Multi-Crown class actions present a novel solution for governments seeking to hold large national, or multi-national, defendants to account for harms which have occurred on a national scale. In Sanis Health, 2024 SCC 40, the Supreme Court recently affirmed the constitutionality of multi-Crown class actions. While this is an important development in and of itself, the Court’s decision goes further than commenting on the multi-Crown class action model. Justice Karakatsanis’ majority opinion also delivered the Supreme Court’s first comprehensive endorsement of the national class actions model that – until now – had developed across Canada largely without the Supreme Court’s input.
British Columbia’s Opioid Damages and Health Care Costs Recovery Act
In August 2018, British Columbia launched a class action lawsuit against opioid drug manufacturers, wholesalers, and distributors, alleging that their marketing practices had contributed to the opioid addiction epidemic and harmed the public health care system.[1] In addition, later in 2018, B.C. enacted the Opioid Damages and Health Care Costs Recovery Act, SBC 2018, c 35 (“ORA”). The ORA was modelled on prior tobacco health care cost recovery legislation. Like the precursor tobacco cost recovery legislation, the ORA creates a direct cause of action allowing the B.C. government to sue opioid makers and distributors to recover added health care costs and other damages created by the opioid addiction crisis. Such a legislative mechanism for cost recovery was upheld as constitutional by the Supreme Court in British Columbia v Imperial Tobacco, 2005 SCC 49 (“Imperial Tobacco”).
The ORA included one key provision which was not featured in the earlier tobacco legislation: the multi-Crown class action provision. Specifically, section 11 of the ORA provides that any ongoing B.C. government lawsuit in relation to an opioid-related wrong may be brought as a class action on behalf of all other provincial, territorial, and federal governments who choose not to opt-out. This mechanism avoids the need for each government in Canada to bring a duplicative action against the same defendants for the same conduct and harms, resulting in judicial economy and efficiency, and creating the opportunity for a single binding adjudication of the issues. These benefits are an echo of those which underpin the development of national class actions more broadly.
Notably, since B.C. enacted the ORA in 2018, virtually all provinces and territories in Canada have enacted opioid cost-recovery legislation which is functionally identical to the ORA.
In Sanis Health, a collection of pharmaceutical manufacturers and distributors named as defendants in B.C.’s opioid class action sought to challenge the multi-Crown class action provision. The defendants argued that s. 11 of the ORA was unconstitutional because it was an extraterritorial attempt by the B.C. government to determine the substantive civil rights of other Canadian governments. In response, B.C. argued that the provision simply created a procedural mechanism and was an appropriate exercise of the province’s jurisdiction over the “Administration of Justice in the Province” under s 92(14) of the Constitution Act, 1867 (UK), 30 & 31 Vict, c 3.
The provision was upheld as constitutional by the B.C. Supreme Court, the B.C. Court of Appeal, and ultimately by the Supreme Court in a 6-1 ruling (with Justice Coté dissenting).
The Supreme Court’s Decision
In upholding s. 11 of the ORA, Justice Karakatsanis described the multi-Crown class action model, and national class actions in general, as a manifestation of “cooperative federalism” and recognized that such flexible tools are necessary to “ensure that justice is not blocked by provincial borders” (at paras 1-2).
Justice Karakatsanis applied the two-part framework established in Imperial Tobacco for determining whether provincial legislation is extraterritorial or not properly “in the Province” as required by s 92 of the Constitution Act, 1867. First, the court must characterize and classify the provision, and second, determine whether the provision respects the territoriality of the other provinces.
The Appellants argued that the provision should be classified under the province’s s 92(13) power over “Property and Civil Rights” because it created substantive rights for the B.C. Crown to act as a representative plaintiff on behalf of “foreign” Crowns. They further argued that, in effect, the provision deprived other Crowns of their “litigation autonomy” (or the rights of the provincial, territorial, and federal Crowns to initiate and direct litigation, at para. 61), by forcing them to choose whether to opt in or out of a class action led by another Crown and binding their successors to adhere to this choice.
Justice Karakatsanis rejected both arguments, notably finding that the B.C. Crown already had the right to bring a multi-Crown class action under the Class Proceedings Act, RSBC 1996, c 50 (“CPA”). She concluded the s. 11 provision, like the CPA, was purely procedural in nature, and served only to dictate that the existing opioid class action would proceed as a multi-Crown class action. Moreover, she observed that Crowns regularly bind their successors and cede elements of their litigation autonomy, for instance by choosing to litigate in a foreign jurisdiction. She held that the choice to opt in or out of a class action was itself a legitimate exercise of litigation autonomy. Thus, the provision was properly classified under s. 92(14), the power over the administration of justice, and in purpose and effect was purely procedural.
In considering whether s. 11 respected other provinces’ territoriality, the Supreme Court applied a two-part test, asking: a) whether the provision has a meaningful connection to the enacting province and b) whether the provision respects the legislative sovereignty of other territories.
