Quebec companies with no direct business in BC can't dodge province's opioids class action: BCCA

British Columbia can include two Quebec companies among the defendants in its opioids class action lawsuit, the BC Court of Appeal ruled Wednesday, tossing out the companies’ argument that the provincial court lacks jurisdiction to decide the claims.

Jean Coutu and Pro Doc, a wholly-owned subsidiary of the company, are incorporated in Quebec. Pro Doc specializes in distributing pharmaceuticals and generic drugs under its private label. Part of its business involves buying opioid products from manufacturers and reselling them to Jean Coutu, a franchisor supplying the products to more than 400 stores across its network. Neither company directly engages in business in BC.

When BC filed a proposed class action in 2018 to recover healthcare costs incurred because of the opioid crisis, the province named more than 40 defendants that allegedly manufactured or distributed the drugs, including Pro Doc and Jean Coutu. BC filed the lawsuit on behalf of itself as well as federal, provincial, and territorial governments and agencies across Canada.

Among other claims, BC alleged the defendants used deceptive and misleading marketing to promote opioids despite resistance to prescription opioids in the medical community. The province also argued that the defendants ignored suspicious sales data, flooded the market with opioids, released poorly-designed opioid products, and failed to provide warnings of opioid-related risks.

Pro Doc and Jean Coutu protested their inclusion in the lawsuit, arguing that the BC Supreme Court did not have the territorial competence to hear the claims against them. However, a case management judge disagreed, ruling that BC had successfully established that the province’s courts have jurisdiction.

The court’s ruling relied on the Court Jurisdiction and Proceedings Transfer Act, which provides a test for determining whether a “real and substantial connection” exists between BC and the facts of a proceeding. According to the test, such a connection is present if the proceeding concerns restitutionary obligations that substantially arose in BC, a tort committed in BC, or a business carried on in the province.

While the case management judge found no evidence that Pro Doc and Jean Coutu carried on business in BC during the class period, the judge found that the proceeding met the other two prongs of the test.

The two companies appealed. Among other arguments, Pro Doc and Jean Coutu argued that it was not reasonably foreseeable that the companies’ opioid products would find their way to BC, given that the companies do not operate in the province. The companies noted an affidavit provided by the province, which suggested that only a small quantity of their opioids – with a value totalling $124 – was actually dispensed in BC.

The BCCA disagreed. In its decision, the appellate court said the case management judge “did not simply look to the evidence that some Pro Doc opioids had been dispensed in BC as supporting foreseeability.

“Rather, in assessing that question, he considered the totality of the evidence and the pleadings together, finding there was an arguable case to be made on the basis of the pleadings” and other evidence. This included the fact that Pro Doc’s website invited BC medical professionals to log onto a section of their site by using their BC registration numbers, as well as the inclusion of the Pro Doc drugs on the BC PharmaCare formulary.

“As the case management judge noted, even if the opioids were only directly distributed to wholesalers or pharmacies in Quebec, there was nonetheless a good arguable case that it was reasonably foreseeable that drugs could find their way indirectly to consumers in BC or be consumed,” the BCCA said.

The two companies also argued that BC failed to prove they made misrepresentations about opioids in the province. They argued that this lack of evidence made it inappropriate for the case management judge to tie them to “a tort of misrepresentation in BC.”

However, the BCCA was not convinced. The judge was satisfied “at this pre-discovery stage of the proceedings, that Jean Coutu’s Medication Dictionary and its inadequate warnings concerning opioids sufficed to establish a good arguable case that misrepresentations were made in BC.”

The appellate court dismissed the appeal.

The BC Supreme Court certified the underlying class action in January. Referencing the jurisdiction challenge by Pro Doc and Jean Coutu, the court found “that an alternative forum to adjudicate the claims would not be fairer or more efficient for this matter such that the province should be denied the benefits of its decision to select British Columbia as its litigation forum.”

Counsel for Pro Doc, Jean Coutu, and the province did not respond to requests for comment.