Sobeys West: When professional regulatory bylaws are “unreasonable”

The BC Supreme Court has decided that the College of Pharmacists of British Columbia exceeded its bylaw-making power by unreasonably prohibiting pharmacists from participating in programs that provide incentives for patients to fill prescriptions at their pharmacies, in Sobeys West Inc. v. College of Pharmacists of British Columbia, 2014 BCSC 1414.

The College has appealed the ruling to the BC Court of Appeal.

Sobeys West Inc., the owner of Safeway, and Jace Holdings Ltd., the owner of Thrifty Foods, challenged a College bylaw that prohibited pharmacists from participating in incentive programs, whereby businesses give benefits to their pharmacy customers. The petitioners asserted the College’s bylaw was unreasonable, as the restrictive bylaw went “beyond what could be required to address the theoretical harms raised” by the College.

The College provided four affidavits, from four Board members, setting out harms that did or could result from incentive programs, of which the court listed five. [34] The court accepted that a bylaw response would be reasonable to address some of the issues. For example, “bonus days” where rewards would be multiplied on certain days could result in unmanageable workloads for on-duty pharmacists, and encourage customers to defer filling needed prescriptions until the next bonus days. [34-35] But the court also determined that some reasons were invalid.

For example, the College submitted evidence that, in relation to patients in need of daily dispensing, some pharmacists could retroactively dispense daily medication even where the patient had missed taking the drug for days, to generate further revenue, and patients would be motivated to participate to obtain a higher value incentive. [44] The court took issue with the College’s concern which assumed that pharmacies, pharmacists and pharmacy technicians could not be trusted to meet their ethical responsibilities. [45] As another example, the College submitted evidence of patients demanding prescription refills, despite drugs held on “IOU”, so that they could obtain more incentive points. [42] However, the Court decided that, where patients had to pay for their own prescriptions, this concern “defies common sense” (as prices far exceeded the value of the incentives offered), [47] and that where patients’ drugs are paid by benefits plans, pharmacists are obliged to “prevent and report the misuse or abuse of substances by customers.” [56] Ultimately the court found the bylaw was over-broad, harmful to the public interest in its net effect, and therefore unreasonable.

The law is clear that regulatory bodies, like all statutory actors, must exercise their powers – including their by-law making powers – in a “reasonable” fashion. The Legislature is presumed not to empower anyone to act unreasonably. However, where an exercise of power involves a balancing of various factors, including such factors as the public interest, “reasonableness” allows for a great deal of leeway. Notably, the court in Sobeys referred to a decision of the Supreme Court of Canada, in Catalyst Paper Corp. v. North Cowichan (District), 2012 SCC 2, [2012] 1 S.C.R. 5 (S.C.C.), where the court said, in relation to municipal bylaws, that, “[20] The decided cases support the view of the trial judge that, historically, courts have refused to overturn municipal bylaws unless they were found to be ‘aberrant’, ‘overwhelming’, or if ‘no reasonable body could have adopted them….’” A bylaw is thus unreasonable if no reasonable regulatory body would have adopted them.

The court found that many of the concerns that the College expressed as underlying its bylaw were wanting. But the court’s approach raises some puzzling issues. For example:

  • The court expressed its concern that the College’s affidavits, which set out issues of registrant misconduct relating to incentive programs, lacked corroboration from the College’s disciplinary records. However, such an expectation seems misplaced, since s. 53(2) the Health Professions Act, R.S.B.C. 1996, ch. 183, prohibits anyone from giving evidence in court about knowledge they gain in the exercise of a power or in the performance of a duty under Part 3 (“Inspections, Inquiries and Discipline”).
  • The court noted that the College provided affidavits from “only” four of its Board members, with the view of other Board members being unclear. [46] This approach is puzzling because a majority of the Board clearly passed the bylaw, and the validity of a regulatory concern should not depend on whether or to what extent supporting evidence flows specifically from a College’s board, especially since its composition changes regularly.
  • In relation to patients that may have an incentive to obtain excess drugs being paid for by others (e.g., by a benefits plan), the court was implicitly critical of a bylaw which presumes that “member pharmacies, pharmacists and pharmacy technicians cannot be trusted to meet their ethical responsibilities [45]. But action by a regulator to regulate a type of situation that might tempt registrants toward misconduct (if that be the case), or action to eliminate a class of situation where professionals would otherwise be required to police their patients [56], would seem to fall within the realm of “reasonable” approaches, even if other regulators might choose differently.

Apart from the issue of how the lower court approached the concerns the College presented as a basis for its bylaw, the case also raises a larger legal question for the Court of Appeal, concerning the power of a statutory regulator to enact bylaws that turn out to be overbroad. The concept of over-breadth often arises in cases involving the Charter of Rights and Freedoms, where courts must assess laws (that infringe Charter rights) to ensure both “minimal impairment,” and that the law’s effect is proportional to the law’s objective. However, these cases involve constitutionally-protected rights (e.g., the right of free speech), and not merely rights about how people may practice their profession.

Sobeys West Inc. v. College of Pharmacists of British Columbia, 2014 BCSC 1414

Lisa Fong and Michael Ng