A Lawyer’s Letter to Santa

Mr. Santa Claus

1 Reindeer Way

North Pole

H0H 0H0

Dear Santa:

As year-end approaches, we are writing to provide you with a brief summary of some of the legal issues that arose on the Risk Management side (pertaining to your North Pole operations in 2005).

As you are aware, our largest single challenge this year was a class action lawsuit brought against the workshop by a prominent litigation firm. The Statement of Claim alleged price fixing in relation to the distribution of toys and gifts in Canada. It claimed that your operations contravened Section 45(1) of Part VI of the Competition Act, giving rise to damages.

The class action alleged the defendants (you and Mrs. Claus) were liable for “tortiuous conspiracy, intentional interference with economic interests and punitive damages.” The proposed class was comprised of the direct purchasers of toys and presents during the relevant period, along with intermediate purchasers and ultimate consumers.

The implications of the potential certification of this class were enormous. At the present time in Canada, there are more than 32 million citizens; an appreciable number of them are under the age of majority. By best estimates, the proposed class could have involved 8 million children – both naughty and nice – from coast to coast.

We are pleased to report the action was subsequently dismissed following an Application for Determination of a Point of Law. The plaintiffs’ lawyer was apparently unaware that the toys and presents distributed by your operations were not subject to any profit or remuneration but rather were distributed free to deserving children.

Without the component of financial compensation, the allegations of price fixing and conspiracy could not be made out. The court held there was no possibility of success.

Although this class action had an advantageous resolution, it represented the single largest threat to your operations since our unpleasant encounter with “the Grinch” some 40 years ago.

We have been put on notice of a second potential class action – this one on behalf of homeowners who claim that your obligatory sleigh landings have damaged their roofs and tiles. To date, the plaintiff’s counsel has not been able to secure a sufficient number of homeowners to have any hope of certification.

On other fronts, we dealt with our first challenge to the issues of “use or operation” of the sleigh for the purposes of the Insurance Act. Following the 1998 decision of Ontario Court of Appeal in Morton v. Rabito, we felt confident that a magical sleigh would not fall within the definition of “automobile” either in its ordinary meaning or within some enlarged definition of that term found in the insurance policy.

Section 1 of the Insurance Act does provide that an automobile can include a self-propelled vehicle. Our argument has been that a magic sleigh is not a “self propelled vehicle” within the meaning of that definition, in view of the fact that a team of at least eight tiny reindeer are required to get it off the ground and pull it from house to house.

The Insurance Acts holds that the act is inapplicable to “a contract providing insurance in respect of automobile not required to be registered under the Highway Traffic Act unless it is insured under a contract evidenced by a form of policy approved under this part.” Magic sleighs are not yet required to be registered under the Highway Traffic Act. Accordingly, we do not believe that the Insurance Act should apply.

We anticipate the same argument would relate to the operation of the Motorized Snow Vehicles Act, in view of the fact that the sleigh does not use any known “internal combustion device” that could be categorized as a motor.

We have also been dealing with the Workers Compensation Board (WCB) concerning the proper categorization of your operation. You have always been a compliant employer under Schedule 1 because you run a manufacturing facility. Some Workers Compensation schemes now dictate that retail workers are subject to compulsory enrolment, as well.

The WBC has written to us questioning the status of “Santa’s Little Helpers” as shown on TV. If these retail workers were deemed to be employed by your operation, you would owe premiums for them as well.

We have explained that notwithstanding television advertising, you do not distribute your toys or presents through any commercial retailer. The workers who are depicted dressed up as elves or acting as your helpers are, in fact, actors hired to play a role rather than real employees.

We know you have a longstanding policy about not suing businesses that use your likeness without authorization. We must caution that the type of confusion we saw in the TV incident described above invariably results from failure to enforce your trademarks and business style. It is a very good thing for all of the parties involved (including Coca Cola) that you are still a “right jolly old elf” and not prone to retaliatory litigation.

As a final note on Workers Compensation, we have also been dealing with inquiries about the Occupational Health and Safety Regulations that specify lower temperature limits for work performed inside buildings that are normally heated. As you are aware from our previous memo, the Treasury Board Secretariat of Canada takes a strict view of thermal conditions in office accommodations. “An unsatisfactory condition is deemed to exist… when the air temperature falls below 17 degrees Celsius. In these cases, operation shall be stopped and employees released from the work place if the location is not practicable.”

Since the temperatures at the North Pole are admittedly brisk (averaging -34 C), a strict enforcement of the Workers Compensation Guidelines would see the elves working only 25% of their work details and resting 75% of the time. The proposed work break schedule applies to any four hour period with moderate or heavy activity.

We always encounter difficulties explaining the differences between elf and human physiognomy. While human workers find the temperatures at the North Pole facilities to be unbearably frigid, elves have traditionally settled in this region because of their extraordinary tolerance for cold temperatures.

We may be required to provide the Workers Compensation Board with expert evidence with regards to the extreme temperature tolerance of your work force.

We should also draw your attention to a recent civil action brought by a certain adolescent in Scarborough, Ontario. As you are aware, this clever lad had sued, alleging personal injuries including “discrimination, mental anguish, shock and humiliation” arising out of the discovery of a “lump of coal” in his stocking on Christmas morning, 2004.

The Plaintiff alleged he suffered these injuries when he found bituminous coal in his stocking rather than the expected present. There was also a vague allegation that he had been defamed by being placed on the “naughty list,” which is customarily reserved for children who have failed to obey their parents.

Fortunately, your insurance policy contains a “Personal Injury Extension Endorsement,” which provides additional coverage for personal injury liability except in such jurisdictions where such insurance is held to violate public policy.

(You will recall that there was a secondary issue of how long you are allowed to maintain records of your “naughty list” under the Personal Information Protection and Electronics Documents Act.)

Fortunately, the action came to a quick resolution when your records confirmed that the expected present had been delivered and “placed in the stocking with care,” as is your usual policy. It now appears that a younger sibling crept downstairs surreptitiously between the hours of 3 and 5 in the morning and removed the original present. They replaced it with a lump of coal that they had secured elsewhere, attempting to place the blame on you.

We confirm your instructions to agree to a dismissal of the action without c osts. Once again you are much more indulgent of these vexatious lawsuits than we would be in similar circumstances.

We have been advised that the plaintiff’s family intends to leave additional milk and cookies out for you as a gesture of apology for the inconvenience caused by the lawsuit.

Another unfortunate trend in American jurisprudence includes recent lawsuits by female Santa impersonators alleging that they have been discriminated against because department stores only hire white, middle-aged males. Some states (such as Kentucky) have upheld the right of Wal-Mart stores not to employ female Santa Clauses on the basis that it might cause gender confusion in children.

In Canada, Section 15 of the Charter of Rights and Freedoms (Equality Rights) and provincial human rights legislation deal with issues of gender discrimination. We have written to the Government of Kentucky on your behalf expressing your strong distress that your good name is being associated with discriminatory actions of any sort or description.

We have forwarded the usual correspondence to your accountants warranting that as of December 24, 2005, we are not aware of any outstanding litigation or potential claims.We look forward to speaking with you further and trust that you will have a very Merry Christmas and a Happy New Year. Please give our very warmest regards to everyone at the Pole.