NOTICE OF APPLICATION
THE GROUNDS FOR THE APPLICATION ARE:
The Parties and the Transaction
4. Desjardins Group is the leading cooperative financial group in Canada.
5. State Farm operates businesses in property, casualty and life insurance, as well as mutual fund, loan and living benefits companies, in Canada.
6. Pursuant to the MTA, in January 2014 Desjardins agreed to acquire State Farm’s Canadian Business (as defined in the MTA), consisting of assets and liabilities in relation to
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State Farm’s Canadian-based insurance, mutual fund, loan and living benefits business (the “Canadian Business”).
7. Once the transaction closes in January 2015, Desjardins will own and operate the Canadian Business as a going concern. Desjardins will continue to provide insurance and financial services to existing Canadian Business customers as part of the transaction.
8. In order to enable Desjardins to provide uninterrupted insurance, financial and other important services to existing Canadian Business customers, State Farm must disclose the personal information of the Affected Persons to Desjardins. All such information is in relation to the Canadian Business.
9. An order recognizing the appropriateness of the applicants’ efforts to inform the Affected Persons of the proposed disclosure of their personal information, and thereby to establish their consent in compliance with PIPEDA, will serve the interests of the public, the current customers of the Canadian Business, and the Affected Persons, because it will facilitate the uninterrupted continuation of vital insurance and financial services by Desjardins.
The Legislation
10. The collection, use and disclosure of personal information in the private sector are governed by PIPEDA. PIPEDA defines “personal information” as “information about an identifiable individual, but does not include the name, title or business address or telephone number of an employee of an organization.”
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11. In subsection 4(1), PIPEDA states that the relevant part of the legislation “applies to every organization in respect of personal information that [an] organization collects, uses or discloses in the course of commercial activities”.
12. The information concerning the Affected Persons that the applicants propose that State Farm disclose to Desjardins is personal information that State Farm has collected and used in the course of commercial activities.
13. With certain exceptions, PIPEDA requires that the disclosure of personal information occur only with the knowledge and consent of the persons to whom the personal information relates.
14. Unlike substantially similar but more recent provincial legislation (Alberta’s Personal Information Protection Act, S.A. 2003, c. P-6.5, British Columbia’s Personal Information Protection Act, S.B.C. 2003, c. 63 and Manitoba’s recently amended Personal Information Protection and Identity Theft Prevention Act, C.C.S.M. c. P-33.7, which is not yet in force), and despite repeated attempts at amendment, PIPEDA still does not include as one of the permitted exceptions to the requirement for knowledge and consent for the disclosure of personal information in the context of a business transaction where the parties to the transaction have entered into an agreement under which the parties undertake to use and disclose the information only for those purposes for which the information was initially collected from or in respect of the individuals, and the information in issue relates to the carrying on of the business or activity for which the transaction took place.
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15. As a result, the applicants seek authorization permitting State Farm to disclose to Desjardins, and permitting Desjardins to use, the personal information of Affected Persons so that Desjardins may continue to provide services to existing Canadian Business customers and policyholders, without undue disruption, pursuant to the transaction contemplated by the MTA and in the ordinary course of business, all to the benefit of and in the best interests of customers and policyholders.
Notice to Affected Persons of the Proposed Disclosure
16. In January 2014, State Farm sent letters to approximately 1.2 million customers notifying them that Desjardins would be acquiring Canadian Business. In June 2014, State Farm sent a second letter to these customers informing them that it would be necessary for State Farm to disclose their personal information to Desjardins. Approximately 5,800 letters were returned to State Farm as undeliverable.
17. In March 2014, State Farm agents also sent 775,000 letters to State Farm customers, informing them of the transaction.
18. As a sign of good faith and to help ensure that all Affected Persons will have knowledge of the proposed disclosure of personal information, State Farm and Desjardins propose to publish the Legal Notice twice in the National Edition of the Globe and Mail newspaper, explaining in plain language the proposed disclosure of their personal information by State Farm to Desjardins for the purpose of the transaction.
19. The Legal Notice will also notify Affected Persons that they may object to the disclosure of their personal information by contacting State Farm’s Privacy Officer.
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20. Further, the applicants will make available to all Affected Persons for inspection a copy of the application materials, including the affidavits in support, at the office of State Farm as well as on State Farm’s website.
21. The applicants propose this course of action to notify Affected Persons because it would be impractical and commercially unreasonable to notify more than a million customers individually, particularly in the case of Affected Persons for whom State Farm does not have current and accurate contact information.
22. State Farm employees and agents who are being transferred to Desjardins under the MTA will have the opportunity to consent to the disclosure of their personal information as part of offers of new contracts with Desjardins.
23. The applicants therefore seek the approval of this Court (i) that the form of the proposed Legal Notice is sufficient for the purpose of providing knowledge to Affected Persons of the proposed disclosure of personal information covered by PIPEDA, and (ii) to publish such Notice twice in the National Edition of the Globe and Mail newspaper.
24. The relief sought herein is necessary to ensure Affected Persons have the required knowledge, as such term is employed in PIPEDA, of the disclosure of their personal information.
Consent of Affected Persons to the Disclosure of Personal Information
25. Based on the notification provided by the published Legal Notice and the direct letters to the Affected Persons, and so that Desjardins can operate the Canadian Business without undue disruption in the ordinary course, the applicants seek a declaration that the Affected Persons have
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the required knowledge, as such term is used in PIPEDA, and are thus deemed to have consented to the disclosure of their personal information by State Farm to Desjardins.
26. The relief sought herein is necessary to enable State Farm to lawfully disclose the personal information of Affected Persons to Desjardins and to enable Desjardins to use the personal information provided to it by State Farm to continue to provide insurance and financial services to those Affected Persons who are current State farm customers and so that Desjardins can operate the Canadian Business without undue disruption in the ordinary course.
27. Desjardins will use the personal information provided to it only in a manner consistent with State Farm’s prior use of the information.
28. Desjardins will implement and maintain appropriate safeguards, at least to the same extent provided by State Farm prior to the disclosure of the information to Desjardins, to protect the personal information in compliance with applicable privacy legislation.
Statutory Grounds
29. The applicants rely on Rules 14 and 38 of the Ontario Rules of Civil Procedure.
30. The applicants also rely on:
(a) the Personal Information Protection and Electronic Documents Act S.C. 2000, c. 5; and
(b) rules 14.05(3)(d), (g) and (h) and Rule 38 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194.
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31. The applicants will rely on such further grounds as counsel may advise and this Honourable Court may permit.
THE FOLLOWING AFFIDAVIT OR OTHER EVIDENCE will be used at the hearing of the application:
affidavit of Denis Dubois, Desjardins, sworn on October 9, 2014; and
affidavit of Peter Hanycz, State Farm, sworn on October 13 2014;
such further and other evidence as counsel may advise and this Honourable Court may permit.
If served outside Ontario without court order, list facts & provisions of Rule 17 to support service.
Date: October 15, 2014