Supreme Court allows for multi-Crown class actions

In a 6-1 decision, the Supreme Court of Canada ruled that British Columbia’s class action lawsuit against pharmaceutical companies and distributors for damages from the opioid epidemic can move ahead, along with the participation of other provinces and the federal government.

At issue in the case was whether it was constitutional for the province’s 2018 Opioid Damages and Health Care Cost Recovery Act (ORA) to allow for a multi-Crown class action, or whether that violated the Constitution Act, 1867. The country’s top court affirmed that the legislation was constitutional, opening the door for future multi-Crown litigation.

“When products, people, and problems cross jurisdictional boundaries, cooperation and comity are vital to ensure that justice is not blocked by provincial borders,” Justice Andromache Karakatsanis wrote for the majority.

She added that the text of the impugned section of the legislation at issue “is tightly oriented around the efficacy of B.C.’s existing proceeding and the benefits which the ORA would provide it, including the increased efficiency that a multi-Crown class action would offer everyone involved.”

When asked to certify the class action, the B.C. Supreme Court initially ruled that the ORA provision was a purely procedural mechanism to allow the province to act on behalf of other governments and fell within the province’s authority to legislate. The B.C. Court of Appeal unanimously agreed with this, as did the majority of the Supreme Court.

The majority pointed to the rise of national class actions as an example of cooperation between provinces and noted that a lack of cooperation by governments and parties has resulted in overlapping class actions in multiple provinces covering the same claims, with the same defendants and occasionally the same plaintiffs.

In its decision, the Court relied partly on the framework established in Imperial Tobacco regarding matters “in the province.”

“This Court has long recognized that the ‘rigid, watertight compartments approach to the division of legislative power’ risks hindering cooperative regulatory regimes undertaken in the public interest,” Karakatsanis wrote.

“Between the federal government and the provinces, this idea of cooperation arises in the principle of ‘cooperative federalism,’ an interpretative principle for approaching the division of powers.”

To that end, the Court found the evidence supported the interpretation that the legislation was to assist the court process. It provides a procedural mechanism that would apply to the proposed class action. It did not create substantive rights for the Crown that would have allowed it to engage in litigation that it could not do otherwise. It also allows Crowns to exercise their autonomy and choose whether it is in their best interests to seek these damages in a single, consolidated proceeding or to opt out and commence suits in their own jurisdictions—something that may be impossible for smaller jurisdictions.

“It is 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,” Karakatsanis wrote.

The appeal was dismissed with costs.

The B.C. and federal government’s reaction was positive. With this hurdle cleared, they will continue to seek certification for the lawsuit.

In a statement, B.C. Attorney General Niki Sharma called the decision “a significant victory in our fight against the opioid manufacturers and distributors” as it seeks to “recover the cost of treating opioid-related disease allegedly caused by the industry’s wrongful conduct.”

“Our government will continue this fight on behalf of its citizens and all people of Canada until a final resolution is reached and encourage the defendants to consider their role in the ongoing opioid crisis and to work collaboratively with the government of B.C. to make amends,” Sharma continued, adding the fight is “the right thing to do.”

The federal minister of mental health and addictions was pleased that the government’s right to hold pharmaceutical companies accountable had been affirmed.

“Canada intends to join this suit should it be certified. We’ve taken action to crack down on the predatory practices of the pharmaceutical industry, and we won’t stop now,” Ya’ara Saks said in a tweet.

In her dissent, Justice Suzanne Côté said that the pith and substance of the impugned section of the ORA “affects the substantive rights of governments outside British Columbia in a non-incidental way.” In her view, these unconstitutionally legal effects “cannot be made valid by the fact that those foreign governments can choose to opt out of the class actions commenced by British Columbia.”