CANADA—Court of Appeals finds against commissioners in license plate case
By John Jager, CIPP/C
On March 28, the Court of Appeal of Alberta issued a controversial decision in the case of Leon’s Furniture Limited v. Alberta (Information and Privacy Commissioner).
Leon’s had appealed a judicial review that found in favour of the commissioner; i.e., that the adjudicator’s decision in Order P2008-004—Leon's Furniture Ltd. was reasonable. The order had determined that the recording of driver’s license numbers and license plate numbers of customers picking up merchandise was not necessary or reasonably connected to the stated purpose; i.e., to prevent fraud.
The order was consistent with the "Guide for Retailers" issued jointly by the offices of the privacy commissioners of Canada, Alberta and British Columbia in April 2009. In Rule No. 1, the guide notes that “a driver’s license is not a universal identity card. It is a way for drivers to show they are authorized to operate a motor vehicle and for authorities to enforce traffic laws.” Rule No. 3 of the guide notes that retailers can satisfy most of their information needs simply by examining a driver’s license and that recording the licensee’s name and perhaps the address from the card may also be appropriate; however, it is generally considered excessive and unjustified to record the number from the license, or to swipe, photocopy or otherwise reproduce the card.
The Court of Appeal found the decision of the adjudicator was unreasonable. It noted that the Personal Information Protection Act (PIPA) requires that information be used in a “reasonable manner” and found that the approach of the adjudicator did not accord with PIPA. While the adjudicator found that individuals’ right to privacy is paramount to an organization’s need to collect information, the Court of Appeal found that it was not reasonably possible to interpret section three of PIPA as saying one of the values is paramount over the other, and where the adjudicator determined that the same goal; i.e., of preventing fraud, may be accomplished in other, less privacy-invasive ways and that as a rule of thumb, organizations should collect the least amount of PI possible to satisfy legitimate business activity, the court noted that PIPA does not require the organization to prove it has adopted a “minimalist” approach to the collection of data, only that it has acted reasonably. In contrast to Rule No. 1 in the "Guide to Retailers" discussed above, the court noted that many Albertans rely on their driver's licenses on a daily basis to prove who they are for various legitimate reasons; i.e., the average Albertan uses his or her driver's licence far more frequently to prove identity than to prove the right to drive.
The court also found that a reasonable person would regard the appellant's practices as being reasonably necessary in the circumstances. As the court noted, merchandise cannot be delivered to the right person if it has already been delivered to the wrong person; therefore, this makes the prevention of delivery to the wrong person strictly and literally "necessary" to supply the product or service to the right person.
Finally, the Court of Appeal determined that the adjudicator’s conclusion that it was reasonable to check identification but not to record the number would not be considered appropriate by reasonable people as any large organization needs to keep records for information to be of any use. It supported that determination by noting that the personnel on the loading dock perform many identification checks every month—it would be unrealistic to think that they can remember one customer from the other—and that without a record of the number, personnel would be unable to provide any useful information to the police investigating a fraud—having the license plate number would be valuable information for the police in tracing the culprit and as section 17(d) of PIPA authorizes the use of personal information for the purposes of an investigation or a legal proceeding, implicitly the company must be able to collect it.
In a dissenting opinion, Honourable Madam Justice Conrad found that the adjudicator did not fail to balance the interests set out in section three of PIPA. The balancing of those interests takes place not in any overarching procedure, but in the application of the rest of the statute, and she determined that the adjudicator’s decision that Leon’s breached sections 11(2) and 7(2) of PIPA was reasonable; therefore, this ground of appeal must be dismissed.
As the recording of driver’s license numbers occurs in other business processes; e.g., during returns of merchandise—see Alberta Report of an Investigation into the Collection and Retention of Personal Information: Rick Arsenault Enterprises Inc., and Ken Rice Retailing Inc.—and the underlying arguments of the Court of Appeal have potential broader application, it seems inevitable that the commissioner will appeal this decision. In the meantime, it would be prudent for organizations to maintain policies and practices consistent with the privacy commissioners’ guidelines.
John Jager, CIPP/C, is vice president of research services at Nymity, Inc., which offers Web-based privacy support to help organizations control their privacy risk. He can be reached at firstname.lastname@example.org.