Date: 20070209
Docket: T-1976-06
Citation: 2007 FC 154
BETWEEN:
CANADIAN GENERIC
PHARMACEUTICAL ASSOCIATION
Applicant
and
THE GOVERNOR IN COUNCIL, THE
MINISTER OF HEALTH and
THE ATTORNEY GENERAL OF CANADA
Respondents
REASONS FOR
ORDERS
HARRINGTON J.
[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
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