Friday, October 20, 2017

CRTC finds CASL to be constitutional in CompuFinder challenge

On October 19, 2017, the CRTC issued its decision in a constitutional challenge to CASL brought by CompuFinder. You may recall that in 2015, the CRTC levied the largest penalty to date -- $1.1 million -- against CompuFinder. (My previous blog post.) The company challenged the constitutionality of the legislation, primarily on the grounds that it is ultra vires federal jurisdiction (outside of powers granted to the federal parliament under the constitution) and that it violated s. 2(b) of the Charter and could not be saved by s. 1.

For the non-lawyers out there, a law can violate Charter rights but can still be upheld if the infringement is justifiable using s. 1:

1. The Canadian Charter of Rights and Freedoms guarantees the rights and freedoms set out in it subject only to such reasonable limits prescribed by law as can be demonstrably justified in a free and democratic society.

The framework for s. 1 analysis set by the Supreme Court requires all of the following to be met for a limitation on a constitutionally-guaranteed right to be upheld:

1. The limit must be prescribed by law

2. There must be a pressing and substantial objective

3. The means must be proportional
a. The means must be rationally connected to the objective

b. There must be minimal impairment of rights

c. There must be proportionality between the infringement and objective

In my personal view, the decision is incorrect in a number of ways. I think the Commission suffered the same issue that plagues much of the discussion of CASL: the use of the word "spam" in its colloquial sense when the focus really needs to be on what the law really regulates: commercial electronic messages. It is comparing apples to oranges, and statistics like "spam is down in Canada" is only slightly useful in the discussion.

I think the Commission was dramatically wrong in finding that there was a minimal impairment of constitutional rights. This generally asks whether the restriction unduly limits speech or expression that is outside of the scope of the "pressing and substantial objective."

In its decision (Compliance and Enforcement Decision CRTC 2017-367 | CRTC), the CRTC agreed with the government regarding the law's objective:

108. The government’s objective in enacting CASL is revealed within the title of the Act: “to promote the efficiency and adaptability of the Canadian economy by regulating certain activities that discourage reliance on electronic means of carrying out commercial activities….”

109. The Act is clearly focused on e-commerce in Canada as a whole. This is expanded on in the objective clause of the Act (section 3).

110. In the Commission’s view, it is clear that the government’s objective is pressing and substantial. The factual evidence put forward by the Attorney General is detailed and convincingly supports this conclusion. There is an abundance of literature, analyses, reports, and statistical evidence that demonstrate the existence of spam and other electronic threats, the impact that they have on Canadian businesses and consumers, and how countries around the world have been compelled to introduce legislation to address these threats.

Note again the use of the word "spam". The law regulates and generally prohibits "commercial electronic message" and its main defect -- in my view -- is that it goes after "spam" by limiting legitimate expression that is not "spam" and that has little if anything to do with harming confidence in electronic commerce.

However, the Commission did not follow CompuFinder's argument that the law is not minimally impairing.

152. CompuFinder’s argument at this stage is essentially that CASL’s CEM prohibition regime is overbroad, capturing more forms of expression than are necessary to achieve the statute’s purpose.

153. The Attorney General did not directly respond to each specific allegation of the law’s overreach. Instead, its main response to the overbreadth arguments raised by CompuFinder is that the Act does not impose a total ban on the sending of CEMs. Persons wishing to send commercial messages are not barred from using the Internet or email to advertise. In addition, the exceptions and exemptions to the general prohibition contained in section 6 of CASL act as levers that further limit the infringement of freedom of expression.

154. The Commission notes that, as indicated by the Supreme Court in JTI-Macdonald Corp., when interpreting these exceptions and exemptions, specific words should not be considered in isolation; rather, the interpretation must be guided by Parliament’s objective and its global intention sought.

155. In the case of CASL, Parliament’s concern was to combat a multitude of electronic threats that could have deleterious effects on Canada’s e-economy, Canadian businesses, and Canadian Internet users. In pursuing its objectives, Parliament has deliberately narrowed, and empowered the Governor in Council to make regulations narrowing, the applicability of the Act to certain commercial activities (as defined in subsection 1(1) of the Act), and enacted a long series of exceptions, exclusions, and limitations to the application of prohibitions on the sending of CEMs.

156. Examples of these exceptions can be found in subsections 6(5) and 6(6) of CASL and in the provisions regarding excluded messages in section 3 of the Governor in Council regulations. As a result of these and other exceptions and exemptions, the prohibition in section 6 of CASL does not apply to numerous types of CEMs, including those sent by or on behalf of an individual who has a personal or family relationship with the recipient, those consisting of an inquiry relating to a commercial activity engaged in by the recipient, certain notice-giving or transactional messages, and certain intra-organizational and inter-organizational messages.

157. Further, given that, in cases of ambiguity, claims of overbreadth may be resolved by appropriate interpretation, where the application of these exceptions and exclusions are potentially ambiguous, and such ambiguity could potentially lead to overbreadth of the provisions in question, they must be interpreted in the manner that would result in the least possible intrusion upon protected expression, while also respecting the intention of Parliament.

158. Accordingly, the Commission agrees with the Attorney General that the expression limited by CASL is substantially lessened as a result of its exceptions and exemptions. These exceptions, when taken as a whole, significantly narrow the application of section 6 and, as a result, on a balance of probabilities, the impugned provisions do not impair free expression more than necessary to achieve the objectives of CASL. In these circumstances, the limitations on the sending of CEMs, are not unreasonable in light of their legislative purpose.

I disagree with this overall, but I am particularly concerned with what the Commission said in paragraph 157. It essentially said that the law can be made constitutional in some cases by erring on the side of a constitutional interpretation in the event of any ambiguity. That essentially says that the law can remain constitutional because the CRTC enforcement folks can interpret in a manner that scales back its overbreadth. I don't think I know anyone who practices in this area who thinks that the CRTC enforcement folks can be counted on to do that.

I remain of the view that CASL is overbroad and unduly limits protected expression that has nothing to do with protecting consumer confidence in e-commerce. The Commission's decision doesn't change my mind on that at all, and it will be interesting to see if this particular case goes any further.

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