Supreme Court Approves Constitutionality of Multi-Crown Class Action

Written By Gannon Beaulne and Edward Hulshof

The Supreme Court of Canada (SCC) has endorsed the constitutionality of British Columbia (BC) legislation empowering the province to seek recovery of opioid epidemic healthcare costs in a proposed class action brought on behalf of multiple Canadian governments.

In Sanis Health Inc v British Columbia, 2024 SCC 40, a majority of the SCC held that constitutional territorial limits on provincial legislative competence did not prevent BC from creating a direct statutory cause of action that it can pursue in a proposed class action on behalf of the federal and other provincial governments, subject to the right to opt out of the proceeding.

In reaching that conclusion, the majority reflected on the benefits of national class actions in Canada—where no national procedural mechanism comparable to the multi-district litigation process in the United States exists—to simplify the aggregation, prosecution, and determination of claims spanning geographic boundaries. It is the SCC’s strongest endorsement of the constitutionality of a national opt-out class action administered out of a single province.

While its effect on legislative agendas and healthcare-cost recovery litigation remains to be seen, Sanis may offer “proof of concept” for national multi-Crown class actions and encourage more ambitious legislative action going forward.

Background

In Sanis, BC commenced a proposed class action against 49 manufacturers, marketers and distributors of opioid products. It alleged that the defendants had falsely marketed their products as less addictive and less prone to abuse, tolerance and withdrawal than other pain medications.

Soon after, BC passed the Opioid Damages and Health Care Costs Recovery Act, SBC 2018, c 34 (ORA). The ORA creates a direct statutory cause of action permitting BC to pursue recovery of healthcare costs caused by an “opioid-related wrong” by bringing or continuing a proposed class action on behalf of a class of one or more of the federal government and other provinces.

The ORA introduces new evidentiary rules and other procedural mechanisms modeled on former legislation in BC that targeted tobacco healthcare costs, the constitutional validity of which the Supreme Court confirmed in British Columbia v Imperial Tobacco Ltd, 2005 SCC 49. For example, the ORA allows statistical evidence to prove causation, relieves the government from proving the cause of any given person’s opioid-related injuries, and requires the court to presume that those people would not have used opioids without the actions of the defendants.

But the ORA then goes further. It empowers BC to sue for opioid-related wrongs on behalf of other Canadian governments under section 11(1).

Subsection (2) of the same provision recognizes the right of each class member to opt out of the proceeding under BC class actions legislation.

Once the ORA came into force, BC amended its claim to incorporate section 11. It proposed two subclasses of plaintiffs (a) for governments relying on common law and Competition Act causes of action, and (b) for governments with legislation directed at recovery of healthcare costs arising from the opioid epidemic.

Certain pharmaceutical companies challenged section 11 as ultra vires the legislature of BC, arguing that the provision deals with property and civil rights in other provinces, taking the provision outside the province’s legislative competence under section 92(13) of the Constitution Act, 1867.

Procedural Background

The BC Supreme Court dismissed the constitutional challenge. The court found that section 11 of the ORA is a “procedural mechanism” that facilitates claims by extraterritorial governments in the BC court, keeping it within the competence of the provincial legislature under its authority to legislate about the “Administration of Justice in the Province”. The court also found that section 11 negates any concerns about trespassing on other governments’ legislative sovereignty given their ability to choose whether to participate.

The BC Court of Appeal dismissed the appeal. It held that section 11 does not affect substantive rights. Rather, it is a “a bold step, if not an experiment” in the realm of national class actions which was intra vires the province.

The Supreme Court of Canada Decision

By a 6-1 majority, the Supreme Court of Canada dismissed the appeal.

Writing for the majority, Justice Karakatsanis applied the two-part framework established in Imperial Tobacco. That framework involves determining (a) the “main thrust, or dominant purpose or most important characteristic” of the law (its “pith and substance”), and (b) whether the challenged legislation respects territorial limits under 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 BC 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 BC Class Proceedings Act.

The majority viewed section 11 through the interpretive lens of “cooperative federalism”. The provision facilitates cooperation among Crowns in collectively pursuing individual claims. The majority thus endorsed the intergovernmental cooperation and interjurisdictional comity needed to respond to the nationwide character of the opioid epidemic. That spirit of cooperation was evidenced by interventions in the appeal by other provinces in support of the BC position.

Echoing lower court findings, the majority accepted that the pith and substance of section 11 is providing a procedural mechanism for the administration of justice, within the meaning of section 92(14) of the Constitution Act, 1867. The majority also underscored previous class action case law about the validity of “opt-out” regimes as sufficient to safeguard class member autonomy. As a result, the majority 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 reached different conclusions on the effects of the provision and its pith and substance. In her opinion, section 11 is about legislating property and civil rights, largely because it includes by default other provincial governments and the federal government in the proposed class. “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.”

Looking Forward

Following the SCC’s decision, the province’s class action against the various opioid manufacturers was certified on January 22, 2025 (British Columbia v Apotex Inc, 2025 BCSC 92). The SCC’s endorsement of the constitutionality of the ORA, while significant, overcomes only one of several challenges that the action will face at trial—or at an appeal of the certification decision. While the province will benefit from evidentiary advantages under the ORA, on application by the defendants, the court may order discovery of a statistically meaningful sample of health care records to help test the merits of the province’s claims.

It is unclear whether other provinces will forgo claims under their respective statutes while the Sanis action progresses through the BC court system.

In any event, Sanis signals that provincial legislative frameworks for coordinated healthcare cost recovery litigation can survive constitutional challenges and provide a mechanism for addressing claims that transcend provincial borders.

Indeed, Sanis may open the door to other legislative initiatives. For example, former Bill 12 in BC (which is currently on pause and would have put in place the Public Health Accountability and Cost Recovery Act) may receive renewed interest after Sanis, and it has the potential to affect a broad range of parties, interests and industries going beyond tobacco and opioids.

Download PDF