The Supreme Court found both criteria were met. Section 11 has a meaningful connection to B.C. “both through the nature of the class action, and through the choice of the foreign Crowns to participate in the proceeding” (at para 88). Justice Karakatsanis drew a connection to the jurisprudence upholding the constitutionality of national class actions, discussed further below. Finally, Karakatsanis J. held that the provision respects the legislative sovereignty of other territories by providing the opportunity to opt out. As held earlier, the fact that the choice to opt in or out binds a Crown does not undermine its sovereignty. Rather, the provision facilitates intergovernmental cooperation, the benefits of which are reflected by the fact that nearly every provincial and territorial government is participating in B.C.’s opioid class action and intervened in Sanis Health in support of the legislation.
The Supreme Court’s Endorsement of National Class Actions
National class actions are a now a well-established feature of the class actions landscape in Canada, but there has been significant debate about whether the current model operates within the constitutional limits of the authority of provincial courts. Specifically, commentators have questioned whether a class action brought in one province can cover non-residents whose claims have no ties to the home province of the action. Appellate courts have repeatedly affirmed the validity of this inclusive model, but the Supreme Court had not weighed in on this debate until now.
Prior to Sanis Health, several provincial appellate-level courts heard challenges to multi-jurisdictional class actions that included non-resident class members who had no connection to the province, either on the grounds that jurisdiction was not established or that the class proceedings statute which enabled such an action was ultra vires. The courts arrived at a judicial consensus that the jurisdictional "real and substantial connection" test can be met in the class action context because (a) the resident plaintiffs have a real and substantial (or meaningful) connection to the province and (b) the common issues between the resident plaintiffs extend that connection to the whole class.
However, some commentators have argued that something more should be required to meet the "real and substantial" standard than common issues. For instance, Peter Hogg and Gordon McKee argued in a 2010 article that, for provinces with an “opt-out” framework (i.e. most provinces), each non-resident class member would need to have a claim with a real and substantial connection to the forum province in order to be properly within the constitutional limits of a provincial courts’ authority.[2]
The Appellants in Sanis Health made similar arguments that s. 11 was ultra vires because it would enable a B.C. court to adjudicate “the substantive claims of foreign Crowns, for alleged wrongs occurring in foreign provinces and territories, according to foreign law,” without any meaningful connection the province (at para 87).
In rejecting this argument, the Supreme Court recognized the broader dangers this argument presented to the constitutional underpinnings of national class actions, holding: “Accepting the appellants’ arguments on this point would contradict decades of established jurisprudence affirming that superior courts can preside over class actions that are national in scope” (at para 93).
The Supreme Court took pains to emphasize the value of national class actions as “an increasingly important vehicle for many Canadians to access justice in the modern world” (at para 93). The Court observed that national class actions “help Canadians to deal with products, people, and problems that cross jurisdictional boundaries” (at para 17) while furthering the three underlying goals of class actions proceedings: judicial economy, access to justice, and behaviour modification.
Although Coté J observed sharply in her dissent that the constitutionality of national class actions was not an issue squarely before the Court, the majority nonetheless commented on the jurisprudence developed by provincial appellate courts across Canada and provided their fulsome approval. Noting that the Supreme Court has previously endorsed class actions that were multi-jurisdictional in nature, Karakatsanis J. cited the leading decisions and agreed that “the common issues shared between the non-resident class plaintiffs and the resident representative plaintiff suffice to establish a real and substantial connection for adjudicatory jurisdiction over the class" (at para 90).
Conclusion
At first glance, the Supreme Court’s decision in Sanis Health may appear to be minimally impactful. The decision does not fundamentally alter the world of class actions and upholds a law that applies to a single lawsuit. However, Sanis Health paves the way for other multi-Crown class actions in the future, a critical tool for governments seeking to hold multi-national corporate defendants to account. For example, in 2024, B.C. introduced Bill 12, the Public Health Accountability and Cost Recovery Act, which would have created a broad, non-industry-specific public health cost recovery mechanism.[3] Potential targets alluded to were social media companies and companies that market vapes to youth. The bill has since been shelved pending government discussions with social media companies,[4] but it nonetheless demonstrates the broad potential of multi-Crown class actions.
In addition, the Supreme Court’s affirmation of the national class actions model has averted a potential crisis in the viability of this model. Had the Court ruled that s. 11 was ultra vires because there was no meaningful connection between a B.C.-based class action and foreign Crowns with foreign claims, the constitutional validity of all national class actions would have been called into doubt. However, as the Supreme Court recognized, national class actions are a necessary tool for the efficient prosecution of an increasing number of border-crossing legal problems in our modern, interconnected world.
[2] Peter W. Hogg & S. Gordon McKee, “Are National Class Actions Constitutional?” (2010) 26 NJCL 279.
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