Supreme Court clears way for B.C. to include other governments in opioid lawsuit

The Supreme Court of Canada is seen, Friday, June 16, 2023 in Ottawa. (Adrian Wyld / The Canadian Press)

B.C. Attorney General Niki Sharma says a Supreme Court of Canada victory has cleared a "pathway" for governments across the country to go after opioid makers and distributors for damages arising from the opioid crisis.

Canada's top court on Friday affirmed the constitutionality of a law allowing British Columbia to pursue a class-action lawsuit against opioid providers on behalf of other provinces, the territories and the federal government. 

The Supreme Court of Canada's 6-1 decision is another step toward a potential cross-country action by governments that paid to treat patients who took the addictive drugs.

Sharma told a news conference that it was "a significant victory" against opioid makers and distributors, who previously said the case could set a "template" for similar claims, likely involving "colossal financial claims."

Federal Mental Health and Addictions Minister Ya'ara Saks also applauded the ruling as a chance "to hold pharmaceutical companies to account."

"Canada intends to join this suit should it be certified," Saks said in a social media post. "We’ve taken action to crackdown on the predatory practices of the pharmaceutical industry."

Section 11 of B.C.'s Opioid Damages and Health Care Costs Recovery Act allows the province to bring an action against opioid manufacturers and distributors on behalf of multiple governments, but also allows a government to opt out of the proceeding.

Several companies argued Section 11 violates the Constitution by overstepping provincial authority.

B.C. courts declared the law valid, prompting the companies to take their case to the Supreme Court.

A majority of the top court found that the B.C. law respects the legislative sovereignty of other Canadian governments.

It noted that nearly every province and territory in Canada and the federal government intends to participate in the proposed class action, adding that a court should exercise considerable caution before it finds that this co-operation is unconstitutional.

Section 11 is an example of the important role that national class actions play, providing a mechanism to help multiple governments work toward the same goal, the court said.

In an increasingly complex modern world, where governments assume greater regulatory roles in multi-faceted areas, there is a greater need for collaboration between governments and between courts that cross those borders, Justice Andromache Karakatsanis wrote on behalf of the majority.

"The opioid epidemic spanning our country is a stark example of a crisis which attracts this co-operation and comity. National in scope, it highlights the role a national class action can play in achieving efficiency, consistency and access to justice for all those who have experienced harm, regardless of geographic boundaries."

Sharma told a news conference the province has "way better tools" to go after companies through national class actions, and though there's a desire to go to trial soon, she said there's an "open ask" for the defendants and governments to come together to settle the case.

Opioid maker Purdue Pharma settled for $150 million in June 2022, and Sharma said "the next steps will be about moving this to resolution as quickly as possible."

She said teaming up with other governments, none of which have opted out of the lawsuit as the law allows, highlighted the "cooperative relationship that it created amongst governments in this country."

"It's really an example of how cooperative federalism can come together through court processes," she said.

Sharma said the case has yet to be certified as a class action with the B.C. Supreme Court awaiting the high court's decision, and she wasn't able to estimate possible damages should the case be won.

"There is no amount of money that we'd be able to collect from these pharmaceutical companies that could undo the damage that I know a lot of families across B.C. and the country have faced and the impacts of the opioid crisis," she said.

Sharma said the province is reviewing the court decision to "exactly understand" how the national class action "model could be used in other circumstances."

In a statement earlier on Fiday, she said the province "can now proceed on behalf of the federal, provincial and territorial governments to recover the cost of treating opioid-related disease allegedly caused by the industry's wrongful conduct."

B.C. Premier David Eby said in a social media post Friday the opioid crisis had taken thousands of lives and devastated families across the province and the country.

"Today's Supreme Court ruling allows us to hold opioid manufacturers accountable on behalf of all Canadians, for perpetuating this crisis. We will continue this fight."

The case stretches back to 2018 when British Columbia began an action in provincial court alleging manufacturers, marketers and distributors of opioid products contributed to the national epidemic by falsely marketing their products as being less addictive than other pain remedies.

B.C. sought certification of the action as a class proceeding with itself as the representative plaintiff and a class consisting of all federal, provincial and territorial governments and agencies that paid health-care, pharmaceutical and treatment costs related to opioids, Karakatsanis noted.

A few months later, B.C. ushered in the Opioid Damages and Health Care Costs Recovery Act, creating a direct, statutory cause of action.

Karakatsanis pointed out that this included new evidentiary rules and other procedural mechanisms that allow statistical information as admissible evidence to prove causation, relieve the government from proving the cause of any particular individual's opioid-related injuries, and require the court to presume that those individuals would not have used opioids without the defendants' actions.

Section 11 of the law authorizes B.C., in its existing proceeding, to bring an action on behalf of a class consisting of other provincial, territorial and federal governments in Canada and their health-care agencies — as B.C. had already done — unless those governments opt out of the class.

The province amended its notice of civil claim to incorporate the provision into its pleadings.

A group of defendants including Sanis Health, Shoppers Drug Mart, Sandoz Canada and pharmaceutical distributor McKesson Canada appealed to the high court, arguing that Section 11 was "unprecedented in Canadian history."

In their appeal submissions, the companies claimed B.C.'s case "will establish a template for future litigation — likely involving colossal financial claims against private parties, as here — initiated by a single province on behalf of all other Canadian governments."

Lawyers for Sanis, Shoppers and Sandoz Canada did not immediately respond to a request for comment on the court's ruling.

McKesson Canada said in an emailed statement that the company is "respectful of the Supreme Court of Canada’s decision and will not be commenting further."

This report by The Canadian Press was first published Nov. 29, 2024.