Dwyer v. American Express Co.
273 Ill. App. 3d 742, 652 N.E.2d 1351, 210 Ill. Dec. 375 (1995)
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Rule of Law:
A company does not commit an invasion of privacy by compiling and renting mailing lists based on its customers' voluntarily provided transaction data, nor does it violate consumer fraud laws if the only alleged damage from its failure to disclose this practice is the receipt of unwanted mail.
Facts:
- American Express Company analyzed its cardholders' spending habits, including where they shopped and how much they spent.
- Based on this analysis, American Express categorized cardholders into tiers with labels such as 'Rodeo Drive Chic' or into groups based on purchasing specific items like 'fine jewelry' or 'luxury European car owners'.
- American Express rented these categorized lists, which included cardholder names and addresses, to merchants for targeted marketing programs.
- Merchants used these lists to mail special promotions and advertisements to cardholders identified as likely to be interested in their products or services.
- American Express also engaged in joint-marketing ventures where it would mail promotions on behalf of merchants to its cardholders and share in the profits.
- Patrick E. Dwyer and Maria Teresa Rojas were American Express cardholders whose personal spending information was subject to these practices.
Procedural Posture:
- Patrick E. Dwyer filed a class action lawsuit against American Express in the circuit court.
- Maria Teresa Rojas filed a separate but similar class action lawsuit against the same defendants.
- The circuit court (trial court) consolidated the two actions.
- Plaintiffs moved to certify the class and for leave to file an amended, consolidated complaint.
- Defendants filed a motion to dismiss the plaintiffs' claims for failure to state a cause of action.
- The circuit court granted the defendants' motion to dismiss and denied the plaintiffs' motions as moot.
- The plaintiffs (appellants) appealed the circuit court's dismissal to the Illinois Appellate Court.
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Issue:
Does a credit card company's practice of compiling and renting its cardholders' spending data to merchants for targeted marketing, without the cardholders' explicit consent, constitute an invasion of privacy or a violation of the Illinois Consumer Fraud Act?
Opinions:
Majority - Justice Buckley
No. The company's practice does not constitute an invasion of privacy or a violation of the Illinois Consumer Fraud Act under these circumstances. For the intrusion upon seclusion claim, the court held that cardholders voluntarily give their spending information to the company by using its card; therefore, the company's compilation and use of its own records is not an 'unauthorized intrusion.' The court found this practice analogous to the legal sale of magazine subscription lists. For the appropriation claim, the court reasoned that an individual cardholder's name has no intrinsic value to the company; value is created only by aggregating and categorizing thousands of names. The practice does not deprive cardholders of the value of their identity. Regarding the consumer fraud claim, while the company's failure to disclose its practice might be deceptive, the plaintiffs failed to allege any actual damages, as receiving unwanted mail does not constitute a legally cognizable harm under the statute.
Analysis:
This decision represents an early judicial assessment of commercial data mining and privacy rights, setting a significant precedent that favors corporate use of consumer data. By concluding that information voluntarily provided during a transaction is not subject to a claim of 'intrusion upon seclusion,' the court established a high barrier for such privacy torts in the context of a customer-business relationship. Furthermore, its narrow interpretation of 'damages' under the consumer fraud statute makes it difficult for plaintiffs to succeed in cases based on undisclosed data sharing, requiring them to demonstrate tangible financial harm rather than mere annoyance or privacy loss. This ruling has influenced subsequent cases by reinforcing the idea that the use of voluntarily-provided data for marketing does not, without more, create a cause of action.
