Michigan Attorney General Bill Schuette filed a brief this week intervening in a federal lawsuit between a subscriber of Consumer Reports magazine and publisher Consumers Union of the United States (“Consumers Union”) to defend the constitutionality of the Michigan Preservation of Personal Privacy Act. The Act prohibits businesses “engaged in the business of selling at retail . . . books or other written materials” from disclosing customer information to third parties. The Act contains numerous exceptions, including allowing disclosure of customer data for the purpose of marketing directly to that customer where the customer has been given written notice and an opportunity to have her or his name removed.
This dispute arose when a subscriber to Consumer Reports magazine alleged in a class action lawsuit that Consumers Union was disclosing subscriber names and addresses to data mining companies and other third parties without providing proper notice and obtaining subscriber consent in violation of the Michigan Preservation of Personal Privacy Act. Consumers Union moved to dismiss the action on numerous grounds, including that the Act violates First Amendment free speech protections. The court adjudicating this suit allowed Attorney General Schuette to intervene on behalf of the plaintiff to defend the constitutionality of the Act.
A federal court must now decide whether the Act’s consumer privacy protections are a valid regulation of commercial speech and if the Act unacceptably prohibits a substantial amount of protected speech in relation to the law’s legitimate sweep.
Takeaway: Though the court has yet to rule, this suit reflects a modern trend of state and federal governments taking a stronger stand in protecting consumer privacy. This court’s decision will be important to help guide advertisers on the line between First Amendment speech and state laws protecting consumer privacy.