CSA v. PSK First Mediation
May 2nd, 2021
Greetings. We’re awaiting three Court Rulings on various of the Canadian Standards Association (CSA / Civil Service) lawsuits. Yes, three of them. As we wait, here’s another amusing story from the eleven CSA negotiations we’ve, um, endured since they started all this stuff nearly ten years ago.
Until recently, all of these negotiations were privileged. That is, what took place during the meeting was confidential, not subject to public disclosure. As we’ve reported however, CSA recently waved privilege on all litigations. So we can spill the beans.
Welcome then, (sit down, get a coffee, do a line…) and enjoy the story of the first mediation between CSA and PS Knight.
Our first face-to-face dust-up was in 2012, in Calgary. The CSA flew out a full phalanx of folks from Mississauga. Kevin Sartorio was there (the CSA’s main outside counsel), and his associate, and Sarah Eisen (the airhead who’d filed the claim in the first place), and her associate came along as well, and the mediator of course, who’d flown in from Edmonton for the festivities, and my counsel, and myself. So yes, with all that travel and that many salaries going, it was a pricey meeting.
I sauntered into the main board room. Sauntering, mind you, not slinking; that’s for lawyers. I greeted the mediator, he was trying to take a read of me. As he did so, shaking my hand, looking intently at me, Sartorio approached from the side and handed the mediator a copy of PS Knight’s 1968 Electrical Code Simplified. Sartorio did this as ostentatiously as he could, making a show of it. You can see the 1968 book here, by the way.
Sartorio was trying to convey that he had me cornered, he’d done his research and found an original copy of our book, so there was nowhere for me to hide.
Mediation started. Within minutes, Sartorio referenced the 1968 book, arguing that it was obviously a residential guidebook. Keep in mind that CSA’s first lawsuit against us focussed on our Commercial & Industrial book. They were arguing that CSA had only ever contributed to our residential book, for they had always been opposed to our Commercial & Industrial book.
In this, and with his usual theatrics, Sartorio stated that any contribution that CSA may have given us in the past was restricted to a residential book (such as the 1968 book he was waving around) because, my friends, CSA had never, ever contributed “to a book for contractors.”
Calmly, we pointed out that the 1986 book he was holding was indeed for contractors. It said so.
Looking a bit incredulous; “Where?” said Sartorio.
“It says ‘For the Contractor.’ On the cover. At the top-left of the page. In bold.”
The mood soured somewhat at this disclosure.
Apparently CSA had, with difficulty, procured their 1968 copy (a rare book, indeed) from their colleagues at the Library of Parliament.
From then on, we mostly spent the day in separate rooms. That’s normal if the parties aren’t getting on well. The CSA wasn’t getting its way, wasn’t used to that, and wasn’t taking it well.
“There’s not a lot of goodwill over there,” warned the mediator. My side thought it best for health and wellness to not visit the CSA room.
The mediator did the Henry Kissinger routine of shuttle diplomacy, going back and forth between delegations, trying to reach some sort of middle ground. He had problems with this, as CSA’s understanding of the middle ground was rather different than ours. That, and they’d entered the room thinking they’d already cornered their adversary. Now that they hadn’t, their demands were no longer aligned with the newfound weakness of their position.
First, they demanded that PS Knight admit that we had violated the law by complying with the law. That is, we had obeyed Queen’s Printer Copyright and Federal Contract Law, so we needed to make amends for these offenses. The amends in question were, you know, piles of money.
We were supposed to pay them just over one million dollars. Nevermind that we didn’t have anything close to one million dollars! Just pay, they say.
Next, as readers know, PS Knight publishes a large Commercial & Industrial guidebook, priced at $127. This guidebook instructs on electrical laws and, in so doing, quotes from those laws. The CSA pointed out that public availability of this book held down the price they could demand for copies of electrical law itself (known as the Canadian Electrical Code). Naturally then, they demanded that we increase our prices by set rates in order to allow them to increase their prices.
This, folks, is illegal. It’s price fixing. Anyway….
As a fallback, CSA demanded that we pay them a royalty for the right to reference the law. Now, putting aside for a moment the absurdity of anyone demanding such a thing prior to Manson’s Law, the CSA wanted us to pay a royalty of $133 per book. Ponder that.
How does one pay $133 in royalty from a retail price of $127?
Also consider that books are sold at wholesale rates to distributors, such that the $133 royalty would actually apply to revenues much lower than $127.
This, my friends, is what RestoreCSA has oft referred to as CSA’s “mathematically impossible” demands.
“Oh no,” said CSA, it’s not impossible; “to pay the royalty, just increase your prices.” Oh, right. Can’t imagine why our side didn’t think of that.
The Civil Service doesn’t work in the real world, they function in an artificial environment where they can triple the price of their products overnight -and tripling the price is what we’d need to do- without affecting their sales. After all, the public has no choice but to deal with the government, right? But the public definitely does have the choice to deal with PS Knight or not.
Tripling our prices overnight would put us out of business overnight. They couldn’t relate to this.
By the way, to all those wondering; yes, the CSA’s demands are different at every negotiation. There’s only ever one consistent requirement….
The CSA demanded that any deal we made would be on a ten-year term. At the end of the term we’d have to negotiate for a new deal.
As noted previously, this demand was -and is- terminal to any agreement with CSA. Why so?
We’ve met quite a few people who signed similar deals with CSA and they all suffered badly as a result. Folks, when CSA signs a deal in “good faith,” it means something different to them than to the other party. To a civil servant, good faith is displayed in order to get what they want. If the deal turns out to be less than they wanted, breaking the deal is a good faith move.
I once had a phone call with a woman whose business had signed a contract with CSA just like the one they wanted me to sign. In her case, CSA breached the contract within a year of signing it, yet this woman lacked the resources to hold CSA accountable. Every year from then onward, CSA would unilaterally increase the royalties they charged her, so her cost kept climbing year after year. Adding insult to injury, they then demanded that she also pay for a CSA corporate membership, just to retain what was left of the contract CSA had already violated. Then, each year CSA increased the membership cost. By the time she called me, in tears throughout the call, the profits of her business were in CSA’s hands. She was left with the risk and the debts. It’s a bit like slavery.
You see, signing a deal with CSA is suicide unless that deal is both perpetual and enforceable.
Well, the mediator knew the absurdity of CSA’s cash and royalty demands. He delivered the CSA offer late in the day, with his head down, speaking slowly, knowing very well that the mediation couldn’t possibly succeed.
And it didn’t. We left the building at about 7pm, and we left first, on the suggestion of the mediator. Apparently the CSA room was worse than frosty by then and he didn’t want to risk a mingling at the elevators.
The irony of course, is that had CSA dropped their million-dollar demand and their mathematically impossible royalty demand and just learned to live and let live, they could’ve walked from that mediation with no more cost than a few hours of legal and some airfares. Instead, they’ve by now burned through millions of dollars in legal and, within a few months of that first mediation, the RestoreCSA site was launched, exposing the unexpectedly underhand conduct of what we now know to be a Civil Service Agency of the Canadian Government.
In hindsight, it was CSA’s Steve Smith moment. Now, if only CSA learned like Smith, worked like him, had his character, his integrity….