• Heavy Weight Showdown - State Farm Takes on Privacy Commissioner
  • April 28, 2010 | Author: K. Paige Backman
  • Law Firm: Aird & Berlis LLP - Toronto Office
  • It has all the makings of a great show-down. Two Goliaths, one from the private sector and one public sector. Large insurance company, State Farm Mutual Automobile Insurance Co. ("State Farm") takes on the Privacy Commissioner of Canada and Canada's federal private sector privacy legislation, PIPEDA. The claim is multifaceted, but takes on key issues for the application of PIPEDA that for the past decade has given rise to a new industry and a new way of life for businesses and consumers.

    State Farm is challenging the constitutionality of certain key elements of PIPEDA, a subset of such claim is that State Farm is seeking a restrictive (or more reasonable, depending on whose side you're on) meaning to the term "commercial activity." "Commercial activity" is a concept which really underpins the application of PIPEDA.

    The facts forming the basis of the claims are generally as follows (as framed by and noted in the New Brunswick Court of Appeal decision. While full names can be found in the relevant court documents and other reports on same, they have been redacted here):

    In March 2005, Ms. V, a State Farm insured, was involved in a motor vehicle accident with Mr. G. Subsequently, State Farm retained legal counsel in connection with anticipated litigation by Mr. G against Ms. V. State Farm also hired private investigators who conducted video surveillance on Mr. G.

    Pursuant to PIPEDA, Mr. G requested the personal information State Farm had compiled, including copies of the surveillance reports and tapes. State Farm denied the request, stating PIPEDA did not apply to any information it held regarding Mr. G. Subsequently, the Privacy Commissioner informed State Farm a complaint had been filed against it by Mr. G for failure to provide access to the requested documents. State Farm responded and stated that the Privacy Commissioner had no jurisdiction regarding the disclosure of surveillance information. In May 2007, the Privacy Commissioner responded to State Farm asserting its jurisdiction to investigate Mr. G's complaint.

    The overwhelming majority of companies understand and appreciate the need for privacy legislation and for protection of personal information. The challenge for many organizations is knowing to what activities PIPEDA does and does not apply. A cornerstone of PIPEDA is that the privacy regulations contained therein apply to organizations to the extent such organizations collect, use or disclose personal information in the course of commercial activities. Determining whether or not, or which, activities taking place in anticipation of and during the course of litigation are in the course of commercial activities is a little like running through fog at night.

    State Farm tried to have its challenge heard in the courts of New Brunswick, but the New Brunswick Court of Appeal held that the proper forum should be the Federal Court of Canada. Later this month, State Farm will have its say in front of the Federal Court of Canada.

    Perhaps not a fight of biblical proportions, but for those of us in this area, it's an anticipated battle among heavy-weights and there will be team of people from all industries and sectors cheering on both side.