Two lawyers and a law student were among seven plaintiffs who filed suit on Wednesday to block the North Carolina Department of Revenue from collecting detailed information about purchases state residents made through online retailer Amazon.com Inc.
The American Civil Liberties Union filed the complaint on their behalf in the U.S. District Court for the Western District of Washington and applied to intervene in a pending federal suit between Amazon and the state.
"We're surprised and disappointed that it has become necessary to intervene in this lawsuit," said Jennifer Rudinger, executive director of the ACLU of North Carolina. "We feel the need to step in here and protect customers' privacy and First Amendment rights."
The complaint stems from the state's attempts to collect sales tax on items sold online. The ACLU's complaint alleges that the sales information the state has requested infringed the privacy of buyers by disclosing their names and detailed information about what they purchased.
State Revenue Secretary Kenneth Lay said that the department's legal counsel was reviewing the ACLU's motion, although he denied that the agency seeks overly detailed consumer information.
"The Department has stated in the past and reiterates that at no time has [it] asked for book or CD titles because that information is not needed to assess tax owed to the state," Lay said in a written statement. "We ask only for product type in order to determine the correct tax liability."
Amazon has turned over product codes of purchased items to the state for auditing purposes, but has resisted turning over customer names and addresses.
The ACLU complaint lists six anonymous plaintiffs who have purchased items on Amazon.com and a seventh named plaintiff, Cecil Bothwell, who owns a bookstore and is a city councilman in Ashville, N.C.
Among the anonymous plaintiffs is the general counsel of a global company who purchased "books with overt leanings," including Michael Moore's "Dude, Where's My Country" and Al Franken's "Lies and the Lying Liars Who Tell Them: A Fair and Balanced Look at the Right," according to the complaint. Other plaintiffs include a retired lawyer and a law student who hopes to work in the public sector. The student fears her ability to get a job in legislative or public policy will be hindered if her Amazon purchases are made public. She has purchased Jason Materra's "Obama Zombies: How The Liberal Machine Brainwashed My Generation" and Thomas E. Woods Jr.'s "Who Killed The Constitution? The Federal Government vs. American Liberty From World War I to Barack Obama."
"What a person chooses to purchase on Amazon reveals personal, private and profoundly intimate information about that person's life and identity," the complaint reads. "For example, an individual's purchase history can provide details about his or her political or religious beliefs, organizations or groups he or she associates with, who his or her friends or family are, and whether he or she has any medical, psychological or family problems."
The ACLU decided to intervene after the state did not comply with a letter requesting that it destroy or send back the product codes that Amazon has provided and commit in writing to not collect sensitive personal information about customers, Rudinger said.
Sales tax revenue is at the heart of the larger dispute, with North Carolina expected to lose nearly $162 million in sales tax revenue from online purchases, according to a University of Tennessee estimate. Amazon doesn't collect the state's 5.75 percent sales tax because the company doesn't have warehouses or offices in North Carolina. The responsibility to pay the tax lies with the buyer.
The state requested sales information from Amazon in 2009. The company sent some information and was asked for additional data earlier this year. In April, Amazon filed a lawsuit against the state seeking to keep client information confidential.
The ACLU is not interested in getting involved in the tax dispute between online retailers and the state, Rudinger said, but wants to ensure that consumer privacy is protected. According to the complaint, the ACLU plaintiffs seek broader relief than Amazon does -- they also want to stop the state from collecting similar information from other online.
"It's a huge concern that other companies have already provided North Carolina with this information," said Aden Fine, an attorney the ACLU's Speech, Privacy and Technology Project. "Most companies don't have the resources and desire to fight something like this as Amazon has."