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Constitution - Division of Powers (3). 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'].
The court addresses the constitutional 'division of powers' analysis of the case, here at the first pith and substance 'characterization' (purpose and effects) stage (the second stage is the division of power classification):B. What Is the Correct Characterization of Section 11, Considering Its Purpose and Effects?
[43] Turning to the first stage of the Imperial Tobacco framework, the “pith and substance” of s. 11 must be identified — that is, its “main thrust, or dominant or most important characteristic” (GGPPA Reference, at para. 51). The court must characterize the challenged law according to its “leading feature or true character” (R. v. Morgentaler, 1993 CanLII 74 (SCC), [1993] 3 S.C.R. 463, at pp. 481-83), doing so “as precisely as possible” without regard to its incidental or ancillary aspects (GGPPA Reference, at para. 52; see also Imperial Tobacco, at para. 28).
[44] In conducting this characterization, courts will look at the law’s purpose and effects. A law’s purpose can be determined by examining both intrinsic evidence — that is, the text of the law itself — and extrinsic evidence — including legislative debates, minutes of parliamentary committees, and relevant government publications (Murray-Hall v. Quebec (Attorney General), 2023 SCC 10, at para. 25). A law’s effects can be found by considering both its legal effects — those which flow directly from the provisions of the statute itself — and its practical effects — those which flow from the application of the law (Reference re Genetic Non-Discrimination Act, 2020 SCC 17, [2020] 2 S.C.R. 283, at para. 51). This is essentially an “interpretative exercise [which] is meant to be neither technical nor formalistic” (Murray-Hall, at para. 24).
[45] The court will approach the question of a law’s validity under the interpretive presumption of constitutionality, assuming that the legislature did not intend to exceed its authority if the law can be read to limit it within its proper jurisdictional bounds (Reference re Impact Assessment Act, 2023 SCC 23, at para. 72). This presumption is especially strong when the attorneys general of the jurisdictions affected by the law support its validity (Kitkatla Band v. British Columbia (Minister of Small Business, Tourism and Culture), 2002 SCC 31, [2002] 2 S.C.R. 146, at para. 73; Goodwin v. British Columbia (Superintendent of Motor Vehicles), 2015 SCC 46, [2015] 3 S.C.R. 250, at para. 33; OPSEU v. Ontario (Attorney General), 1987 CanLII 71 (SCC), [1987] 2 S.C.R. 2, at pp. 19-20). That said, the court’s role is to adjudicate constitutional compliance and not simply defer to an Attorney General’s opinion of a law’s validity.
(1) What Is the Purpose of Section 11?
[46] The appellants urge this Court to find that the purpose of s. 11 is to create a cause of action for the Crown in right of B.C. to act as a representative plaintiff in a class action on behalf of a class of “foreign” Crowns, since it could not do so under the CPA alone. Because the Crown is not a “person” as that statute requires, it could not otherwise act as a plaintiff in a class action. The appellants argue that, since s. 29 of the Interpretation Act, R.S.B.C. 1996, c. 238, and s. 1 of the Crown Proceeding Act, R.S.B.C. 1996, c. 89, both exclude the Crown from the definition of a “person”, the purpose of s. 11 is to create substantive rights for the Crown in right of B.C. and the other provinces which they formerly lacked. This argument requires consideration of whether, without s. 11, a Crown is a “person” or “a class of persons” as ss. 2(1) and 4(1)(b) of the CPA require.
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[57] Rather, the intrinsic evidence from the text of s. 11 strongly indicates that its purpose is to provide a procedural mechanism explaining how the rest of the ORA — including the statutory cause of action it provides to B.C. and its various other unique evidentiary and procedural rules — applies to B.C.’s ongoing proceeding after the ORA came into force. The provision does not create a new proceeding. Instead, s. 11(1)(a), along with the preamble to the provision, identifies this proceeding as the subject of the ORA, and states that if it remained ongoing after the ORA came into force, it would continue in accordance with this Act. Section 11(1)(b) authorizes the government to bring its action on behalf of other Canadian governments and their health care agencies, confirming that the government’s claim, brought under the mechanisms already available to it in the CPA, remained effective, while also placing boundaries around who the government may propose to include in the class. Section 11(1)(c) states that if the procedure was completed or a court order was made, it would continue to have effect unless inconsistent with the ORA. And finally, s. 11(2) states that the ability for proposed class members to opt out of the proceeding under s. 16 of the CPA remained unchanged. The text of s. 11 is tightly oriented around the continued efficacy of B.C.’s existing proceeding and the benefits which the ORA would provide it, including the increased efficiency that a multi-Crown class action would offer to everyone involved.
