Canada’s Opioid Litigation Ruling: BC Takes on Big Pharma Over Opioid Crisis

On November 29th, 2024, the Supreme Court of Canada ruled that a provincial statute allowing British Columbia (BC) to bring a class action against pharmaceutical companies for contributing to the opioid crisis on behalf of multiple governments in Canada is constitutional. The Court made this ruling when dismissing the defendants’ appeal in Sanis Health Inc. v. British Columbia, 2024 SCC 40.

Factual Background of the Case

In 2018, BC filed a lawsuit against pharmaceutical companies that manufacture, distribute and market opioid products in Canada. BC alleged that these companies continued to fuel the harm of the opioid epidemic and sought to recover damages for healthcare, pharmaceutical and treatment costs related to opioids on its behalf and on behalf of other governments and agencies in Canada.

The government of BC argued that every territory and province had experienced rising numbers of opioid-related deaths, addictions and illnesses. Since their first suit in the application court, BC maintained that the defendants contributed to the country’s opioid crisis by falsely marketing their drugs as being less prone to abuse and less addictive than other pain medications.

However, some of the companies challenged the government of BC for trying to bring a class action on behalf of other federal, provincial and territorial agencies and governments that pay for treatment and care related to the opioid crisis.

The last appeal by Sanis Health Inc., McKesson Canada Corp., Sandoz Canada Inc. and Shoppers Drug Mart Inc. was dismissed on Friday last week by the Supreme Court, confirming BC’s ability to bring a class action against the defendants on behalf of other Canadian governments and agencies.

The Bone of Contention in the Case: Legislative Sovereignty

BC asked the Supreme Court to certify the case as a class action, allowing it to act as the representative plaintiff on behalf of all provincial, federal and territorial governments and agencies that paid pharmaceutical, healthcare and treatment costs related to opioids.

Section 11 of BC’s Opioid Damages and Health Care Costs Recovery Act (ARO) allows BC to bring a class action on behalf of multiple governments, but allows such governments to either consent or opt out of the proceeding. The defendants filed their applications in the Supreme Court, arguing that Section 11 of the ARO is unconstitutional. They argued that it does not respect the territorial limits of BC’s power and undermines the sovereignty of other Canadian governments.

The application judge dismissed the defendants’ applications on the grounds that Section 11 of the ARO is basically a procedural mechanism to allow BC to act on behalf of other governments in cases involving opioid-related wrongs. The Court concluded that Section 11 fell within BC’s constitutional authority to legislate regarding the administration of justice in the province. The Court also held that Section 11 respects the territorial limits of the province’s authority, as it only affects other governments if they consent to participate in the proceeding.

In dismissing the defendants’ appeal, the Court of Appeal upheld the finding of the application judge that Section 11 of the ARO only sought to create a procedural mechanism. The defendants appealed to the Supreme Court.

The Supreme Court’s Opioid Litigation Ruling

The defendant pharmaceutical companies wanted the Supreme Court to examine the decisions of the two lower courts that confirmed BC’s right to act on behalf of multiple governments per the provisions of the ORA. In a 6–1 decision, the Supreme Court of Canada upheld the findings of the two lower courts and dismissed the defendants’ final appeal.

Writing for the majority, Justice Karakatsanis found that Section 11 of the ARO is constitutional and within the authority of the province of BC. He concluded that the lower courts were correct in finding that Section 11 was intended to provide a mechanism for the application of the ARO to opioid-related proceedings.

According to the Court, Section 11 does not deal with substantive rights. It is meaningfully within the authority of BC and respects the legislative authority of other Canadian governments. The Court found that Section 11 is properly classified under Section 92 (14) of the Constitution Act 1867, which grants Canadian provinces authority to enact legislation in relation to the administration of justice in the respective province.

“In the complex modern world where governments assume greater regulatory roles in multifaceted areas that overlap jurisdictional boundaries, there arises a greater need for cooperation between governments and courts that cross those borders. National class actions ensure that justice is not blocked by provincial borders. The opioid epidemic is a stark example of a crisis that should attract comity and cooperation,” Justice Karakatsanis wrote for the majority.

However, in her dissenting opinion, Justice Suzanne Côté raised concerns about the legislative sovereignty of other Canadian provinces. She found that “while cooperation between governments is a laudable goal, the method must be consistent with the structure of Canadian federalism, no matter how advantageous it may be to encroach on the jurisdiction of other governments in any given case”.

What’s Next?

Since the Supreme Court’s ruling was about jurisdiction and not the merit of the case, the allegations made by BC are yet to be proven in court. The Court only confirmed that the province of BC can act as the representative plaintiff on behalf of other governments and agencies in Canada in the class action against the defendant pharmaceutical companies for damages on allegations they contributed to the opioid crisis.

The class action is currently awaiting certification. If certified, the lawsuit will proceed as a civil trial at the BC Supreme Court. At this stage, BC will have to argue its case and prove the allegations made against the defendants.

The BC Attorney General Niki Sharma made a statement that the government of BC will continue to fight on behalf of its citizens and all Canadians until a final resolution is reached. She also encouraged the defendants to reflect and consider their role in the opioid crisis and to work collaboratively with the government of BC to make amends.

BC as the Guardian of Public Health

The Government of BC has always been at the forefront of promoting public health at both provincial and national levels. Besides suing big pharma for contributing to Canada’s opioid crisis, the province was also the first province to sue tobacco companies for recovery of damages over healthcare costs related to smoking.

When other provinces followed suit, tobacco companies sought creditors’ protection in 2019 and entered into negotiations for a settlement with the provinces. In October 2024, these tobacco companies proposed $32.5 billion to settle all legal claims in Canada.

Source: JURIST News

References:

British Columbia government website
Supreme Court of Canada