Distribution list expansion failed. There was a problem when communicating with the web service. Expanding the distribution ...

Distribution list expansion failed.

There was a problem when communicating with the web service. Expanding the distribution list with address '%1' failed because the following exception was thrown:
Exception: %2
Inner Exception: %3

Cause: The IIS machine hosting the web service may not be running or is inaccessible.
Resolution:
Make sure the IIS machine is accessible.