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Class Actions - Interjurisdictional. Sanis Health Inc. v. British Columbia
In Sanis Health Inc. v. British Columbia (SCC, 2024) the Supreme Court of Canada dismissed an appeal, that against a BCCA decision dismissing an appeal, that of a dismissal by the BC Superior Court of an application by the corporate defendants in a consumer opioid damages class action, who sought an interlocutory division-of-powers ultra vires declaration against a class-action-supporting BC statutory provision [the 'Opioid Damages and Health Care Costs Recovery Act, s.11'].
These passages are quite interesting for the isolation of the Crown's private 'litigation autonomy', when it acts as a 'natural person' - and from a number of other perspectives (eg. cabinet, legislature, crown plaintiff litigation, delegated legislation, interjurisdictional class actions and the pressing - though rarely acknowledged - issues of both Canadian and international cross-jurisdictional problems:(2) Does Section 11 Respect the Legislative Sovereignty of Other Canadian Governments?
[95] The appellants argue that s. 11 fails to respect the legislative sovereignty of other Canadian governments by forcing them to either opt out of the proceeding, or else opt in and fetter their sovereignty by giving away their ability to legislate regarding their substantive opioid-related healthcare cost recovery rights or their litigation autonomy over those rights. They say that the support of the other governments for this legislation is irrelevant.
[96] As I have explained, the appellants’ concerns about the binding effects on another province’s litigation autonomy does not undermine its sovereignty. Litigation involves consequences and those consequences may be inescapable, especially when they occur in jurisdictions beyond the control of a government’s legislature. There is no constitutional principle against this. The appellants’ arguments blur the distinction between legislative and executive authority. The legislature of one level of government cannot transfer its primary authority to legislate to another level of government (Reference re Pan-Canadian Securities Regulation, at paras. 75-76). However, no such rule applies to the executive delegation of litigation conduct.
[97] Of course, a government cannot displace existing laws through executive action and the “legislature is entitled to enact legislation inconsistent with the government’s commitments under a prior agreement” (Canada (Attorney General) v. British Columbia Investment Management Corp., 2019 SCC 63, [2019] 4 S.C.R. 559, at para. 92). Thus, as a general constitutional principle, neither the executive, nor the legislature itself, can bind a future legislature in its exercise of authority (Reference re Pan-Canadian Securities Regulation, at paras. 54-59; Wells v. Newfoundland, 1999 CanLII 657 (SCC), [1999] 3 S.C.R. 199, at para. 37; Reference re Canada Assistance Plan (B.C.), 1991 CanLII 74 (SCC), [1991] 2 S.C.R. 525, at p. 560).
[98] But this general principle hits its limit when a Crown exercises its civil rights, in its capacity as a natural person, in areas where its legislature has no authority to enact laws. Aside from effects on a Crown’s desire to litigate as they wish in foreign territory, when Crowns act in their capacity as a natural person in other jurisdictions they may also have to accept legal consequences that fall outside their legislative competence, such as the creation of private rights and duties in other provinces. For example, when a Crown enters into a contract in another province, that contract will fall under the legislative competence of that other province’s authority over “Property and Civil Rights in the Province” (s. 92(13) of the Constitution Act, 1867). The contracting Crown’s legislature could not enact a law to cancel those extra-provincial contractual rights, and it will be bound by that contractual obligation in the same way as an individual (see Churchill Falls, at pp. 332-33; see also Bank of Montreal v. Attorney General (Quebec), 1978 CanLII 173 (SCC), [1979] 1 S.C.R. 565, at p. 574).
[99] So when a Crown exercises the same civil rights as an individual, it will be bound by the consequences of its actions undertaken in another province when those actions fall under that other province’s legislative sovereignty. Despite being sovereign in its own territory over these subject matters, a Crown cannot legislate itself out of situations it might have controlled at home. Nothing forces one province to engage in activities elsewhere, but when they do, they must abide by the laws of that other province (see D. Gibson, “Interjurisdictional Immunity in Canadian Federalism” (1969), 47 Can. Bar Rev. 40, at p. 60; Hogg and Wright, at § 10:20).
[100] This is the case when a Crown exercises its civil rights by participating as a non-representative plaintiff in a class action in another province. It will find itself subject to that province’s procedural rules governing class actions, including procedural rules relating to the binding nature of the court’s judgments or any settlements negotiated by the parties (CPA, ss. 26 and 35).
