In Facebook Inc. v. Guerbuez EYB 2010-179965 (Quebec Sup.Ct.), the Quebec Superior Court enforced a decision from the US District Court, Northern District of California rendered on November 21, 2008. The decision ordered Adam Guerbuez and his company Atlantis Blue Capital to pay Facebook US$ 873,277,200 for having sent more than 4 million spam messages through its network in contravention of the US Controlling the Assault of Non-Solicited Pornography And Marketing Act of 2003 (“CAN-SPAM Act”).
Guerbuez, relying on Article 3155 of the Civil Code of Quebec, sought to prevent the enforcement of the California judgement on the ground that it was incompatible with public order as understood in international relations because of (a) the exaggerated amount of the damages awarded and (b) their punitive nature.
Neither Guerbuez nor Atlantis Blue Capital appeared before the California court nor did they attempt to respond to the proceedings served against them by Facebook.
Guerbuez argued that the California decision (Facebook claimed and was awarded US$436,638,600 against Guerbuez in addition to US$436,638,600 in punitive damages) should not be recognized in Quebec since a condemnation of that magnitude would never occur in Canada under its proposed anti-spam statute.
Guerbuez claimed that Bill C-27, the proposed Canadian anti-spam legislation Electronic Commerce Protection Act (“Bill C-27”) at the time would not yield the same draconian results as the CAN-SPAM Act.
Bill C-27 has since been replaced by Bill C-28, An Act to promote the efficiency and adaptability of the Canadian economy by regulating certain activities that discourage reliance on electronic means of carrying our commercial activities, and to amend the Canadian Radio-television and Telecommunications Commission Act, the Competition Act, the Personal Information Protection and Electronic Documents Act and the Telecommunications Act formerly known as the Fighting Internet Wireless Spam Act (“FISA”) . FISA has recently been approved by the Senate but has yet to be proclaimed in force. For a comprehensive overview of FISA we encourage you to read Bernice Karn’s article in this issue of The Cassels Brock Report.
The American CAN-SPAM Act provides that a court may order compensatory damages of $100 per violation in addition to punitive damages. Section 51 of Bill C-27 on the other hand, provided that the court may order a person to pay (a) a compensation in an amount equal to the actual loss or damage suffered or expenses incurred by the applicant and (b) up to $200 per contravention not exceeding US$ 1,000,000 for each day on which the contravention occurred.
The Quebec Superior Court was of the view that even though Bill C-27 provided for a cap of $1,000,000 per day, the damages that Canadian courts could award thereunder were similar to the damages US Courts could award under the CAN-SPAM Act.
The Quebec Superior Court followed the Supreme Court decision of Beals v. Saldanha, 3 S.C.R. 416, where it was held that Canadian courts should be reluctant to recognize defences based on public order when enforcing foreign judgements. In the Beals decision, Justice LeBel indicated that the fact that a foreign decision may provide for outrageously high damages does not constitute, in and of itself, sufficient ground for a court to disallow the enforcement of the judgement. Rather, one must look at the policies that underlie the laws pursuant to which the decision was rendered.
Applying the principles set out in the Beals decision the Quebec Superior Court found that the US government, through the CAN-SPAM Act, was pursuing policy objectives that were legitimate and similar to the objectives pursued by the Canadian government under Bill C-27. The main objective being the deterrence of reprehensible online conduct not only in Canada and the US, but elsewhere in the world. Furthermore, the Quebec Superior Court was of the view that, under both statutes, courts could award damages in a similar manner.
The Quebec Superior Court noted also that the California decision was rendered in light of Mr. Guerbuez’s intentional and repeated spamming practices and was not an arbitrary decision.
For all these reasons, the Quebec Superior Court was of the view that the California judgement was not incompatible with public order and decided to recognize and enforce it.
This decision demonstrates that Canadian Courts, as a matter of international courtesy, are reluctant to set aside foreign decisions unless there are important reasons for doing so. In this instance, because Bill C-27 and the CAN-SPAM Act were fairly similar both in purpose and result, the Quebec Superior Court found no legitimate basis not to enforce the California judgement. This decision is a reminder that spamming practices in North America can and will be severely prosecuted and people engaging in these practices cannot find shelter in Canada. Given the severity of the outcome in Guerbuez, we strongly encourage you to carefully review your online marketing practices to ensure they comply with both FISA, when it comes into force and the CAN-SPAM Act.