Information Requests From Public Bodies

What is the responsibility of a public body to notify a third-party when a request for information is made? The Supreme Court of Canada considered this question in Merck Frosst Canada Ltd. v. Canada (Health), on appeal from the Federal Court, and released this week. Although the appellant’s appeal was dismissed by the court, they did highlight some areas of improvement for the drug application process.

A competitor of the appellant pharmaceutical company, Merck Frosst, requested information under the Access to Information Act about submissions Merck had made to Health Canada. The submissions were required under the Food and Drug Regulations to bring Merck’s Singulair® to market. They consisted of a New Drug Submission (“NDS”) and a Supplementary New Drug Submission (“SNDS”) that contained full and frank disclosure of all knowledge and information that the appellant had about the asthma drug, including list of ingredients, details of manufacture, tests for potency, purity, stability and safety, and detailed safety tests. Some of this information is eventually contained in the Product Monograph when the product is approved, but the contents are subject to discussions and negotiations between Health Canada and the pharmaceutical company.

Background

At issue was the appropriate balance between access to information for accountability and strengthening democracy, and private interests necessary to foster research and innovation. Justice Cromwell referenced Justice La Forest’s statement in Dagg v. Canada (Minister of Finance) to explain the purpose of the Access to Information Act,

61 The overarching purpose of access to information legislation, then, is to facilitate democracy. It does so in two related ways. It helps to ensure first, that citizens have the information required to participate meaningfully in the democratic process, and secondly, that politicians and bureaucrats remain accountable to the citizenry. As Professor Donald C. Rowat explains in his classic article, “How Much Administrative Secrecy?” (1965), 31 Can. J. of Econ. and Pol. Sci. 479, at p. 480:

 Parliament and the public cannot hope to call the Government to account without an adequate knowledge of what is going on; nor can they hope to participate in the decision-making process and contribute their talents to the formation of policy and legislation if that process is hidden from view.

 See also: Canadian Bar Association, Freedom of Information in Canada: A Model Bill (1979), at p. 6.

On receiving the information request from the appellant’s competitor, Health Canada identified 30 out of 550 NDS pages and 60 of 300 SNDS pages that could not be disclosed under s. 20(1) of the Act,

20. (1) Subject to this section, the head of a government institution shall refuse to disclose any record requested under this Act that contains

 (a) trade secrets of a third party;

 (b) financial, commercial, scientific or technical information that is confidential information supplied to a government institution by a third party and is treated consistently in a confidential manner by the third party;

 (c) information the disclosure of which could reasonably be expected to result in material financial loss or gain to, or could reasonably be expected to prejudice the competitive position of, a third party; …

The court noted that this section must be read in conjunction with substantive protections in s. 25,

25. Notwithstanding any other provision of this Act, where a request is made to a government institution for access to a record that the head of the institution is authorized to refuse to disclose under this Act by reason of information or other material contained in the record, the head of the institution shall disclose any part of the record that does not contain, and can reasonably be severed from any part that contains, any such information or material.

Health Canada notified the appellant of the request when it was made under s. 27(1), but Merck indicated that all of the NDS and SNDS information were confidential trade secrets subject to s. 20(1), with the exception of already published studies and the Product Monograph. Health Canada took this into consideration and made further redactions, but provided disclosure to the competitor. As a result, Merck filed for judicial review. Five decisions preceded the hearing before the Supreme Court.

On the initial application, Merck was successful in part. The Federal Court held that Health Canada could not disclose any part of the record without prior notice apart from a public document called a Notice of Compliance. A unanimous decision on appeal remitted the matter back to Federal Court over a misinterpretation of s. 20(1)(b).

The rehearing found that Health Canada should have conducted its own thorough review before putting the onus of refusing the disclosure on Merck. Health Canada agreed to conduct further redactions. Some trade secrets were found by the court in the submissions, and Merck successfully obtained a declaratory order over the lawfulness of the procedure followed.

The Federal Court of Appeals then concurrently heard two appeals and cross-appeals. A unanimous court upheld the appeals and dismissed the cross-appeals, and held that the notice obligation only arises where s. 20(1) information is contained, and disclosure without prior notice otherwise does not contravene the Act. The interpreted the trade secrets exemption narrowly and with a high threshold, and required direct and objective evidence to demonstrate confidential information. The court found that Merck did not provide sufficient evidence in this respect.

Decision

Justice Cromwell for the majority indicated that government institutions must make reasonable efforts to give third parties written notice of requests for disclosure except where a waiver has been made. He applied the “modern approach” of statutory interpretation, also referred to in the literature as the “informed interpretation approach” or “pragmatic dynamism,”

[64] …the words of a provision are to be read in their entire context and in their grammatical and ordinary sense, harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament…

He held that s. 27 created a low threshold to trigger the notice requirements, but rejected the appellant’s position that there as an automatic right to notice,

[64] …The grammatical and ordinary sense of s. 27(1) makes plain that notice is required only if certain conditions are met in the particular circumstances. The section does not refer to particular categories of documents but rather to particular types of information that are or may be contained in records otherwise subject to disclosure. The subsection sets out specific conditions precedent for engaging the notice requirement. As the Federal Court Trial Division put it in words that were endorsed by the Federal Court of Appeal: “The essential condition precedent to the issuance of the notice is that the respondent has reason to believe the disclosure of the record might be contrary to his obligation under section 20 not to disclose records”

He concluded at para. 84,

(i) With respect to third party information, the institutional head has equally important duties to disclose and not to disclose and must take both duties equally seriously.

(ii) The institutional head:

- should disclose third party information without notice only where the information is clearly subject to disclosure, that is, there is no reason to believe that it is exempt;

- should refuse to disclose third party information without notice where the information is clearly exempt, that is, where there is no reason to believe that the information is subject to disclosure.

(iii) The institutional head must give notice if he or she:

- is in doubt about whether the information is exempt, in other words if the case does not fall under the situations set out in point (ii);

- intends to disclose exempted material to serve the public interest pursuant to s. 20(6); or

- intends to disclose severed material pursuant to s. 25.

He noted that both parties took extreme positions and hoped for a more cooperative and constructive approach in the future, because the Act only functions when the parties cooperate. The institutional head cannot shift their responsibility on the third party and the third party must provide assistance in helping them carry out their duties,

[90] From the third party’s perspective, it is, of course, prudent and in accordance with common sense to be as helpful as it can be in identifying precisely why disclosure is not permitted. Nonetheless, the head must make a serious attempt, with the available information and having regard to the practical constraints, to discharge the responsibility imposed by the Act to apply the requirements to disclose or not disclose…

Eileen Vanderburgh of Alexander Holburn Beaudin & Lang LLP summarizes the relevance of the decision on the Information and Privacy Blog,

This decision confirms the obligations of a public body in dealing with requests for third party information and the rights and obligations of a third party seeking to restrict access to information it has supplied to a public body. In some cases private sector organizations can address their rights to notice of access requests for their information by way of contract, or by clearly advising the public body that it considers the information it is supplying to be confidential and within the category of information that is excepted from disclosure under any applicable access legislation, thereby triggering the obligation of the pubic body to provide notice. However, neither contract language nor statements of confidentiality will determine whether or not the records at issue are in fact excepted from disclosure.

 

 

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Comments

  1. The decision will also be of interest to IP lawyers generally and to those awaiting the Court’s rulings on the five pending copyright cases.

    See my quick take here:

    http://excesscopyright.blogspot.com/2012/02/supreme-court-of-canada-on-access-to.html

    Howard