Written by Jim Schmidt

Is San Francisco-based Craigslist subject to a third-party production order in criminal proceedings in British Columbia, despite having only a “virtual” presence in the province? The province’s Court of Appeal said yes in a recent landmark ruling.

In British Columbia (Attorney General) v. Brecknell, 2018 BCCA 5, decided January 9, 2018, the B.C. Court of Appeal allowed an appeal by the Attorney General, thus granting police access to records and information relating to a posting on Craigslist.

The Craigslist posting was said to be connected to a criminal offence alleged to have been committed in a community in British Columbia. Two lower courts refused to issue the production order (sought under a provision in Canada’s Criminal Code) on varying grounds, including that Craigslist is a U.S. company with only a virtual presence in B.C. The Court of Appeal took a different approach.

The Court grappled with a number of difficult issues in reaching the result. Its reasons show why a new litigation landscape for international companies is emerging for the online world. Among the key statements made by the Court were these:

"The nature of its business allows Craigslist to conduct business in British Columbia without establishing any physical presence . . . Craigslist is present in British Columbia, in a very real sense, by virtue of the way in which it conducts its business."

"There is no question that there is a real and substantial connection between Craigslist and British Columbia arising from Craigslist’s virtual presence in British Columbia to conduct business. That real and substantial connection is sufficient to provide personal jurisdiction over Craigslist."

"In the Internet era it is formalistic and artificial to draw a distinction between physical and virtual presence . . . [Nothing turns on] whether the corporate person in the jurisdiction has a physical or only a virtual presence. To draw on and rely on such a distinction would defeat the purpose of the legislation and ignore the realities of modern day electronic commerce."

The Court of Appeal also relied on the recent Google v. Equustek litigation—which culminated in a June 2017 decision of the Supreme Court of Canada—for the proposition that any perceived difficulty in enforcing the production order should not deprive a court of jurisdiction to make the order. The case required Google to, on a worldwide basis, block access to websites that infringed Equustek’s intellectual property rights. See our previous blog about that case here.

A Decisive Approach

The Court of Appeal’s ruling on Craigslist and the SCC’s decision in Google v. Equustek show that a change is underway in Canadian law. Jurisdiction is being viewed differently in the context of large business organizations that may be virtually present in many countries at the same time. Where a company is physically based is no longer the key in determining whether it may be subject to Canada’s court procedures—as courts are showing an unwillingness to be sidelined by the legal formalities of the past.