A national class action on behalf of multiple Canadian governments to recover opioid epidemic healthcare costs simplifies the aggregation, prosecution, and determination of claims that span geographic boundaries. That is what the Supreme Court of Canada (SCC) held in Sanis Health Inc. v British Columbia, 2024 SCC 40 (Sanis), based on the majority’s reaffirmation that class proceedings legislation does not affect substantive rights.
In Sanis, the Province of British Columbia commenced a class action against 49 manufacturers, marketers, and distributors of opioid products, alleging that they falsely marketed their products as being less addictive and less prone to abuse, tolerance and withdrawal than other pain medications. Shortly after commencing the action, B.C. introduced the Opioid Damages and Health Care Costs Recovery Act, SBC 2018, c 34 (the ORA) which created a direct, statutory cause of action against the defendants and permitted British Columbia to bring an action on behalf of the governments of the Canadian provinces (who enacted similar legislation) as well as the federal government. The legislation introduced new evidentiary rules and procedural mechanisms modeled on B.C.’s former Tobacco Damages and Health Care Costs Recovery Act, S.B.C. 2000, c. 30. These rules allowed for statistical information as admissible evidence to prove causation (Section 5), relieved the government from proving the cause of any particular individual’s opioid-related injuries (Section 2(5)(a)), and required the court to presume that those individuals would not have used opioids without the defendants’ actions (Section (2)). The impugned section of the ORA, and the primary focus of the SCC, was Section 11, which provides as follows:
If proceedings already commenced
11 (1) If the government has commenced a proceeding in relation to an opioid-related wrong and the proceeding is ongoing as of the date this section comes into force,
(a) the proceeding continues in accordance with this Act,
(b) for the purposes of section 4 of the Class Proceedings Act, the government may bring an action on behalf of a class consisting of
(i) one or more of the government of Canada and the government of a jurisdiction within Canada, and
(ii) a federal or provincial government payment agency that makes reimbursement for the cost of services that are in the nature of health care benefits within the meaning of this Act,
Also at issue was the ORA’s opt-out mechanism provided at Subsection (2):
(2) Nothing in subsection (1) (b) of this section prevents a member of the class described in that provision from opting out of the proceeding in accordance with section 16 of the Class Proceedings Act.
Following the passage of the ORA, B.C. amended its claim to include two classes of plaintiff: one for all governments relying on the common law and Competition Act causes of action, and another for governments with legislation directed at recovery of healthcare costs arising from the opioid epidemic.
Several of the defendant pharmaceutical companies argued that Section 11 of the ORA is ultra vires because it deals with “Property and Civil Rights” of other governments which is not within B.C.’s territorial legislative competence pursuant to Section 92 of the Constitution Act, 1867. The British Columbia Supreme Court dismissed the application, and the BC Court of Appeal unanimously dismissed the appeal, holding that Section 11 of the ORA did not affect substantive rights. Justice Newburry of the BC Court of Appeal commented that Section 11 of the ORA represents “a bold step, if not an experiment” in the realm of national class actions.
By a 6-1 majority, the Supreme Court of Canada dismissed the appeal.
For the majority, Justice Karakatsanis, applied the two-part framework established in British Columbia v Imperial Tobacco Canada Ltd., 2005 SCC 49 which consists of (1) identifying the “pith and substance”, that is, the law’s purpose and effects; and (2) determining whether the challenged legislation respects territorial limits of provincial power set out in the Section 92 of the Constitution Act, 1867.
The appellant pharmaceutical companies argued that the purpose of Section 11 is to create a cause of action for the Crown in right of B.C. as a representative plaintiff, which was not permitted because the Crown is not a person. The Court disagreed, finding that the “Crown” is a person capable of being a representative plaintiff under the Class Proceedings Act, RSBC 1996, Chapter 50.
The majority viewed the legislation through the interpretive lens of “cooperative federalism” to help Crowns cooperate in the collective pursuit of their individual claims. It endorsed the intergovernmental cooperation and interjurisdictional comity necessary to respond to the nationwide character of the opioid epidemic. The spirit of cooperation was evidenced by other provinces who intervened in support of B.C.
The Court observed that the “pith and substance” of Section 11 was to provide a procedural mechanism for the “administration of justice” under Section 92(14) of the Constitution Act, 1867. The majority reinforced previous class action jurisprudence setting out the validity of “opt-out” regimes, as sufficient to safeguard class member autonomy, and not affect substantive rights. The Court described Section 11 as “deal[ing] with the promotion of litigation efficiency by joining the claims of consenting Crowns into the single proceeding.”
In dissent, Justice Côté reasoned that the pith and substance of Section 11 is to legislate in respect of “property and civil rights”, in large part because the default for the opt-out regime was to include the provincial and federal governments in the class at B.C.’s election. This, commented Justice Côté, is contrary to the territorial limitations imposed by Section 92 of the Constitution Act:
By implementing such a regime, the legislature of British Columbia is seeking to preserve the substantive rights it has arrogated by automatically imposing a class action upon other governments. It is commencing an action without the consent of the other governments.
In Sanis, the SCC endorsed creative uses of class proceedings to confront multijurisdictional claims of Canadian governments. The SCC also endorsed the effectiveness of an “opt-out” regime as a procedural safeguard sufficient to avoid affecting class members’ substantive rights. It remains to be seen whether similar litigation will arise in the Canadian legal landscape in the future.
Courts approach the question of a law’s validity under the interpretive presumption of constitutionality. This presumption is strong when the attorney’s general of the jurisdictions affected by the law supports its validity.