D.C. Circuit Dooms “Idiosyncratic” or “Imaginative” TCPA Revocation Efforts While Blessing Contractual Revocation Provisions in Upholding FCC’s Revocation Approach

Nearly a year-and-a-half after oral argument on the ACA International v. FCC petition for review of the Federal Communications Commission’s (“FCC” or “Commission”) 2015 Omnibus Order (or “Omnibus”), the D.C. Circuit Court of Appeals issued its long-anticipated opinion last Friday, March 16th, in a 51-page decision authored by Judge Srinivasan. The decision, which addressed four issues of clarification on aspects of the TCPA’s prohibition on using automated dialing devices to place calls to consumers’ wireless telephone numbers, set aside the FCC’s definition of an ATDS (automatic telephone dialing system); vacated as “arbitrary and capricious” the strict conditions allowing for a one-call safe harbor for calling reassigned numbers;” and sustained the Commission’s approach to revocation of consent and the scope of the exemption for time-sensitive healthcare calls. This article focuses on the D.C. Circuit’s handling of the issue of revocation of consent and its further implications for contracting parties addressing the same.

The D.C. Circuit spends three pages of its opinion discussing revocation of consent, noting first that it is undisputed that consenting consumers are allowed to revoke their consent, but that the statute itself does not elaborate as to how. On review was the FCC’s conclusion in its 2015 Omnibus Order that the called party may revoke consent by “any reasonable means that clearly expresses a desire not to receive further messages,” whether orally or in writing, considering “the totality of the facts and circumstances.” While the D.C. Circuit found none of the Petitioners’ arguments challenging the treatment of revocation to be persuasive (labelling Petitioners’ concerns as “overstated”), the Court confirmed that parties can contract as to how consumers can revoke consent, suggesting that callers can avoid TCPA liability by having “clearly-defined and easy-to-use opt-out methods.” See ACA Int’l v. FCC, No. 15-122, Doc. No. 1722606 at 41-42 (D.C. Cir. Mar. 16, 2018).

Taking it piece by piece, the D.C. Circuit blessed the FCC’s general rule that consent can be revoked by “any reasonable means.” The Court also clarified that whether or not a means used by the consumer is “reasonable” is determined under a totality-of-the-circumstances approach. While this had been hinted at in the case law—most directly by Ruffrano v. HSBC Fin. Corp., No. 15CV958A, 2017 U.S. Dist. LEXIS 132674 (W.D.N.Y. Aug. 17, 2017)—few decisions had overtly adopted the totality-of-the-circumstances approach. Also helpful, the D.C. Circuit provided a few nuggets to assist callers and litigants to know what circumstances are relevant. One factor to consider is “whether the caller could have implemented mechanisms to effectuate a requested revocation without incurring undue burdens.” Another point the D.C. Circuit made regarding the totality of the circumstances is “whether the consumer had a reasonable expectation that he or she could effectively communicate his or her request . . . in that circumstance.” Id. at 41.

The latter point is particularly important when dealing with manufactured TCPA lawsuits. Attracted by the allure of large-dollar settlements (and in some cases, judgments), many unscrupulous litigants have taken to intentionally evading opt-out mechanisms in an effort to create TCPA lawsuits. One such scheme was put to rest recently by the Court in Viggiano v. Kohl’s Dep’t Stores, Inc., Civ. Action No. 17-0243-BRM-TJB, 2017 U.S. Dist. LEXIS 193999 (D.N.J. Nov. 27, 2017), where the Court held that a Plaintiff who had failed to follow a department store’s opt-out procedure lacked a “reasonable expectation that. . . she could effectively communicate . . . her request for revocation to [Defendant]” in the manner she chose. See Viggiano at *9. As it turns out, the D.C. Circuit adopts almost the precise reasoning as Viggiano in addressing the issue of reasonableness. As the ACA Int’l ruling puts it: “[i]f recipients are afforded [reasonable opt-out] options, any effort to sidestep the available methods in favor of idiosyncratic or imaginative revocation requests might well be seen as unreasonable.” ACA Int’l at 42. The decision goes on to emphasize the point: “The selection of an unconventional method of seeking revocation might also betray the absence of any ‘reasonable expectation’ by the consumer that she could ‘effectively communicate’ a revocation request in the chosen fashion.” Id.

It is worth noting that the D.C. Circuit reads the Omnibus as imposing a subjective standard on revocation methods vis-à-vis a caller’s belief that its chosen method is reasonable. This is exactly the approach taken by Viggiano and seems to make class certification of revocation classes even more difficult in the post-ACA Int’l world.

Another key piece of the ACA Int’l ruling on revocation involves the impact of the Omnibus on contractual revocation provisions. Or, more precisely, the lack of any such impact. As Dorsey’s TCPA team reported well over a year ago, the Panel’s conclusion that contractual revocation provisions would survive the Omnibus was never really in doubt following the oral argument. The FCC had conceded the issue away in its briefing and offered only the limpest of resistance to Petitioners’ arguments that contractual revocation provisions were unaddressed by the Omnibus. The D.C. Circuit accepted the Commission’s concession that the Omnibus did not address contractual revocation provisions and concluded: “The [Omnibus] ruling precludes unilateral imposition of revocation rules by callers; it does not address revocation rules mutually adopted by contracting parties.” ACA Int’l at 43. But hopefully you already knew that was coming. If not—as we asked in our previous articles—how fast can you get a revocation provision into your consumer contracts? The D.C. Circuit has spoken, now go!

One last word of caution: reasonableness remains the touchstone here. The D.C. Circuit’s ruling is clear that callers must make available “clearly-defined and easy-to-use opt-out methods” if they want a sturdy defense to revocation claims asserted outside of those channels. See ACA Int’l at 42. So maybe avoid a revocation paradigm requiring hand delivery of written revocation methods to your South Pole office.  Need help drafting? Dorsey’s team is always happy to help.

Divya Gupta

Divya Gupta

Divya Gupta is a commercial litigator Partner with one of the nation’s most knowledgeable Telephone Consumer Protection Act (TCPA) defense-teams. She is experienced in handling complex cases in state and federal courts, both in-house and as outside counsel. Divya is particularly skilled in defending banks, finance companies, and other lenders in both individual and class action TCPA cases. Divya also has experience advising major financial institutions on TCPA compliance matter and regarding the applicability of the TCPA to new and emerging products and services. Likewise, she is further adept in handling matters involving the Fair Credit Reporting Act (FCRA).

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