In August 2018, the Province of British Columbia (Province) commenced a class action on behalf of itself and other provincial and federal governments against approximately 50 pharmaceutical manufacturers, wholesalers, and distributors of opioid-related products (defendants). Through a variety of statutory and common law causes of action, the Province seeks to recover healthcare costs and damages since 1996 that resulted from the opioid epidemic – which the Province alleges was created by the defendants’ wrongful conduct in their manufacture, marketing, distribution, or sale of opioid-related products in Canada.
On January 4, 2022, the British Columbia Supreme Court (Court) in British Columbia v Apotex Inc, 2022 BCSC 1 dismissed the defendants’ various motions to strike the Province’s claims (with some exceptions).
The Court also granted the Province’s motion to further amend its pleadings (which generally sought to clarify or provide further particulars to its existing claims, add the new claim of public nuisance, and add several new defendants).
The certification hearing for the class action has not taken place.
The Opioid Damages and Health Care Costs Recovery Act
In October 2018, the Government of British Columbia, in response to the opioid crisis, enacted the Opioid Damages and Health Care Costs Recovery Act (ORA). Section 2(1) of the ORA provides a direct and distinct cause of action allowing the B.C. government to recover healthcare costs caused or contributed to by an “opioid-related wrong”, which includes:
“a breach, by a manufacturer or wholesaler, of a common law, equitable or statutory duty or obligation owed to persons in British Columbia who have used or been exposed to or might use or be exposed to an opioid product.”
Accordingly, most of the Province’s claims in this action are “ORA-based claims” – whereby the Province alleges a breach of duty required by statutes or under the common law, and thereby giving rise to a claim under the ORA.
The Province’s Claims and Allegations
Among other arguments, the defendants generally alleged that the Province’s claims must be struck for insufficient particulars and material facts. The Court disagreed, holding that it is not plain and obvious the claims must fail, particularly for ORA-based claims where the burden is less onerous than standalone causes of actions not rooted in the ORA.
- Breach of the Competition Act. The Province alleged that the misleading advertising of some defendants’ opioid products is a breach of s. 52 of the Competition Act, which gives rise to claims for recovery under s. 36 of the Competition Act and the ORA. In refusing to strike these claims, the Court rejected the defendants’ arguments that (a) a province is not a “person”, and (b) establishing detrimental reliance is required under s. 36 of the Competition Act.
- Breach of the Food and Drug Act (FDA). The Province also alleged that some defendants’ misleading representations of their opioid products breached s. 9 of the FDA, which the defendants argued is not a proper cause of action and lacks material facts. The Court agreed with the plaintiff that breach of the FDA is not a standalone claim, but rather a breach of statutory duty that grounds a claim under the ORA. Accordingly, the Court found the Province has pleaded sufficient material facts to support such a claim (i.e., ORA-based claim for breach of the FDA).
- Breaches of common law duties. In addition to statutory claims, the Province also made a number of ORA claims based on breaches of common law duties (including negligent and fraudulent misrepresentation, deceit, negligent design, failure to warn, and general negligence). Contrary to the defendants’ positions, the Court found the Province’s pleadings to be sufficient and adequate.
- Public nuisance. As a standalone cause of action, the Province alleged that the defendants’ conduct – which created the opioid epidemic, either individually or in concert with each other – constitute a public nuisance. The defendants argued that this claim must fail on the grounds that the Province has not properly pleaded (a) a public right, and (b) that the defendants unreasonably interfered with that right. The Court disagreed, holding that although a claim for public nuisance in the context of health-related allegations is novel in Canada, public health could be contemplated as an actionable public right and the Province’s pleadings are sufficient at this stage of the action.
- Unjust enrichment. The Province further alleged, as another standalone cause of action, that the defendants were unjustly enriched from the sales of opioid products through illegal and deceptive promotions. The Court held that any contractual justification for the defendants’ enrichment should not be determined on a motion to strike and therefore, refused to strike the claim.
- Claims under other statutes. In addition to the ORA, the Province also sought recovery, in the alternative, under the Healthcare Costs Recovery Act (HCCRA) as well as parallel legislations in other provinces. The Court agreed with the defendants to strike the HCCRA-based claims as duplicative and unnecessary, but allowed the claims under other provincial statutes as they are merely necessary legislative bases for other provinces to join the action as a class member.
Lastly, the Court allowed the Province’s amendments to add as new defendants several manufacturers of opioid-related products, all of which except Noramco did not oppose. The Court agreed with the Province that Noramco (a supplier of active ingredients to companies that manufacture the finished opioid products) falls within the definition of “manufacturer” under the ORA.
Should you have any questions, please do not hesitate to contact a member of the Pharmaceutical Litigation Group.
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