[58] This purpose of s. 11 is clear from the entire context of the ORA. While a court must characterize the challenged provisions rather than the entire law, the character of the provision must be assessed in the context of the larger statutory scheme. Its relationship to that larger scheme “may be an important consideration in determining its pith and substance” (Quebec (Attorney General), at para. 30). Several provisions in the ORA grant benefits to the proceeding identified by s. 11. Most significant is the “direct and distinct action” that the ORA grants to B.C. (ss. 2 and 3). In addition, provisions permit a finding of joint liability between multiple defendants (ss. 4, 7 and 8) and the evidence a court may consider to establish causation and quantification of damages (s. 5). Others are simply meant to clarify what will happen when the statute comes into force, similar to s. 11 itself. For example, s. 6 extends any applicable limitations period, s. 10 provides for the retroactive effect of the legislation, and s. 12 states that any settlement would continue to have effect. In that context, s. 11 is meant to provide the mechanism through which these various substantive and procedural provisions apply to the proceeding already progressing before the court — a conclusion reinforced by s. 11’s placement in the statute immediately following the retroactive effect created by s. 10.
[59] The extrinsic evidence supports this interpretation. When the government of B.C. announced it was beginning this litigation, its news release stated that it would soon introduce legislation “[t]o assist the court process” (BC Government News, British Columbia files lawsuit against opioid industry, August 29, 2018 (online)). When the ORA was later brought before the Legislative Assembly, the Attorney General stated that the law was intended to “allow [the] government to proceed in its litigation with opioid manufacturers and wholesalers on a similar basis to that in the tobacco case” (Official Report of Debates (Hansard), October 1, 2018, at p. 5331 (Hon. David Eby)). Acknowledging the ongoing proceeding, the Attorney General noted at the bill’s second reading that “[t]he class action that has been commenced will be continued under this act, and this act will serve to extend the procedural rules included within it to the action in progress” (Official Report of Debates (Hansard), No. 152, 3rd Sess., 41st Parl., October 2, 2018, at p. 5390 (Hon. David Eby)).
[60] I agree with B.C. and the courts below. I do not accept that the purpose of s. 11 of the ORA was to create substantive rights for the Crown by enabling it to engage in litigation under the CPA which it could not otherwise do. Based on both the intrinsic and extrinsic evidence, the purpose of s. 11 is to provide a procedural mechanism through which the broader provisions in the ORA could apply to B.C.’s existing, proposed multi-Crown class action.
(2) What Are the Effects of Section 11?
[61] The appellants submit that s. 11 impacts the substantive rights of foreign Crowns by forcing them to arrogate to the government of B.C. their “litigation autonomy” (a collection of substantive civil rights related to the Crown’s sovereign ability to independently litigate their own causes of action and to control the conduct of that litigation) (A.F., at paras. 63-64). They say, it also forces foreign Crowns to make the unconstitutional choice about opting in or opting out of this class action.
[62] B.C. counters that Crowns must always sacrifice aspects of “litigation autonomy” when they litigate in courts outside their home jurisdiction. This does not violate any constitutional principle, even when Crowns participate through the procedural mechanisms provided by class proceedings statutes. The effect here is limited to this single proceeding which preserves the substantive rights of other participating governments in accordance with their own laws.
[63] An individual’s “litigation autonomy” has been described as an important collection of rights, such as the right to appoint counsel of choice, the right to participate in developing litigation strategy, and the right to negotiate a settlement to the action (Johnson v. Ontario, 2022 ONCA 725, 475 D.L.R. (4th) 344, at para. 47; Coburn and Watson’s Metropolitan Home v. Home Depot of Canada Inc., 2019 BCCA 308, 438 D.L.R. (4th) 533, at para. 14). “Our society places a high premium on a person’s ability to initiate and participate in litigation as an incident of personal autonomy” (Johnson v. Ontario, 2021 ONCA 650, 158 O.R. (3d) 266, at para. 16). When an individual chooses to participate as a member in a class action, they necessarily also choose to give up some of these rights as “the price paid to receive the benefit from a class proceeding” (Coburn and Watson’s Metropolitan Home, at para. 14; M. H. Redish, Wholesale Justice: Constitutional Democracy and the Problem of the Class Action Lawsuit (2009), at pp. 135-75).
[64] In multi-Crown class actions, this choice means that the government of the day may bind its successors to the choice of ceding some of its litigation rights. Does this force an unconstitutional sacrifice of substantive rights on foreign Crowns?
[65] My answer is “no”. While participation in a class action involves some sacrifice of litigation autonomy, this does not mean that s. 11 is a substantive provision, or that it effects an unconstitutional sacrifice of substantive rights.
