February 5 2010 - State Farm challenges application and constiutionality of PIPEDA
In 2003, the Quebec government began a constitutional challenge of the (PIPEDA). While that case has been all but abandoned, there is another potential challenge that has been brewing in New Brunswick over the past three years, which is a set to be heard by the Federal Court on April 13, 2010. This could be the first time a court is required to seriously consider the constitutional foundation upon which PIPEDA is based.
This case began with a common scenario in the insurance industry. In March 2005, Mr. G was involved in an accident with Ms. V, who was insured by State Farm. In anticipation of potential litigation arising out of the accident, State Farm began to conduct surveillance on Mr. G in the summer of 2005. Mr. G commenced legal proceedings against Ms. V in December 2005.
In November 2005, and again in January 2006, Mr. G made a request under section 9 of PIPEDA to obtain the information that had been collected about him. State Farm denied his request, arguing that PIPEDA does not apply because the information was not collected in the course of commercial activity. Mr. G complained to the Office of the Privacy Commissioner (OPC); however, State Farm refused to make representations, arguing that the OPC did not have jurisdiction to investigate.
In July 2007, State Farm applied to the New Brunswick Court of Queen's Bench for an order declaring that the OPC did not have jurisdiction to investigate this complaint.
A preliminary issue arose as to the most appropriate forum for where this case should be heard. While State Farm made its application to the New Brunswick Court of Queen's Bench, the OPC the brought a successful motion to have the application heard by the Federal Court. Both the New Brunswick Court of Queen's Bench and the Court of Appeal concluded that, while constitutional issues have been raised, this is primarily a case of judicial review, over which the Federal Court has jurisdiction.
While there are many interesting issues raised by this case, this article focuses on two main arguments that have been put before the Federal Court by State Farm. State Farm first and foremost argues that information collected by an individual (or their agent, in this case, an insurer) for the purposes of defending a lawsuit is not collected, used or disclosed in the course of commercial activities for the purposes of PIPEDA. Rather, defending litigation is a personal purpose.