. The court held the consent was still enforceable express written TCPA consent!
Really, mind broken.
In reaching this conclusion the court cited three cases. Regan v. Pinger, Inc., No. 20-CV-02221, 2021 WL 706465, at *6 (N.D. Ca. Feb. 23, 2021) (unpublished) (collecting cases); Lundbom v. Schwan’s Home Service, Inc., No. 3:18-cv-02187, 2020 WL 2736419, at * 7–9 (D. Or. May 26, 2020) (unpublished); Sullivan v. All Web Leads. Inc., No. 17 C 1307, 2017 WL 2378079, at *6–8 (N.D. Ill. June 1, 2017) (unpublished) (collecting cases).
Notably in none of the three cases the court cited to in support was an express written consent provision found within the broader terms of a contract of adhesion. Regan was a case involving arbitration, not TCPA consent. In Lundbom the consent disclosure was separately signed and agreed to (although it did not contain the full Troutman Nine.)
Worst of all, in Sullivan the court actually found All Web Lead’s disclosure could not be enforced:
Given the website’s silence on quotes proceeding by phone and failure to alert users that legal disclosures appear below the “Submit” box, the Court cannot, while drawing inferences in Sullivan’s favor, find that All Web’s alleged consent mechanism gave Sullivan reasonable notice sufficient for an enforceable written “agreement”—to say nothing of the TCPA’s heightened “clear and conspicuous” disclosure requirement governing prior express written consent agreements. Thus, All Web has not made a legal showing based on the complaint’s allegations that it effectively procured Sullivan’s prior express written consent.
Sullivan at *8 (emphasis added.)
So none of the cases Beard relies upon actually support the ruling. And to be sure, Beard is the FIRST CASE EVER to hold that TCPA express written consent can be obtained via an adhesion contract.
So… tread carefully.
Rounding out the analysis here, the Beard court was motivated by the CLARTIY of the acceptance of the terms and conditions provision:
In the Court’s view, therefore, there was no question that Beard accepted the terms and conditions. That was enough for it to conclude that the consent was thereby accepted.
It is CRITICAL to note, however, that the Court did not address the FCC’s CFR standards around the requirement of a conspicuous disclosure. Indeed the word “conspicuous” only appears in the ruling when the court is reciting the applicable standard. The Court never actually found that the provision was conspicuous as required–so, again, tread very carefully here.
Also important– the Court did not address the fact that the Plaintiff had to accept the terms and conditions in order to proceed through the flow. Usually those attempting to obtain consent need to be sure to allow a separate route when providing online goods and services to assure that the FCC’s command that consent not be “required” as part of a transaction be complied with. On the other hand, it doesn’t seem like consent on the website was any for of barrier to the purchase of a good or a service. Nonetheless it is weird that the issue was not addressed here.
Now let me say this– I am not saying Beard is wrongly decided. I pointed out all the eccentricities with the case because I do NOT want people getting carried away and thinking this is the best way to obtain consent. Beard might be correct. But it is also only a single district court ruling against a sea of CFR provisions that seem to be counseling for a different outcome–and it doesn’t seem to address the key issues of conspicuousness, at all.
Still though, this is HUGE. If an adhesion terms and conditions link can be used to capture consent it opens up all kinds of interesting opportunities. But really it gives litigants a defense anytime they are attempting to use ANY consent form–conspicuous or not.
And perhaps the biggest impact here is that it might slow down the recent SPIKE in TCPA class actions that have been filed the last couple of months. There is seemingly a ton of momentum out there with a pile of new suits being filed. This should at least give pause to Plaintiff’s lawyers who are hoping to defeat a non-conspicuous clause.
But I will admit, I am torn on this ruling. On the one hand I love having a great new defense in my basket. But on the other hand consumers are already suffering from too many robocalls they don’t want. I’m not sure empowering callers to be LESS clear about consent is really the answer. Indeed, when the newly-formed REACH board votes on standards (likely by the end of the year) it will DEFINITELY require clearer consent than Beard is suggesting.
Which brings me to my final point. The FCC is watching. Cases like Beard may prompt the FCC to act and issue further rulings around consent. I can only hope (and act to assure) that the REACH standards are before the Commission before the NCLC gets there…
So. Huge case. Go digest and enjoy your weekend TCPAWorld.