[101] However, the application of those procedural rules to the foreign, participating Crowns does not determine which substantive laws will apply to those Crowns (see Wilson, at para. 83; Thorpe, at para. 135; Walker, at § 4.03). Here, the harms underlying each Crown’s causes of action occurred in their own jurisdictions and thus are subject to their own substantive law (see Tolofson v. Jensen, 1994 CanLII 44 (SCC), [1994] 3 S.C.R. 1022, at pp. 1050 and 1064-65; Unifund Assurance Co. v. Insurance Corp. of British Columbia, 2003 SCC 40, [2003] 2 S.C.R. 63, at paras. 25 and 80; Van Breda, at para. 37; Walker, at § 1.02[2][e]). That substantive law remains subject to each legislature’s sovereignty, including their own ORA-type legislation to establish their causes of action.
[102] I also do not agree that s. 11 fails to respect the sovereignty of other governments because of the potential for overlap and conflict between their various ORA-type statutes and the litigation they authorize. Multi-jurisdictional legislative overlap is normal in a federation; so long as it occurs within the proper legislative authority of the enacting governments, it is not problematic (see Canada (Attorney General) v. PHS Community Services Society, 2011 SCC 44, [2011] 3 S.C.R. 134, at para. 62; Canadian Western Bank, at paras. 36-37). Multi-Crown participation in a national class action, where each is authorized by its own law, represents cooperation between different governments and comity between the courts.
[103] Intergovernmental cooperation in Canada recognizes that some amount of overlap is inevitable regarding national issues like the opioid epidemic, and that “governments should be permitted to legislate for their own valid purposes in these areas of overlap” (PHS Community Services Society, at para. 62). While the courts remain the ultimate arbiters of the constitutionality of governments’ efforts to regulate nationwide issues like these, the day-to-day task of maintaining the balance of powers regarding cooperative legislative schemes “falls primarily to governments” (Canadian Western Bank, at para. 24).
[104] Here, nearly every provincial and territorial government in Canada has chosen to cooperate by enacting virtually identical statutes, by indicating their intent to participate as class members, and by intervening in this appeal supporting B.C. The federal government, which also intervened in support of the respondent, has indicated its intent to participate in the class action as well (House of Commons Debates, vol. 151, No. 216, 1st Sess., 44th Parl., June 19, 2023, at p. 16247 (Hon. Carolyn Bennett)). This multi-Crown participation is in harmony with our Court’s approach to intergovernmental cooperation on national issues, where collaboration between the executives and legislatures of both provincial and federal governments is vital. Especially given the presumption of constitutionality of legislation, a court should exercise considerable caution before it finds that this cooperation between multiple executive and legislative branches is unconstitutional (see Murray-Hall, at paras. 79 and 82; Reference re Impact Assessment Act, at para. 69; Kitkatla, at paras. 72-73; OPSEU, at pp. 19-20).
[105] As for the judicial branch of government, this Court has recognized that “[g]reater comity is required in our modern era when international transactions involve a constant flow of products, wealth and people across the globe” (Hunt, at p. 292). The courts in our federation provide a comparable quality of justice, and so demand the same level of faith in one another’s judgments where jurisdiction has been properly exercised (Morguard, at p. 1099). If overlapping litigation arises, courts acting in respect of one another have the tools to prevent any abuse of process (see, e.g., CPA, ss. 4(3) to 4.1). Comity between our federation’s courts helps with access to justice in a world where people and problems cross borders without heed for which legislature or court has authority over them.
[106] This is true in class actions, whose “purpose is to facilitate access to justice for citizens who share common problems and would otherwise have little incentive to apply to the courts on an individual basis to assert their rights” (Bisaillon, at para. 16). This Court has noted that class actions serve judicial economy, promote access to justice, and modify the behaviour of wrongdoers who might otherwise escape accountability for their actions (Dutton, at paras. 27-29; Hollick, at para. 15). These goals are met where governments cooperate with one another to have their claims litigated efficiently, in one action, before one province’s superior court, whose proceedings and judgment will be respected through the principle of comity in the other courts of our federation.
