The ruling allows a 2018 class action to proceed against pharmaceutical companies
British Columbia can enact a law with a provision that empowers multiple Canadian governments to participate in a single class action lawsuit against the opioid industry, the Supreme Court of Canada affirmed in a 6-1 decision Friday, paving the way for a 2018 class action to move forward.
Section 11 of the Opioid Damages and Health Care Costs Recovery Act (ORA) “does not deal with substantive rights, it is meaningfully connected to the province of British Columbia, and it respects the legislative sovereignty of other Canadian governments,” the majority wrote.
“When an individual chooses to participate as a member in a class action, they necessarily give up some rights associated with litigation autonomy. This does not mean that s. 11 of the ORA is a substantive provision,” the majority added. “A Crown’s choice to litigate in a different jurisdiction and to subject itself to the procedural rules of that forum does not violate any constitutional principle.”
Justice Andromache Karakatsanis wrote the decision for the majority. Justices Richard Wagner, Sheilah Martin, Nicholas Kasirer, Michelle O'Bonsawin, and Mary T. Moreau concurred.
Justice Suzanne Côté dissented.
The dispute began in 2018, when BC filed a proposed class action lawsuit on behalf of all federal, provincial, and territorial governments in Canada against 49 pharmaceutical companies that manufactured, marketed, and distributed opioid products across the country.
According to the lawsuit, the defendants contributed to the opioid epidemic by using deceptive marketing practices that understated how addictive their products could be. The proposed class action sought to recover opioid-related healthcare, pharmaceutical, and treatment costs that the plaintiffs paid since 1996 when Purdue Pharma (Canada) first introduced and began marketing OxyContin in Canada.
Months after filing the lawsuit, BC enacted the ORA, which authorized the government to sue the opioid industry for healthcare costs. BC enacted a similar law focused on the tobacco industry in 1998 when it became the first jurisdiction in Canada to sue tobacco manufacturers for tobacco-related healthcare costs. A provincial court initially struck down the 1998 law, but in 2005, the SCC unanimously upheld BC’s right to pursue claims against the tobacco industry after the province introduced updated legislation.
The 2018 opioid legislation has faced similar challenges. In addition to creating a direct cause of action for BC, the law included a provision, s. 11, which empowered the province to bring a class action on behalf of other Canadian governments. The legislation also allows class members to opt out of such proceedings under BC’s Class Proceedings Act.
Pharmaceutical companies named in BC’s 2018 class action filed applications in the Supreme Court of BC, arguing that s. 11 of the ORA was unconstitutional and that enacting it was beyond the powers of BC’s legislature. The BC Court of Appeal upheld the constitutionality of the provision last year.
Four defendants in the lawsuit – Sanis Health Inc., Shoppers Drug Mart Inc., Sandoz Canada Inc. and McKesson Canada Corporation – appealed to the SCC.
The SCC dismissed the appeal. Writing for the majority, Karakatsanis said, “When products, people, and problems cross jurisdictional boundaries, cooperation and comity are vital to ensure that justice is not blocked by provincial borders.
“The opioid epidemic spanning our country is a stark example of a crisis which attracts this cooperation and comity,” Karakatsanis added. “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.”
She noted that since BC introduced the ORA, nearly every province and territory in Canada has enacted its version of the statute, each with a provision similar to s. 11. Many of these statutes have an additional provision that says if another province initiates a class action, the government’s claim is subject to that other province’s procedural rules.
The pharmaceutical companies had argued that s. 11 of the ORA unlawfully gave BC the power to act as a representative plaintiff in class actions, which it cannot do under the Class Proceedings Act. The companies noted that the CPA required class representatives to be “persons.”
However, the SCC majority said it was not persuaded that the Crown was excluded “from being a ‘person’ for the purposes of the CPA.”
“I do not accept that the purpose of s. 11 of the ORA was to create substantive rights for the Crown by enabling it to engage in litigation under the CPA which it could not otherwise do,” Karakatsanis said. “Based on both the intrinsic and extrinsic evidence, the purpose of s. 11 is to provide a procedural mechanism through which the broader provisions in the ORA could apply to B.C.’s existing, proposed multi-Crown class action.”
The justice added that the practical effects of s. 11 are “constrained: it merely requires foreign Crowns to choose whether they wish to accept the procedural benefits and burdens of the class action that s. 11 authorizes the Crown in right of BC to bring on their behalf, after considering the consequences that this may have on their rights.”
Karakatsanis said the ORA respects the sovereignty of foreign governments and serves as an example of “the important role that national class actions play in matters which span the country, by providing a mechanism to help multiple governments cooperate while working toward the same goal.”
In her dissent, Côté said that while she did not challenge the overall legislative scheme of the ORA, s. 11 raises the question of whether a provincial legislature can enact laws that interfere “with the rights and prerogatives of other provincial governments and the federal government.
“The answer must be no,” she said.
The justice added that she had “serious concerns about the impact that such a provision would have on the legislative sovereignty of other provinces.”
In 2022, BC announced it had reached a proposed $150 settlement with Purdue Canada – the largest settlement of a governmental health claim in Canada’s history. In June, the US Supreme Court blocked a US settlement agreement that would have given Purdue’s owners immunity from opioid-related lawsuits in exchange for paying up to $6 billion in settlements.
Counsel for the parties did not immediately respond to requests for comment.
