June 9, 2020 - Private Sector

Constitutional Challenge to CASL Dismissed by Federal Court of Appeal

The Federal Court of Appeal has dismissed a constitutional challenge to Canada’s Anti-Spam Legislation (CASL) brought by CompuFinder in the first detailed judicial consideration of CASL.

The Court also dismissed CompuFinder’s appeal of the CRTC’s decision that the company violated CASL when it sent 317 electronic messages to promote its educational and training services without consent and without a functioning unsubscribe mechanism.

CompuFinder received much attention in 2015 when it received the first Notice of Violation issued under CASL for $1.1 million (which was subsequently reduced by the CRTC to $200,000). In its decision, the Federal Court of Appeal found that the CRTC did not err in its application of certain business-to-business exceptions to CASL's consent and message form and content requirements. Key takeaways include the following:

  • When relying on the business relationship exemption under CASL, the Court agreed with the CRTC that a contractual relationship with only a few employees for a very limited number of transactions (single training session for one or two of the organization’s employees) will not constitute a “relationship” for the purpose of the business-to-business exemption.
  • The evidentiary requirements for establishing a “relationship” for the purposes of the business-to-business exemption should be more demanding than that required to establish an “existing business relationship”.
  • When relying on the “conspicuously published” implied consent provision under CASL, recording the recipient’s job title alone may not be enough to establish that the message is relevant to the recipient’s “business, role, functions or duties in a business or official capacity”. This needs to be assessed on a case-by-case basis.
  • Organizations seeking to rely on the conspicuous publication provision should be prepared to explicitly state the business, role, functions or duties of the recipient, and the relevance of the message to that business role, function or duty.
  • The CRTC was not clearly wrong in determining that the presence of two unsubscribe mechanisms in a commercial electronic message (only one of which is functional) gives rise to obscurity and creates confusion, and therefore fails to meet the requirement under CASL for the unsubscribe mechanism to be set out “clearly and prominently”.

We will be discussing this decision in more detail on AccessPrivacy’s June Monthly Call, to be held on Thursday, June 25, 2020, at 11:30 a.m. Eastern Daylight Time.