[107] Section 11 of the ORA therefore respects the legislative sovereignty of foreign Crowns. It is an example of the important role that national class actions play in matters which span the country, by providing a mechanism to help multiple governments cooperate while working toward the same goal. . Sanis Health Inc. v. British Columbia
In Sanis Health Inc. v. British Columbia (SCC, 2024) the Supreme Court of Canada dismissed an appeal, that against a BCCA decision dismissing an appeal, that of a dismissal by the BC Superior Court of an application by the corporate defendants in a consumer opioid damages class action, who sought an interlocutory division-of-powers ultra vires declaration against a class-action-supporting BC statutory provision [the 'Opioid Damages and Health Care Costs Recovery Act, s.11'].
Here the court considers the need for, and development of, cross-jurisdictional class action legislation, of which the case summarized here - seeking remedies for an "opioid epidemic spanning our country" - is an example:I. Introduction
[1] In an increasingly complex modern world, where governments assume greater regulatory roles in multifaceted areas overlapping jurisdictional boundaries, there is a greater need for cooperation between governments and between courts that cross those borders. Our Court has recognized this need in a more flexible approach to interjurisdictional cooperation. It is reflected in the interpretative principle of “cooperative federalism”; the respect and recognition of each province’s adjudicative jurisdiction in the spirit of mutual comity; and the development of procedural frameworks to permit cross-border collective actions. It is reflected in the horizontal cooperation between governments for the public good.
[2] National class actions in Canada, and in particular multi-Crown class actions, represent the convergence of these ideas. Fifteen years ago, this Court urged provincial legislatures to “pay more attention to the framework for national class actions and the problems they present” (Canada Post Corp. v. Lépine, 2009 SCC 16, [2009] 1 S.C.R. 549, at para. 57). When products, people, and problems cross jurisdictional boundaries, cooperation and comity are vital to ensure that justice is not blocked by provincial borders.
[3] The opioid epidemic spanning our country is a stark example of a crisis which attracts this cooperation and comity. National in scope, it highlights the role a national class action can play in achieving efficiency, consistency, and access to justice for all those who have experienced harm, regardless of geographic boundaries.
[4] The appellants, several pharmaceutical companies which manufacture, market, and distribute opioid products throughout Canada, challenge s. 11 of British Columbia’s Opioid Damages and Health Care Costs Recovery Act, S.B.C. 2018, c. 35 (ORA). The provision authorizes the government of B.C. to bring an action on behalf of a class consisting of other provincial, territorial and federal governments in Canada to recover their respective health care costs caused by “opioid-related wrong[s]”. The appellants say it does not respect the territorial limits on provincial legislative competence within the Constitution Act, 1867. They argue that the framework chosen by B.C. to facilitate cooperation and comity, through a law which allows for a national multi-governmental class action, violates our constitutional structure by undermining the sovereignty of other governments in Canada.
[5] The ultimate question raised by their appeal is this: Can multiple Canadian governments join in a single class action, in one province, before one province’s superior court, without unconstitutionally sacrificing their autonomy or sovereignty?
[6] Specifically, the appellants ask if one province can determine the rules of a class action that would bind other governments who choose to participate. Conversely, can a government agree to be bound by another province’s rules, even if it may limit the powers of its legislature and its successors?
[7] The appellants say that the answer to these questions must be “no”. They submit that B.C.’s class action framework in s. 11 is not possible under our Constitution, as it would enable the Province to take control over the substantive civil rights of other governments. As a representative plaintiff in a multi-Crown class action, the Province of B.C. could direct litigation on behalf of other sovereign provinces and territories, thereby binding those other governments to its decisions, infringing their litigation autonomy and violating their legislative sovereignty to enact potentially contradictory laws. The appellants argue that this cannot be reconciled with our Constitution, which restrains the territorial reach of provincial legislation to matters “[i]n each Province” (Constitution Act, 1867, s. 92).
[8] The courts in these proceedings have disagreed. They concluded s. 11 of the ORA creates a procedural mechanism which presumptively authorizes B.C. to act as a representative plaintiff in opioid-related proceedings on behalf of other Canadian governments who choose to participate. They held that this mechanism falls under the Province’s authority over “[t]he Administration of Justice in the Province” (s. 92(14) of the Constitution Act, 1867), and is meaningfully connected to B.C. without undermining any other government’s sovereignty.
