Could that possibly be an incorrect email id?

No, the email to that individual sent no problem when I removed him from the mailing list and sent him an individual email. The problem occurs when using mailing list after I add new participants. I am thinking Thunderbird has some sort of limit to the number of contacts.

@kennedype

It's not Thunderbird that generates the message, it's the mail server (read your own screenshot, that's what is says). I think that AUP means 'Appropriate Usage Policy': mail servers are often very touchy to mass mail sending because it looks very much like spamming done possibly by a computer owned by a virus. You can't do much about that, it is a limitation of consumer mail services, they are provided for casual mail use, any marketing use (or even looking as marketing) is heavily discouraged.

When you compose the message, put your own address in the To: box and then enter the list or contacts in the Cc: or Bcc: box.