18 Dec Death of a destructive lawsuit

The Supreme Court of Canada refusal to hear the Cape Breton Regional Municipality’s equalization lawsuit was not as predictable as the rising of the sun this morning. But it was close.

The lawsuit was cynical ploy by a mayor who likes to posture as a scrapper for the little guy, but refuses to do the hard work needed to reach political solutions to the little guy’s problems.

• Contrary to popular belief, even a total victory for CBRM would not have brought the municipality a single dime. It didn’t even ask for money.
• In any case, the lawsuit had no chance of success. Aside from Mayor John Morgan and his pricey Toronto constitutional lawyer, Contrarian has been unable to find a single lawyer who thought it had any chance of success.
• Although the case suffered a mercifully early death—it was thrown out before trial—the mayor’s insistence on appealing to the highest court in the land frittered away at least $500,000 in legal bills, and wasted three five years that could better have been spent seeking a political solution. During that time, CBRM ran up another $60 million $100 million in debt its citizens cannot afford.
• The mayor now says he will seek a political solution, but he is playing a weaker hand, having demonstrated that his constitutional claims lack legal validity.

I believe the municipality has a case for greater provincial assistance in meeting basic service needs. I hope the Dexter Government, financially strapped as it is, gives the problem a fair hearing. But the mayor’s legal adventure not only delayed a solution, it encouraged the worst impulses of Cape Breton’s culture of dependency, and it reinforced the rest of the world’s weary stereotype of Cape Bretoners as people with their hands out. In all these respects, it did a disservice to the very citizens Morgan claims to champion.

Elaboration after the jump.

Just how weak was the mayor’s case?

Nova Scotia courts are traditionally loathe to throw out cases before trial. They operate on the assumption that every litigant deserves his day in court. To throw out CBRM’s case before trial, Mr. Justice John Murphy had to assume that all the facts alleged by municipality were true. Then he had to determine that, even so, the suit was “certain to fail” because it contained “a radical defect.” He had to decide that it was ”on its face… absolutely unsustainable.” He had to conclude that it had “no chance of succeeding.”

That’s exactly what he concluded. The Nova Scotia Court of Appeal unanimously upheld his decision. The Supreme Court of Canada declined to hear a further appeal. In the annals of weak cases, this was a trifecta.

Mayor Morgan’s reaction? He accused Judge Murphy, and Nova Scotia judges generally, of political bias. (With typical recklessness, he accused Murphy, a Liberal appointee, of bias in favor of the Conservatives.)

Why was Morgan’s case so weak?

CBRM’s case rested on an absurd leap of logic. CBRM contended that the Equalization provision of Canada’s constitution require the province to provide greater financial support to CBRM.

Let’s look at the equalization provision, Section 36 of the Constitution Act. It commits the government of Canada “to the principle of making equalization payments to ensure that provincial governments have sufficient revenues to provide reasonably comparable levels of public services at reasonably comparable levels of taxation.”

It commits the federal government to a principle. It doesn’t commit the provinces to anything, and it doesn’t even mention municipalities.

Had the case succeeded, what would CBRM have won?

Not a nickle. The lawsuit did not seek debt relief. It did not ask additional funding. It asked only for “a declaration that the Government of Nova Scotia has not complied with its commitments under s.36 of the Constitution Act.”

The suit didn’t even ask the court to determine what Nova Scotia’s constitutional commitment means. It didn’t ask the court to tell the province what it must do to fulfill its obligations. It did not challenge the constitutionality or the validity of the Municipal Grants Act or any other act of the Nova Scotia legislature. All is asked was a declaration that the province is not in compliance with the constitution. That’s all Morgan could have won had the case succeeded.

It failed.