[66] Whenever a Crown chooses to engage in litigation to enforce its civil rights, including in its own territory, it loses aspects of litigation autonomy — a choice which may have binding consequences for its successors, while not necessarily forcing a sacrifice of substantive rights on them. As I have explained, a Crown has the same powers as an individual when acting as a litigant to enforce its civil rights. Like any other litigant, a Crown may not withdraw from or control proceedings once an independent court is seized with the claim and matters relating to its litigation autonomy are often at the court’s discretion. For example, a judge is entitled to decline to enforce a settlement agreed to by the parties (see, e.g., Wannan v. Hutchison, 2020 BCSC 1233, 74 C.P.C. (8th) 222; Milios v. Zagas (1998), 1998 CanLII 7119 (ON CA), 38 O.R. (3d) 218 (C.A.)). A judge may also refuse to allow a plaintiff to withdraw or discontinue an action in certain circumstances (see, e.g., DLC Holdings Corp. v. Payne, 2021 BCCA 31, 456 D.L.R. (4th) 337; Dubuc v. 1663066 Ontario Inc., 2009 ONCA 914, 99 O.R. (3d) 476; Poffenroth Agri Ltd. v. Brown, 2020 SKCA 121, 65 C.P.C. (8th) 348). Thus, the consequences of many litigation choices deprive the parties of their freedom to act as they might wish.
[67] When a Crown chooses to litigate in a different jurisdiction, this choice will have even more significant, binding consequences. The Crown in right of Canada or a province can sue in whatever province has jurisdiction over the claim, but a Crown that chooses to litigate in another province must subject itself to the procedural rules of that forum (see McNamara Construction, at p. 660; Hogg, Monahan and Wright, at p. 493; Horsman and Morley, at § 13:14). Those procedural rules are controlled by that other province’s legislature. As the appellants acknowledged during the hearing, a Crown’s submission to the procedural rules of another jurisdiction in ordinary litigation does not violate any constitutional principle (transcript, day 1, at p. 6; see Hogg and Wright, at § 10:20). They argue, however, that the degree of abandonment of litigation autonomy that a multi-Crown class action would require goes too far and violates the Constitution.
[68] Granted, as a participant in a class action, a Crown would sacrifice more aspects of its litigation autonomy — but only if it chooses to do so through the opt-in or opt-out mechanism. That procedural right has been recognized as “[t]he primary protection for the absent class members in the class proceeding process” (1250264 Ontario Inc. v. Pet Valu Canada Inc., 2013 ONCA 279, 362 D.L.R. (4th) 88, at para. 41, quoting 1176560 Ontario Ltd. v. Great Atlantic & Pacific Co. of Canada Ltd. (2002), 2002 CanLII 6199 (ON SC), 62 O.R. (3d) 535 (S.C.J.), at para. 75). In choosing to participate by opting in or not opting out, a class member, including a Crown, gains the benefits of class actions (such as cost savings and the avoidance of duplicative proceedings) in exchange for the burdens (such as being bound by the decisions of the representative plaintiff) (see Coburn and Watson’s Metropolitan Home, at paras. 14-15). That is why the notice requirements associated with the opt-in/opt-out mechanism are such an important procedural protection, to make sure that a class member knows of the rights they would sacrifice through their participation (see Lépine, at paras. 42-43; Dutton, at para. 49; Currie v. McDonald’s Restaurants of Canada Ltd. (2005), 2005 CanLII 3360 (ON CA), 250 D.L.R. (4th) 224 (Ont. C.A.), at para. 28; Herold v. Wassermann, 2022 SKCA 103, 473 D.L.R. (4th) 281, at para. 36). Once properly notified, the choice of a class member to participate represents an exercise of litigation autonomy, although one which involves sacrificing other elements of autonomy.
[69] Even at that point, many aspects of litigation autonomy remain available through the procedural protections offered to non-representative plaintiffs within class proceedings, including a foreign Crown. For example, a court keeps the discretion to allow a class member to opt in or out late, if they can show they were not aware of the proceeding or the harm they had suffered (see CPA, ss. 8(3) and 10; Fitzsimmons v. Cie matériaux de construction BP Canada, 2016 QCCS 1446; Branch and Good, at § 11:1). At any time, the court may permit a class member to participate in the proceeding as an intervener to make sure their interests are fairly and adequately represented (see CPA, ss. 12 and 15(1); see also Tataskweyak Cree Nation v. Canada (A.G.), 2021 MBQB 153; Branch and Good, at § 16:6). Class members may apply to replace the representative plaintiff if they believe they are not adequately representing the class (see CPA, ss. 8(3) and 10(1); Logan v. Ontario (Minister of Health) (2003), 36 C.P.C. (5th) 176 (Ont. S.C.J.); Branch and Good, at § 16:4). Class members may also object to a proposed settlement (see CPA, s. 35; Dabbs v. Sun Life Assurance Co. of Canada (1998), 1998 CanLII 14855 (ON SC), 40 O.R. (3d) 429 (C.J. (Gen. Div.)); Branch and Good, at § 17:2). Class members can even apply for leave to act as a representative plaintiff to prosecute an appeal from an order made in a class proceeding where the representative plaintiff declines to act (see CPA, s. 36(2); Leonard v. The Manufacturers Life Insurance Company, 2022 BCCA 28, 75 B.C.L.R. (6th) 235, at para. 16; Branch and Good, at § 21:1). This is in addition to the court’s general supervisory jurisdiction over the proceeding, which is triggered from the moment the proposed class action begins and obliges the court to make sure the interests of the class members are protected (see CPA, s. 12; Coburn and Watson’s Metropolitan Home, at para. 14; W. K. Winkler et al., The Law of Class Actions in Canada (2014), at p. 20).
