Docket: T-1976-06
BETWEEN:
PHARMACEUTICAL ASSOCIATION
and
THE GOVERNOR IN COUNCIL, THE MINISTER OF HEALTH and
THE ATTORNEY GENERAL OF CANADA
REASONS FOR ORDERS
[1] These two motions, one heard immediately following the other, deal with the matter of standing; the right to participate in legal proceedings as a party or as an intervener.
[2] Last year, Her Excellency the Governor General in Council, on recommendation of the Minister of Health, made “Regulations Amending the Food and Drug Regulations (Data Protection)”. The amendments are said to implement Article 1711 of the North American Free Trade Agreement and paragraph 3 of Article 39 of the Agreement on Trade-Related Aspects of International Property Rights (TRIPS) set out in the World Trade Organization Agreement. The regulatory impact analysis statement says the amendments provide new drugs with an internationally competitive guaranteed minimum period of market exclusivity of eight years, with an additional six months of data protection if there have been certain clinical trials.
[3] The Canadian Generic Pharmaceutical Association is an industry association representing most Canadian generic drug manufacturers. Their drugs are approved by comparison with a drug which is already on the market, subject to patent rights as set out in the Patented Medicine (Notice of Compliance) Regulations.
[4] The Association has filed an application for judicial review in which it seeks an order that the Regulations are ultra vires and of no force and effect. It says that section 30(3) of the Food and Drug Act only confers power on the Governor in Council to make regulations for the purpose of implementing Article 1711 of NAFTA and paragraph 3 of Article 39 of TRIPS. It alleges that the 2006 Data Protection Regulations are beyond the regulatory making authority granted by Parliament. Furthermore, it submits the Regulations are unconstitutional in the sense that in pith and substance they relate to property and civil rights, a provincial legislative class of subject.
[5] The respondents have reacted by moving for an order striking the notice of application for judicial review on the grounds that the Association has no standing. It is not a drug manufacturer and the Regulations cannot possibly apply to it. It has no genuine interest and is not a party “directly affected” within the meaning of section 18.1 of the Federal Courts Act.
[6] The Association responds in three ways. Its says:
a. It has a genuine interest and is a party directly affected by the Regulations.
b. In the alternative, it should have standing as a matter of public interest.
c. The practice of this Court in applications for judicial review is to leave the question of standing to the judge who hears the application on the merits.
[7] Another association, which I shall call the “Innovators”, Canada’s Research-Based Pharmaceutical Companies, seeks leave to intervene. It supports the validity of the Regulations. The Canadian Generic Pharmaceutical Association opposes its intervention on the grounds that it has nothing to add to the debate. The respondents, hopeful that their motion to strike will be granted, take the position that there will be no proceedings in which to intervene. However, if they are unsuccessful, they do not oppose the Innovators’ intervention.
ISSUES
[8] Treating the two motions together, there are five issues:
a. Does the Canadian Generic Pharmaceutical Association have sufficient standing to bring on this application for judicial review?
b. If so, is the application premature?
c. Is there sufficient public interest to give the Association standing?
d. Should the issue of standing be determined now, or should it be heard together with the application on the merits? and
e. Is it appropriate to allow Canada’s Research-Based Pharmaceutical Companies to intervene?
DISCUSSION
Standing
[9] Section 18.1(1) of the Federal Courts Act permits the Attorney General or “anyone directly affected by the matter in respect of which relief is sought” to bring on an application for judicial review. It is well established that the Federal Court has jurisdiction over this matter in that a regulation is a decision of a “federal board, commission or tribunal” within the meaning of the Act.
[10] The Minister points out that the disputed Regulations are narrow in scope and are only directed at certain drug manufacturers. The Association itself is not a drug manufacturer, although its members are.
