The Supreme Court of Canada has confirmed the constitutionality of BC legislation enacted to permit the BC Crown to act as the representative plaintiff in a class action on behalf of a class of governments and government agencies in Canada. While the Supreme Court’s ruling was specific to BC’s Opioid Damages and Health Care Costs Recovery Act[1] (ORA), it stands as an endorsement of multi-crown class actions generally.
The Supreme Court’s decision was made in the context of the BC government’s proposed class action related to opioids. In 2018, the province commenced an action against various manufacturers, marketers and distributors of opioid products in Canada, alleging, amongst other things, that the marketing of opioid products constituted negligence and breaches of the Competition Act.[2] The Crown seeks to act as representative plaintiff on behalf of a class consisting of all federal, provincial, and territorial governments and agencies that have incurred healthcare costs related to the opioid epidemic.
Following the commencement of the action, the BC legislature enacted the ORA to create a direct, statutory cause of action against any manufacturer, wholesaler or consultant of opioid products who commits an “opioid-related wrong.” Section 11 of the ORA expressly authorizes the Crown to bring an action on behalf of other governments or government payment agencies in Canada, subject to the right of the other governments or agencies to opt-out of the class action under s. 16 of BC’s Class Proceedings Act.[3] The BC Crown then amended its pleadings in the action to include a claim under s. 11 of the ORA.
Several defendants in the action challenged s. 11 as being unconstitutional. The basis of their challenge was that the provision did not respect the territorial limits on provincial legislative competence within the Constitution Act, 1867, as it would undermine the sovereignty of other governments in Canada by allowing the BC Crown to take control over their substantive civil rights in the conduct of the litigation.
The Supreme Court proceeded with an analysis under the test for constitutional validity in British Columbia v. Imperial Tobacco Canada Ltd., 2005 SCC 49: first determining the “pith and substance” or the main thrust of the legislation, and secondarily, determining whether the legislation respects the territorial limits of provincial power.
In respect of the first step of the test, the Supreme Court determined that the main thrust of s. 11 was to create a procedural mechanism (rather than substantive right or obligation) to “promote litigation efficiency by joining the claims of consenting Crowns into the single proceeding already before the courts of BC, so their individual claims can benefit from the efficiency and consistency that class actions and the ORA provide.”[4] The Supreme Court determined the legislation was an appropriate exercise of provincial authority under s. 92(14) of the Constitution Act, 1867, which grants the provinces the right to enact laws and adopt regulations pertaining to courts, rules of court and civil procedure.
At the second step of the test, the Supreme Court determined that s. 11 represents an exercise of authority by the BC legislature to allow the BC Crown “to bring an action that maintains a meaningful connection to BC through the common issues within the BC litigation, the court’s jurisdiction over those issues, and the consent of all participating Crowns”[5] and that the provision would only affect foreign Crowns if they chose not to opt out of the proceeding under s. 16 of the Class Proceedings Act. Further, to the extent that s. 11 results in foreign Crowns giving up litigation autonomy, this did not undermine their sovereignty. The Supreme Court emphasized that the legislation merely applies procedural rules to a foreign Crown who consents to participate in a class action, rather than interfering with the legislative sovereignty of a foreign Crown by improperly seeking to impact a foreign Crown’s substantive rights.[6] Therefore, s. 11 of the ORA appropriately respects the territorial limits of provincial power.
As a result, the Supreme Court found s. 11 of the ORA to be constitutional.
Notably, throughout the decision, the Supreme Court emphasized the need for cooperation and comity between Canada’s federal, provincial and territorial governments in the context of an increasing number of issues that cross jurisdictional boundaries, such as the opioid epidemic. The Supreme Court’s decision appears to open the door to further multi-crown class actions for costs incurred by governments in responding to significant public health and other pan-Canadian challenges.
For more information on this case or any questions related to the legal implications of this decision on your business, please contact the authors, Matthew Fleming or Jaclyn Vanstone.
[1] SBC 2018, c. 35
[2] RSC 1985, c. 34
[3] RSBC 1996, c. 50
[4] para 75
[5] para 91
[6] paras 101-107