[9] I agree with the courts below. As I shall explain, I do not accept the appellants’ position that the legislation deals with substantive, rather than procedural, rights. The purpose and effect of the challenged provision is to create a procedural mechanism to promote litigation efficiency by joining the claims of consenting Canadian Crowns into a single proceeding, while ensuring that each Crown’s claims will be decided in accordance with their own substantive law. Section 11 falls within the Province’s authority over the “Administration of Justice” under s. 92(14) of the Constitution Act, 1867.
[10] Section 11 of the ORA also properly respects the territorial limits under s. 92(14), which requires that the Province’s legislative powers be exercised “in the Province”. It is meaningfully connected to B.C. by providing a procedural tool that only applies to one proceeding before B.C.’s courts and affects foreign Crowns only if they consent to have their common issues resolved together. Each of the other Crowns’ substantive claims remain under the control of their own legislatures; their legislative sovereignty is respected.
[11] I would dismiss the appeal.
II. Background
[12] The emergence of national class actions in Canada reflects the harmony struck by the chords of intergovernmental cooperation and interjurisdictional comity which run throughout our federation’s constitutional structure. The three well-established goals underlying class actions — efficiency, access to justice and deterrence — recognized by this Court in Western Canadian Shopping Centres Inc. v. Dutton, 2001 SCC 46, [2001] 2 S.C.R. 534, Hollick v. Toronto (City), 2001 SCC 68, [2001] 3 S.C.R. 158, and Rumley v. British Columbia, 2001 SCC 69, [2001] 3 S.C.R. 184, may, in some cases, require intergovernmental cooperation in a federalist system.
[13] Federalism is one of the central organizing themes of our Constitution (Reference re Secession of Quebec, 1998 CanLII 793 (SCC), [1998] 2 S.C.R. 217, at para. 57). It is “a foundational principle” of our Constitution, meant “to reconcile diversity with unity” and to “foster cooperation between Parliament and the provincial legislatures for the common good” (References re Greenhouse Gas Pollution Pricing Act, 2021 SCC 11, [2021] 1 S.C.R. 175 (GGPPA Reference), at para. 48).
[14] Our Court has recognized that cooperation and comity are increasingly necessary to the operation of a federal society in the 21st century (see, e.g., Canadian Western Bank v. Alberta, 2007 SCC 22, [2007] 2 S.C.R. 3, at para. 24). Different levels of government are encouraged to work together to establish interlocking and even overlapping regulatory regimes to solve interjurisdictional problems (see, e.g., Reference re Securities Act, 2011 SCC 66, [2011] 3 S.C.R. 837, at paras. 57-62). Courts are expected to give comity — or full faith and credit — to recognize one another’s judgments on subjects which cross provincial boundaries (see, e.g., Hunt v. T&N plc, 1993 CanLII 43 (SCC), [1993] 4 S.C.R. 289, at p. 324). Anything less would “fly in the face of the obvious intention of the Constitution to create a single country” (Morguard Investments Ltd. v. De Savoye, 1990 CanLII 29 (SCC), [1990] 3 S.C.R. 1077, at p. 1099).
[15] The rise of national class actions is an example of this essential cooperation. While class actions have been available at common law since the 17th century, class proceedings statutes were first enacted by provincial legislatures in the late 20th century, simplifying the aggregation, prosecution, and determination of these claims through a valuable set of procedural tools (Dutton, at paras. 19 and 26; Hollick, at para. 13). The lack of cooperation by governments and parties within these new procedural mechanisms, however, sometimes resulted in overlapping class actions in multiple provinces covering the same claims, the same defendants, and even the same plaintiffs.
[16] In response to these cross-jurisdictional problems, several provinces changed their class proceedings statutes to clarify that their superior courts could certify an action with a class of plaintiffs that included residents outside the province (see W. K. Branch and M. P. Good, Class Actions in Canada (2nd ed. (loose-leaf)), at §§ 12:2-12:9). Nearly all provinces now have legislation enabling non-resident plaintiffs to have their claims adjudicated efficiently in a single proceeding before one superior court, whose judgment will be respected and enforced by their “home” courts.
[17] These national class actions, facilitated by cooperative provincial legislative schemes and the judicial recognition of a superior court’s judgments under the rules of private international law, help Canadians to deal with products, people, and problems that cross jurisdictional boundaries. Moreover, multi-Crown class actions are an example of horizontal intergovernmental coordination between provinces and the federal government in dealing with complex issues that cross jurisdictional borders.