[11] The Minister has brought forth an impressive array of jurisprudence in support of the proposition that in circumstances such as these an association of persons who are directly affected by a decision does not in and of itself have sufficient standing to act as an applicant. Reliance is placed on the decision of the Federal Court of Appeal in Independent Contractors & Business Association v. Canada (Minister of Labour), [1998] F.C.J. No. 352 (QL), which dealt with a challenge to a decision imposing new general terms and conditions for government construction contracts. The Court ruled that the contractors themselves had standing, but the association did not. As stated by Mr. Justice Stone at paragraph 30:
…the Association simply lacks standing to attack that decision by way of judicial review. It is not itself in the construction business and is therefore in no position to bid on federal government contracts in British Columbia. It follows that the Association is not “directly affected” by the December 6, 1996 decision in the sense that it can neither benefit nor suffer any direct adverse impact from that decision.
[12] To the same effect are two concurrent decisions of Mr. Justice Gibson in Apotex Inc. v. Canada (Minister of National Health and Welfare), [1998] F.C.J. No. 1092 (QL) and [1998] F.C.J. No. 1096 (QL), affirmed on other grounds [1999] F.C.J. No. 1978 (QL).
[13] Although arising in an action, as opposed to an application, the Minister also referred to First Nations of Saskatchewan v. Canada (Attorney General), 2002 FCT 1001, [2002] F.C.J. No. 1324 (QL). Action had been taken by the federation, as well as by various First Nations and Indian bands and their members. Although Mr. Justice Hugessen found that the point raised in the motion was excessively technical and devoid of any real interest, he concluded that the federation lacked standing and so granted the motion to strike, but without costs.
[14] The Association argues that the respondents’ narrow approach is inappropriate. After all, it was in correspondence, on behalf of its members, with the Minister when a draft of the Regulations was in circulation.
[15] The Association also points out that the jurisprudence is not all one-sided and submits that winds of change are blowing. Reliance was placed on Alberta Liquor Store Association v. Alberta (Gaming and Liquor Commission), 2006 ABQB 904, a decision of the Alberta Court of Queens Bench where Mr. Justice Slatter stated at paragraph 20:
The refusal of the court to recognize the standing of collective organizations, on the basis that only the members of the organization are “aggrieved”, is somewhat formalistic. The courts increasingly recognize the validity, and indeed the desirability, of collection action. The law recognizes the legitimacy of a number of entrepreneurs combining their resources to carry on a business. There is no reason why the court should refuse to recognize the legitimacy of a number of aggrieved citizens combining together to form a collective entity to advance their grievances.
[16] The Court in that case referred to the earlier decision of the British Columbia Supreme Court in Greater Victoria Concerned Citizens Association et al. v. Provincial Capital Commission et al. (1990), 46 Admin. L.R. 74.
[17] Although perhaps more relevant to the issue of whether the attack on the validity of the Regulations is premature, the Association also referred to the decision of Mr. Justice Pelletier in Moresby Explorers Ltd. v. Canada (Attorney General), 2006 FCA 144. He said at paragraph 17:
Standing is a device used by the courts to discourage litigation by officious inter-meddlers. It is not intended to be a pre-emptive determination that a litigant has no valid cause of action. There is a distinction to be drawn between one’s entitlement to a remedy and one’s right to raise a justiciable issue.
This was a case where a party could be affected by a matter, but not at the time the application was made. The Court of appeal refused to strike, stating at paragraph 19:
It is clear that the appellants are within the intendment of the policies which they challenge, even if those policies have no application to them at the moment. They raise a question which is suitable for judicial determination and in respect of which they have an interest of “the required nature and extent”.
The Association is not an officious inter-meddler.
[18] Finally, as shall be discussed later in these reasons, the Association submits that the question of standing should be held over and heard together with the application for judicial review on the merits.
IS THE APPLICATION PREMATURE?
[19] Closely connected with the Minister’s submission that the Association is not directly affected is the fact that it is the decision to enact the Regulations which is under attack, not a specific decision with respect to a specific drug submission. The Court is being called upon to determine the validity of the Regulations in a factual vacuum. It would be better if the validity of the Regulations were decided within the context of a submission to the Minister by a generic drug manufacturer which compared its drug to a drug already approved. This course of proceeding would have the added advantage that an innovator drug company which had already obtained approval for its drug would be named as a party respondent, together with the Minister.
[20] In my analysis, this point is subsumed into the issue of the Association having a public interest standing.
