Sovereign Immunity

• Author: International Law Group
• Pages: 56-58

Page 56

By way of limited background to the Ontario Court of Appeal's laconic opinion below, the Update presents excerpts from an FTC press release issued on June 22, 2005. "In July 2004, the Federal Trade Commission charged a group of Canadian defendants, that is Canada Inc., d/b/a Pinacle, Canada Inc, d/b/a M.D.S.C. Publishing and Terrence Croteau, with scamming small businesses and charities in the United States out of millions of dollars by billing them for business directory services they did not order or authorize, in violation of federal law. The FTC charged that the defendants refused consumers' requests to cancel the services, and used an in-house collections department to harass consumers whose accounts allegedly were past-due."

"An [Illinois federal court] ... granted the FTC's request for a Temporary Restraining Order and Preliminary Injunction in the case, barring the illegal practices and freezing the defendants' assets. ... On May 19, 2005, the Judge ... entered a final judgment in the Commission's case that permanently bans Croteau and his two companies from the business directory operation, bars deceptive or misleading claims, prohibits the defendants from trying to collect payment for listings in any business directory, bars them from selling or sharing their 'customer' lists and orders them to give up $2,931,568 in ill-gotten gains, including $55,083.76 that had previously been deposited into the Court's Registry."

Presumably in response to the FTC's actions, Croteau and his companies applied to an Ontario court of first instance for leave to serve the respondent FTC so as to seek some unspecified remedy. The judge held that applicant's service of notice of the application against the FTC was proper under the [Canadian] State Immunity Act (SIA ), R.S.C. 1985, c. S-18. The FTC appealed to the Ontario Court of Appeal mainly claiming error in this holding. That Court agrees with the FTC and allows the appeal.

"In our view, even if the letter enclosing the March 15, 2005 certificate delivered by the Department of Foreign Affairs and International Trade (the certificate) was not properly before the court, the certificate itself was admissible inPage 57 evidence under § 14 of the SIA . Moreover, assuming that the statement in the certificate that the respondent is an integral part of the government of the United States exceeded the scope of § 14 of the SIA, we conclude that there was no evidence in the record before the trial...