In Sanis Health Inc. v. British Columbia, the Supreme Court of Canada considered for the first time the constitutionality of the “government class action”.[1] The action was commenced by the Government of British Columbia as representative plaintiff in relation to a claim commenced pursuant to special-purpose provincial legislation. The putative class was comprised of the federal, territorial and other provincial Crowns in Canada. In dismissing the constitutional appeal, the Supreme Court held that the express provision permitting healthcare cost recovery claims to be brought on behalf of extraterritorial governments was constitutional. The ruling will undoubtedly have significant impact on the prospect of future “multi-Crown” class actions.
Background and procedural history
In 2018, B.C. brought a claim against 49 manufacturers, marketers and distributors of opioid products. B.C. sought to certify a class action with itself as the representative plaintiff acting on behalf of all federal, provincial and territorial Crowns in Canada that had incurred health-related costs associated with opioids.
After commencing its claim, B.C. enacted the Opioid Damages and Health Care Costs Recovery Act (the ORA). The ORA created a statutory cause of action for B.C.’s claim, and section 11(1)(b) enabled B.C. to “bring an action on behalf of a class consisting of” the federal, provincial and territorial governments, unless they opt out.[2] Nearly all provinces and territories have subsequently enacted their own versions of the ORA.
Multiple defendants challenged the constitutionality of section 11 of the ORA, arguing that the provision was ultra vires the B.C. legislature as it operated with respect to property and civil rights outside of the province. The defendants further contended that the provision infringed upon the substantive civil rights of other governments by effectively deciding the rules of a class action that would bind other governments, thereby compromising such governments’ autonomy and sovereignty.
Both the B.C. Supreme Court and B.C. Court of Appeal rejected the defendants’ arguments, finding that section 11 fell within B.C.’s authority to legislate regarding the administration of justice in the province.[3] While the Court of Appeal acknowledged that section 11 was a “bold step, if not an experiment,” it nonetheless affirmed the lower court ruling that the ORA was intra vires by virtue of B.C.’s administration of justice powers.[4]
The Supreme Court of Canada’s decision
In a 6–1 decision, Justice Karakatsanis, writing for the majority, held that section 11 of the ORA is intra vires the B.C. legislature. She held that the pith and substance of the provision was the creation of a procedural mechanism for the application of the ORA to the ongoing proceeding:
- The purpose of section 11: The majority of the Court rejected the defendants’ argument that section 11 was enacted to enable the B.C. Crown to act as a representative plaintiff. She held that this could not be the purpose as the B.C. Crown was already a “person” capable of acting as a representative plaintiff, and the foreign Crowns were similarly already capable of being members of a class. The real purpose of section 11, the Court held, was merely to provide the mechanism through which the ORA would apply to the already ongoing multi-Crown class action.
- The effects of section 11: Since governments can opt out under the ORA, the Court further held that the provision did not eliminate Crown autonomy or alter the substantive rights of any foreign Crown. Rather, the legislation was deemed simply to create procedural rules for B.C.’s courts, once jurisdiction in the class proceeding was established.
The majority of the Court affirmed the lower courts’ decisions, finding that section 11 is properly classified under section 92(14) of the Constitution Act, 1867, which provides authority over the administration of justice in the province. The Court further held that section 11 satisfies the “meaningful connection” test since the other Crowns can opt out of the proceeding. The Court held that there is a meaningful connection between B.C.’s legislature, a provision that deals with its courts’ procedures and the Crowns that choose to participate in the class proceedings.
Lastly, the majority of the Court rejected the defendants’ arguments that this provision infringes Crown sovereignty. It held that the foreign Crowns were joining the proceeding in their capacity as natural persons; therefore, they could be bound by legal consequences that fall outside of their legislative competence. Since the foreign Crowns chose to engage in those activities elsewhere, the Court found that being bound by the laws of that other province does not infringe the foreign Crown’s sovereignty. Additionally, the Court held that the application of a Crown’s procedural rules would not alter the substantive laws which otherwise apply to the foreign Crowns. Therefore, section 11 respects the legislative sovereignty of foreign Crowns.
Justice Côté wrote a dissenting opinion, agreeing with the defendants. She found that the pith and substance of section 11 was to legislate over property and civil rights outside of the province. Additionally, she concluded that the statute would automatically bind the other governments to the law of British Columbia, unless they opted out — an outcome that, in her view, constituted “the complete opposite of litigation autonomy” for the foreign Crowns.
Takeaways
The majority decision arguably opens the door for future multi-Crown class actions. In particular, the findings that Crowns can act as representative plaintiffs for a class of other governments and that Crown sovereignty is not infringed by the act of a government entity joining — and being bound by — a proceeding in another jurisdiction may well lead to a proliferation of such claims in the future. Among other things, the ruling seemingly endorsed this type of interjurisdictional Crown cooperation, which may encourage governments to bring multi-Crown class action claims in other contexts as well.
[1] Sanis Health Inc v. British Columbia, 2024 SCC 40.
[2] Opioid Damages and Health Care Costs Recovery Act, SBC 2018, c. 35, at s. 11(1)(b).
[3] British Columbia v. Apotex Inc., 2022 BCSC 2147.
[4] Sandoz Canada Inc. v. British Columbia, 2023 BCCA 306, at para. 3.