PUBLIC INTEREST STANDING
[21] A party seeking public interest standing must satisfy the following three requirements:
a. There is a serious issue to be tried;
b. It has a direct or genuine interest in the matter; and
c. There is no other reasonable and effective manner in which to bring the issue to court.
(Canadian Council of Churches v. Canada (Minister of Employment and Immigration), [1992] 1 S.C.R. 236 at paragraph 37).
[22] The only relevant affidavit evidence in the record so far is from the Association. The effect of the Regulations is to impose a multi-year ban preventing its members from filing an abbreviated new drug submission with the Minister and from obtaining a Notice of Compliance which is necessary in order to market their drug products. The Association estimates that the Regulations represent lost savings to the health care system of at least $500 million dollars. Although what is ultimately at issue is the validity of the Regulations, and not the view someone might take of them, the argument is that their validity should be determined as quickly as possible.
[23] The Minister is not attempting to isolate the vires of the Regulations from attack. As aforesaid, he submits that there is a better context. Although the Association may not be directly affected, it cannot be said that it does not have a genuine interest in the outcome. The Minister submits, however, that there is a better, more reasonable and effective manner in which to bring the validity of the Regulations to this Court, and that is by a generic drug manufacturer. When the Minister refuses to consider an abbreviated new drug submission, the generic drug manufacturer will then challenge that decision by way of judicial review.
[24] This may be a reasonable and effective method, although it can be argued that the Data Protection Regulations serve as a disincentive. A generic drug manufacturer is less inclined to develop what is sometimes called a “copycat” drug if it knows the Minister will not carry out a comparison study because of the new Regulations.
SHOULD THE MATTER BE DECIDED NOW?
[25] This point serves as the focus of the Association’s representations. An application for judicial review is supposed to be decided in a summary way. The Court discourages interlocutory motions in applications for judicial review. Nevertheless, applications for judicial review have been dismissed at the outset if bereft of any chance of success. This often happens where the Court has no jurisdiction, which is not the case here. Neither the Minister nor the Association was able to draw this Court’s attention to any decision in which an application for judicial review was struck at the outset because of lack of standing. The leading decision is that of the Federal Court of Appeal in David Bull Laboratories (Canada) Inc. v. Pharmacia Inc., [1995] 1 F.C. 588, which dealt with a motion to strike out what was then known as an originating notice of motion. The Motions Judge dismissed the motion. His discretion was upheld by the Federal Court of Appeal. Mr. Justice Strayer noted that the disposition of an application, as opposed to an action, does not involve discovery and trial. He said at paragraph 10:
Thus, the direct and proper way to contest an originating notice of motion which the respondent thinks to be without merit is to appear and argue at the hearing of the motion itself. This case well illustrates the waste of resources and time in adding on to what is supposed to be a summary judicial review proceeding…
DISPOSITION OF THE MOTION TO STRIKE
[26] It seems to me that the Association has raised serious issues. It is not plain and obvious to me that it lacks standing in its own right, or as informally representing a class of litigants, or that public interest mitigates against giving it standing. Consequently I shall dismiss the motion, without prejudice to the respondents taking the same points when the application for judicial review is heard on the merits.
[27] In the alternative, the respondents sought an order amending the style of cause by deleting “The Governor in Council” and “The Minister of Health” as respondents. Neither party argued this point in any depth. Section 48 of the Federal Courts Act provides that in proceedings against the Government the “Attorney General of Canada” is named. However, in notice of compliance proceedings the Minister of Health is inevitably named. I will strike out the “Governor in Council” as a respondent, leaving arguments with respect to the status of the Minister of Health as a party respondent to the hearing on the merits.
SHOULD CANADA’S RESEARCH-BASED PHARMACEUTICAL COMPANIES BE PERMITTED TO INTERVENE?
[28] As aforesaid, the Minister took the position that if the application was not struck at this time, he did not oppose the intervention. The Canadian Generic Pharmaceutical Association has opposed. It says that the strict requirements of rule 109 have not been met, that the proposed intervener has not set out a proposed course of action and that the application is premature in that the Minister has not yet delivered his affidavits. Alternatively, if the companies are permitted to intervene, their role should be restricted.