[70] These procedural protections, in class proceedings statutes and in the court’s inherent jurisdiction, protect those aspects of a class member’s litigation autonomy otherwise sacrificed when participating in a class action. Placing too high of a protective fence around the litigation autonomy of a class member, including a Crown, would likely extinguish many benefits that class proceedings statutes are intended to provide (see Berry v. Pulley, 2011 ONSC 1378, 106 O.R. (3d) 123, at para. 62; J. Cassels and C. Jones, The Law of Large-Scale Claims: Product Liability, Mass Torts, and Complex Litigation in Canada (2005), at pp. 434-38).
[71] Thus, participating in class proceedings involves both benefits and burdens for a participant’s litigation autonomy. When a Crown takes the benefits of a class proceedings statute, it also accepts its burdens (Alberta Government Telephones v. Canada (Canadian Radio-television and Telecommunications Commission), 1989 CanLII 78 (SCC), [1989] 2 S.C.R. 225, at p. 284). It does not violate the Crown’s autonomy for it to accept the consequences of its litigation choices as a plaintiff. Consequences are not substantive law.
[72] Nor do these consequences on the Crown’s litigation choices render s. 11 of the ORA a provision dealing with substantive civil rights simply because those choices may affect the Crown’s substantive rights. While participation as a class member undoubtedly affects substantive rights, the ability to participate in a class is only a procedural right (AIC Limited v. Fischer, 2013 SCC 69, [2013] 3 S.C.R. 949, at para. 34). This Court has repeatedly affirmed that class proceedings legislation is procedural and does not change or create substantive rights (see, e.g., Bisaillon v. Concordia University, 2006 SCC 19, [2006] 1 S.C.R. 666, at para. 17; Pro-Sys Consultants, at paras. 131-33; Pioneer Corp. v. Godfrey, 2019 SCC 42, [2019] 3 S.C.R. 295, at para. 116). The substantive rights of any foreign Crowns who choose to participate in this proceeding will still be determined in accordance with their own laws, which remain subject to change by their legislature and its successor governments.
[73] I agree with the courts below, therefore, that the legal effects of s. 11 are to regulate how B.C.’s existing proceeding, and the procedural mechanisms from the CPA which apply to that proceeding, would continue in a modified form after the ORA came into force. Section 11 authorizes the government of B.C. to bring this proposed class action, on behalf of those potential class members in s. 11(1)(b). Section 11 also extends to this proceeding the additional substantive rights and remedies that the ORA provides exclusively to B.C., while the substantive rights of foreign Crowns who choose to participate under these procedural rules remain unchanged.
[74] Its practical effects are similarly constrained: it merely requires foreign Crowns to choose whether they wish to accept the procedural benefits and burdens of the class action that s. 11 authorizes the Crown in right of B.C. to bring on their behalf, after considering the consequences that this may have on their rights. Far from offering Crowns an “unconstitutional choice”, as the appellants describe it (A.F., at paras. 3 and 77), s. 11 lets Crowns exercise their autonomy and choose whether it is in their best interests to seek recovery for their opioid-related harms in a single, consolidated proceeding, or to opt out and go it alone. As the Attorneys General for the Northwest Territories and Prince Edward Island point out, the existence of this choice may be the only way that smaller jurisdictions could achieve recovery (I.F., Attorney General of the Northwest Territories, at paras. 11-22; I.F., Attorney General of Prince Edward Island, at para. 18). The appellants’ arguments, if accepted, would prevent the Crowns from exercising their autonomy to efficiently pursue their claims collectively by telling them that this is not a choice they can make. I conclude that a government can agree to be bound by another province’s rules in a class action proceeding, even if the consequences may limit the powers of its legislature and its successors to avoid the consequences of that choice.
(3) What Is Section 11’s Pith and Substance?
[75] In sum, the purpose and effect of s. 11 deal with the promotion of litigation efficiency by joining the claims of consenting Crowns into the single proceeding already before the courts of B.C., so their individual claims can benefit from the efficiency and consistency that class actions and the ORA provide.
[76] The courts below were correct in finding that the pith and substance of s. 11 is the creation of a procedural mechanism for the application of the ORA to the existing opioid-related proceeding, that the Province of B.C. is authorized to continue as a representative plaintiff on behalf of other Canadian governments who choose to participate.
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