Health Canada determined that Texas-based LE-VEL BRANDS, LLC (“Le-Vel”), broke the law by selling its weight loss products to Canadians without seeking product licenses for their natural health products. The products had been distributed in Canada for some time, and Health Canada had flagged no health concerns. In deciding to issue a stop-sale order, Health Canada relied upon Le-Vel’s foreign marketing materials to determine the nature of its products.
In response to the order, Le-Vel launched an application for judicial review challenging the reasonableness of Health Canada’s decision by, inter alia, taking the position that its product was not a “natural health product” and that foreign marketing materials were not relevant to Health Canada’s decision.
The judicial review hearing was postponed pending a motion for leave to intervene on behalf of the Canadian Health Food Association (CHFA) and the Direct Sellers Association of Canada (DSA) in support Le-Vel’s position. Failure to demonstrate usefulness is the most frequent reason why intervention motions fail, and this is precisely why the CHFA’s and DSA’s applications failed.
CHFA and DSA could not satisfy the requirement of usefulness, as they urged the Court to adopt its own interpretation of the legislation that would make the legislation reasonable and give their member companies certainty, predictability, and clarity. However, the Court cannot and will not impose on Health Canada its own interpretation of the legislation or the objectives the proposed interveners suggest. The Court’s role in judicial review is limited to assessing the reasonableness of the interpretation of the Regulations expressly or impliedly adopted by Health Canada.
The Court agreed with Health Canada that the intended submissions made on behalf of DSA and CHFA largely duplicated those of the appellants, Le-Vel, and accordingly were not useful. According to Justice David Stratas of the Federal Court of Appeal, the takeaway for interveners like the DSA and CHFA is the necessity of understanding the judiciary’s proper role and showing how they can help the Court on the real issues in a case.
The more important takeaway for organizations selling products in Canada is that currently, Health Canada can and will look at marketing materials used for marketing their products outside of Canada. Those claims may be used to determine whether your products require a license for sale in Canada. Whether the foreign marketing materials are complaint with the jurisdiction in which they are used or whether such materials are directed to Canadians is irrelevant so long as Health Canada can access them when making their decisions. Casting a wide net on information Health Canada deems relevant to deciding on whether a product license is needed will have wide-ranging impacts on the industry, including creating the need to thoroughly review marketing materials for organizations globally. Alternatively, it may stifle the entry of such organizations into the Canadian market, offering fewer product choices for Canadians.
Time will tell whether the Court will further scrutinize this approach taken by Health Canada.
If you require assistance with the regulatory regime governing product licenses, don’t hesitate to contact Wendy Hulton and Sanjukta Tole at Dickinson Wright LLP.
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