[18] The opioid epidemic facing Canada is a tragic example of the border-crossing problems which engage such interjurisdictional cooperation and comity. The scale and scope of the opioid crisis are well known (see, e.g., R. v. Parranto, 2021 SCC 46, [2021] 3 S.C.R. 366, at paras. 93-97, per Moldaver J.; Special Advisory Committee on the Epidemic of Opioid Overdoses, Opioid- and Stimulant-related Harms in Canada, September 2024 (online)). Opioids are a powerful class of painkillers. While some opioids have become associated with the illicit drug trade, most have legitimate medical uses when properly administered. When used improperly, however, opioids can cause addiction.
[19] The pleadings claim Canada has experienced high numbers of opioid-related addictions, illnesses and deaths and that the epidemic has affected every province and territory in Canada, devastating communities, families and lives nationwide.
[20] Faced with the opioid epidemic, in 2018 B.C. brought a claim against 49 manufacturers, marketers, and distributors of opioid products, which it alleged had contributed to the opioid epidemic by falsely marketing their products as being less addictive and less prone to abuse, tolerance, and withdrawal than other pain medications. B.C. alleged the commission of several common law torts, including negligence, unjust enrichment, fraudulent misrepresentation, and breaches of s. 52 of the Competition Act, R.S.C. 1985, c. C-34.
[21] B.C. started this proceeding as a proposed class action under B.C.’s Class Proceedings Act, R.S.B.C. 1996, c. 50 (CPA), seeking certification with itself as the representative plaintiff acting on behalf of a class consisting of all federal, provincial, and territorial governments and agencies that had paid healthcare, pharmaceutical and treatment costs related to opioids.
[22] Soon after, legislation was introduced to create a direct, statutory cause of action for B.C. in the litigation it had begun. It introduced new evidentiary rules and other procedural mechanisms modeled on B.C.’s former Tobacco Damages and Health Care Costs Recovery Act, S.B.C. 2000, c. 30 (TRA), upheld by this Court in British Columbia v. Imperial Tobacco Canada Ltd., 2005 SCC 49, [2005] 2 S.C.R. 473 (see Legislative Assembly of British Columbia, Official Report of Debates (Hansard), No. 150, 3rd Sess., 41st Parl., October 1, 2018, at pp. 5331-32 (Hon. David Eby)). For example, these rules allow statistical information as admissible evidence to prove causation (s. 5), relieve the government from proving the cause of any particular individual’s opioid-related injuries (s. 2(5)(a)), and require the court to presume that those individuals would not have used opioids without the defendants’ actions (s. 3(2)).
[23] Unlike the former TRA, however, s. 11(1)(b) of the ORA authorizes the government of B.C., in its existing proceeding, to “bring an action on behalf of a class consisting of” other provincial, territorial and federal governments in Canada and their healthcare agencies (as B.C. had already done), unless those governments opt out of the class under s. 16 of the CPA.
[24] The ORA came into force a few months after B.C. had started its proceeding based on the common law and Competition Act causes of action. B.C. then changed its notice of civil claim to incorporate s. 11 expressly into its pleadings. Its latest amended civil claim now also proposes two sub-classes of plaintiffs: one for all governments relying on the common law and Competition Act causes of action; and another for “governments that have legislation specifically directed at recovery of damages and healthcare costs arising from the Opioid Epidemic” (A.R., vol. IV, at p. 167; A.R., vol. VII, at p. 136).
[25] This second sub-class reflects the fact that nearly all provinces and territories in Canada have since enacted their own version of an opioid healthcare recovery statute similar to B.C.’s ORA.[1] Each statute has a provision that is substantially similar to s. 11 of B.C.’s ORA (see, e.g., Opioid Damages and Health Care Costs Recovery Act, S.A. 2019, c. O-8.5, s. 13; Opioid Damages and Health Care Costs Recovery Act, 2019, S.O. 2019, c. 17, Sch. 2, s. 12). Many have an additional provision stating that if a class action has been commenced by another province, the government’s own claim is subject to that jurisdiction’s procedural rules while maintaining the substantive rights within its own ORA-type legislation (see, e.g., Alberta’s Opioid Damages and Health Care Costs Recovery Act, s. 12; Ontario’s Opioid Damages and Health Care Costs Recovery Act, 2019, s. 11).
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