[29] There are a number of factors the Court should take into account in determining whether or not a third party intervention should be permitted. In Canadian Airlines International Ltd. v. Canada (Human Rights Commission)(2000), 95 A.C.W.S. (3d) 249, [2000] F.C.J. No. 220 (QL), the Federal Court of Appeal enumerated six non-exhaustive factors:
a. Is the proposed intervener directly affected?
b. Does there exist a justiciable issue or a veritable public interest?
c. Is there an apparent lack of any other reasonable means or efficient means to submit the questions to the Court?
d. Is the position of the proposed intervener adequately defended by one of the parties to the case?
e. Are the interests of justice better served by the intervention? and
f. Can the Court hear and decide the case on the merits without the help of the proposed intervener?
[30] The proposed intervener would be supporting the Government’s position. The Minister does not need its help in arguing the validity of the Regulations. On the other hand, the proposed intervener is as affected by the outcome as is the applicant. It also claims that it will bring a perspective to the underlying trade issues which will assist the Court. The Regulations purport to be in furtherance of Canada’s treaty obligations. The proposed intervener claims it would be in a better position to address the context and interpretation of these treaty obligations in the other countries affected. If it is appropriate that the Association can bring to the Court’s attention what it claims is a cost to the Canadian health care system of at least $500 million should these Regulations be valid, the proposed intervener submits the Court should also take into account the cost of research and development. Of course, as aforesaid, the issue ultimately before the Court is the validity of the Regulations, not the wisdom thereof as denounced by the generics and acclaimed by the innovators. Nevertheless, the treatment of Article 1711 of NAFTA in the United States and in Mexico, both by regulation and in the case law, may be of considerable importance. In Foscolo, Mango & Co., Ltd. et al v. Stag Line Ltd., [1932] A.C. 328, (1931), 41 Lloyd’s List L.R. 165, the House of Lords noted that domestic legislation giving effect to a treaty has, to use the words of Lord MacMillan “an international currency”.
[31] Not only would the companies complete the picture, but as the validity of the Regulations is challenged, the Attorneys General of each province are entitled as of right to intervene in accordance with section 57 of the Federal Courts Act.
[32] Both the applicant and the proposed intervener have been granted intervention status in other cases, including the recent decision of the Supreme Court in AstraZeneca Canada Inc. v. Canada (Minister of Health), 2006 SCC 49.
[33] Rule 109 provides that the Court may grant leave (emphasis added). Given that the respondents have not yet filed their material, I consider the proposed intervener has given sufficient detail of how it would participate. In my discretion I grant Canada’s Research-Based Pharmaceutical Companies intervener status. I shall order that they have the same status as if they were a party, including the right to cross-examine any affiant representing an adverse interest. However, I decline to give directions with respect to any right of appeal as I think it better that that issue, if, as, and when it arises, is better dealt with by the Federal Court of Appeal.
“Sean Harrington”
Ottawa, Ontario
February 9, 2007
FEDERAL COURT
SOLICITORS OF RECORD
DOCKET: T-1976-06
STYLE OF CAUSE: Canadian Generic Pharmaceutical Association v. The Governor in Council, The Minister of Health and The Attorney General of Canada
PLACE OF HEARING: Ottawa, Ontario
DATE OF HEARING: January 30, 2007
REASONS FOR ORDERS: HARRINGTON J.
APPEARANCES:
|
Mr. Edward Hore
|
|
|
Mr. Rick Woyiwada
|
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Mr. Martin Mason |
FOR THE PROPOSED INTERVENER |
SOLICITORS OF RECORD:
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Hazzard and Hore Barristers & Solicitors Toronto, Ontario
|
FOR THE APPLICANT |
|
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John H. Sims, Q.C. Deputy Attorney General of Canada
|
FOR THE RESPONDENTS |
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Gowling Lafleur Henderson LLP Barristers & Solicitors Ottawa, Ontario |
FOR THE PROPOSED INTERVENER |
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