Regulating regulations

The day of reckoning is here. Someone is finally taking Chipotle to court over skimpy burritos.

The restaurant chain recently promised a return to generous portions after admitting 10% of its locations held back ingredients. That ticked off shareholders, who say Chipotle concealed the extent of Skimpgate before tanking the stock by promising to make things right.

Chipotle’s not the only one under fire either. There’s also a proposed class action against Subway for serving sandwiches with less meat than depicted in advertisements.

Welcome to the war on shrinkflation.

— Dylan Gibbs

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• Challenging subordinate legislation

• The SCC’s translation response

• Lacklustre generative AI tools

• Shell’s climate litigation win

• Direct social media bans

• Indirect travel bans

DECISION SPOTLIGHT 🔦

Still an uphill battle to challenge regulations

Auer v. Auer, 2024 SCC 36
TransAlta v. Alberta, 2024 SCC 37

Lawmakers delegate all sorts of legislative powers. Municipal bylaws. Professional codes of conduct. Regulations. How should courts decide whether those subordinate rules are legal?

The Supreme Court’s most recent decisions clear up an appellate split over the proper test. And the Court’s high bar seems like it will keep the number of successful challenges low.

A bit of context: The Supreme Court carved out special treatment for regulations in Katz, saying courts should only interfere in “egregious” cases. Litigants could only strike down regulations completely unrelated to their enabling statute’s purpose. And it wasn’t much easier to strike down other types of subordinate legislation either:

Then came Vavilov.

Under the Court’s new “comprehensive approach” to admin law standards of review, administrative decisions usually just need to be reasonable. That made the unique hyper-deference applied to subordinate legislation seem out of place. And the apparent conflict split appellate courts.

The Alberta Court of Appeal applied Vavilov to most subordinate legislation — but not to regulations (where Katz was still king). The Federal Court of Appeal applied Vavilov full stop.

The Court’s decision: In unanimous reasons written by Justice Côté, the Supreme Court went with Vavilov across the board. Litigants no longer need to show that subordinate legislation is “completely unrelated” to its enabling statute’s purpose.

Here are the key takeaways:

• Vavilov is the starting point. Courts will typically ask whether a reasonable interpretation of the enabling statute authorizes the subordinate legislation under attack.

• Some cases have less margin for error (like when subordinate legislation is arguably unconstitutional). Administrators creating subordinate legislation need to get those interpretive questions correct.

• There’s no room to question the policy behind the subordinate legislation — courts shouldn’t be asking whether it’s necessary, wise, or effective.

What’s the process for interpreting the enabling statute? That’s where it looks like Katz has nine lives — the decision’s core principles still “inform the analysis”.

• Courts will presume subordinate legislation is valid, stacking the deck in favour of keeping the legislation in place.

• And they’ll read the enabling statute broadly, giving administrators latitude to interpret their authority.

According to Justice Côté, that’s no different than the approach to every other type of administrative decision.

But, if that’s the case, you might ask why the Court would even bother mentioning the principles from Katz. Using special principles for subordinate legislation sure makes it seem like there’s a higher bar.

How did the test play out in practice?

The SCC dealt with two appeals. Both came up short.

The appellant in Auer challenged the federal government’s Child Support Guidelines. Since the Divorce Act only authorizes child support rules premised on each spouse’s relative ability to pay, he argued the current rules should divide contributions equally between spouses.

Here’s how the Court saw it:

In TransAlta, a property tax rule singled certain power companies out for differential treatment, prohibiting them from claiming depreciation on their coal-fired facilities. The province had already paid the companies to move away from coal, so allowing depreciation would have let them double-dip.

The power companies argued the rule was unlawful — because subordinate legislation can’t discriminate unless its enabling statute says so.

The Court disagreed:

Looking ahead: The test didn’t seem to impact the two cases before the SCC, but things could play out differently in a couple of big cases coming down the pipes.

• In the plastics case, Justice Furlanetto struck down federal environmental regulations that unreasonably classified all manufactured plastic items as toxic. Canada appealed that decision to the Federal Court of Appeal, where a “broad and purposive” interpretation of the regulation-making power may or may not yield the same result.

• Alberta’s recently launched carbon tax challenge targets federal regulations that create an exemption for home heating oil. Part of the argument is that the regulations are unconstitutional. And Justice Côté’s reasons set the courts up to review that issue for correctness (good news for Alberta):

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BY THE NUMBERS

0: The number of pre-1970 decisions currently hosted on the SCC’s website. In response to the official languages commissioner ruling that everything on the Court’s website needs to be translated, the Court pulled older cases off the web. Don’t worry, you can still find them on CanLII. The Court will start translating its most “historically and jurisprudentially significant pre-1970 decisions” when it celebrates its 150th anniversary next year.

17: The proposed minimum age for TikTokers in Australia. The government is considering the world’s first national ban on social media, which would apply to anyone 16 or under (even if they have parental consent).

60%: The proportion of recent medical graduates who stay in Quebec to work after their studies. That’s too low for Premier François Legault’s government — which might force graduates to stick around using the notwithstanding clause. The potential legislation would require recent medical grads to pay back the cost of their training if they leave the province. Still unclear: whether Legault knows the notwithstanding clause doesn’t apply to the Charter’s mobility rights.

HEARSAY ROUNDUP

🚢 The federal government squashed another strike by forcing the parties to arbitration, ending the work stoppages at ports in BC and Montreal. Like the rail workers affected by a similar decision this summer, the affected union plans to challenge the government’s decision in court.

🤕 Tribunal Watch Ontario says the province’s Human Rights Tribunal is dysfunctional, calling it a “nightmare for people who seek redress”.

🫴 Quebec officially cracked down on tip culture in its new suite of consumer protection measures. If businesses suggest a percentage-based tip to customers, they can’t apply that percentage on top of taxes — the tip must be calculated on pre-tax amounts.

🛢️ Shell successfully appealed the landmark Dutch ruling that would have forced the oil giant to reduce its emissions 40% below 2016 levels. The Court accepted that EU citizens have the right to be free from dangerous climate change, but said it’s up to legislators to set exact targets for reducing emissions — not the courts.

🤖 UBC Professor Benjamin Perrin wasn’t impressed by LexisNexis’s new generative AI tool.

THINGS NOT TO DO 😤

Don’t be unreasonable. Justice Branch had strong words for a pair of time-wasting family litigants. And before you ask — no, the parties weren’t self-represented.

OBITER DICTA

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