Is circumventing "disclsoure" a distinction without a difference?

This article relates to the lawsuit that has been brought against Albertsons pharmacies (see Lawsuit: Privacy advocacy group sues drug store chain over alleged privacy concerns). The lawsuit alleges that Albertsons used pharmacy customers' personal information to send marketing communications. According to counsel for the plaintiffs, the way in which the communications were sent is irrelevant:

Albertsons Sued Over Customer-Data Privacy:

"'The specific California code provision that we're dealing with prohibits the pharmacy from selling, sharing, or otherwise using any medical information for any purpose,' Krinsk explains. 'The critical distinction that they make, that we believe is of no consequence, is they say that they don't sell the information. They claim that the process that they employ doesn't constitute selling or using of information. Rather than selling the names and addresses they instead either handle [the data] internally or handle some of it internally and then contract out to third-party administrators. We allege that's a distinction without a difference.' "

For us in Canada, this is not just an interesting read. The same sorts of practices take place all the time here in an effort to circumvent the "disclosure only with consent" requirements of PIPEDA. Many associations used to sell lists to third-parties for marketing purposes but are no longer able to do because they don't have the consent of the members to sell the list to the other organization. To get around this, the organization that wants to market to the members simply pays for the association to send the solicitation on their behaf. Presto, no disclosure. The prevailing opinion is that this fits within the letter of PIPEDA, but is it consistent with the spirit? Is it a distinction without a difference? The distinction is probably lost on members if they receive a mail solicitation apparently from the organization with which they have no pre-existing relationship, unless it really appears to come from the association. As of yet, we have no word from the Canadian Privacy Commissioner or the Federal Court about how this will be viewed.