Burr & Forman

02.23.2017   |   Blog Articles, Consumer Finance Litigation, Ninth Circuit

Ninth Circuit: Redefining the Reach of Spokeo, and “Effective Consent” under the TCPA

The Ninth Circuit Court of Appeals recently held that, for purposes of the Telephone Consumer Protection Act of 1991 (TCPA), the scope of a consumer’s consent depends on the transactional context in which it is given. Van Patten v. Vertical Fitness Group, LLC, Case No. 14-55980 (9th Cir. Jan. 30, 2017). Specifically, the court concluded that an “effective consent” is one that relates to the same subject matter for which the calls or text messages are being made. The court further established that while a consumer does have the ability to revoke consent, the revocation must clearly express that he or she does not want to receive the communications in order to be valid.

The facts of the Van Patten case follow the course of a typical TCPA claim. Van Patten provided his contact information to Gold’s Gym on a membership agreement, which he signed. After cancellation of his membership, Vertical Fitness, the owners of that Gold’s Gym franchise, sent him numerous text messages inviting him to return. Van Patten alleged that he did not give express consent for text messages to be sent to his cellphone, and even if he had, he effectively revoked that consent by cancelling his membership to the gym.

The court first tackled the issue of standing, distinguishing the Supreme Court’s recent Spokeo decision, where it held that Article III standing requires a concrete injury despite the existence of a statutory violation. Spokeo Inc. v. Robins, 136 S. Ct. 1540 (2016). The court clarified that while like in Spokeo, a violation of the Fair Credit Reporting Act (FCRA) may not cause actual harm or present any material risk of harm, a violation of the TCPA is a concrete, de facto injury. The court further indicated that “unsolicited telemarketing phone calls or text messages, by their very nature, invade the privacy and disturb the solitude of their recipients.” As such, the court diverged from Spokeo, and held that Van Patten alleged a concrete injury sufficient to confer Article III standing.

Van Patten’s next hurdle came in the form of prior express consent. The court’s construal of prior express consent harmonized the FCC’s interpretation, that “persons who knowingly release their phone numbers have in effect given their invitation or permission to be called at the number which they have given,” with the TCPA’s purpose, of “prohibiting the use of automatic dialing to communicate with others in a way that amounts to an invasion of privacy.” The resulting standard emerging from the Ninth Circuit is that consent must be considered to relate to the type of transaction that evoked it – in essence, that by providing his or her telephone number the consumer does not consent to any and all contact. Nonetheless, the court sided with the defendant, stating that by providing his cell phone number for the purpose of a gym membership contract, Van Patten gave consent to be contacted about related matters, such as an invitation to “come back” and reactivate his gym membership.

Finally, the court rejected Van Patten’s claim that he revoked his consent when he cancelled the gym membership. While emphasizing that revocation is in fact possible and consistent with the purposes of the TCPA, the court added that revocation must be clearly expressed to be valid. Van Patten never asked the defendant to cease contacting him nor replied “STOP” to the text messages sent to his phone. As such, the Ninth Circuit upheld the lower court’s grant of summary judgment for the defendant.

While this decision seems to be a step back from Spokeo for defendants inundated by TCPA claims by stretching standing to all cases involving TCPA statutory violations, there may be exceptions to be carved out where a consumer does not receive a call or other similar circumstances. Further, while the Ninth Circuit’s interpretation of “effective consent” is narrower than it had previously been, its application is not. Even more beneficial to defendants is the court’s clarification that the requirements for revocation of consent are not as relaxed as they appear.

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