As the opioid crisis continues to ravage communities across Canada, urgent action is needed to address this growing problem. There is potential for class actions against drug producers and distributors in Canada for their roles in causing this devastating social issue. In this blog post, we take a brief dive into an issue that has impacted hundreds of thousands of people—and disproportionately Indigenous peoples—across what we call North America.

In 2018, the Province of British Columbia launched a class action against multiple producers and distributors of prescription opioid medication. The defendant companies constituted roughly 50 pharmaceutical manufacturers, wholesalers, and distributors involved in the manufacture, sale, and distribution of opioid-related products in Canada. The case—Valeant Canada LP/Valeant Canada S.E.C. v. British Columbia (“Valeant”)^[1]—made its way to the Court of Appeal for British Columbia (“Court of Appeal”), which heard an appeal of various procedural orders, including an order allowing the Province to amend its pleadings to add public nuisance as a cause of action.

In short, the Court of Appeal dismissed the majority of defendants’ appeals but struck the Province’s public nuisance claim against the defendant companies. The Province alleged that the defendants’ development, marketing, and promotion of opioids created the opioid epidemic in British Columbia and Canada, constituting a public nuisance. The Court of Appeal held that extending the law of public nuisance to the facts of the case would amount to a “radical extension” of public nuisance law.^[2] Further, the Court of Appeal ruled the extension of public nuisance was unnecessary as the alleged misconduct fell squarely within the law of negligence.

The Opioid Crisis

The opioid crisis has had, and continues to have, devastating effects on individuals, families, and communities across Canada, with considerable increases in the use of prescription opioids since the 1980s. Between January 2016 and March 2022, almost 31,000 Canadians died as a result of overdoses and opioid toxicity. This has been driven in large part by the effects of the COVID-19 pandemic over the last three years. Data modelling by Statistics Canada revealed an alarming and demonstrable increase in opioid-related deaths in Canada since the onset of the COVID-19 pandemic; research in Ontario has revealed a 45% increase in opioid-related deaths, while British Columbia recorded its highest-ever number of overdose deaths in 2021. In fact, in October 2021, Dr. Patricia Daly, Chief Medical Health Officer at Vancouver Coastal Health, gave a presentation to city council outlining the extent to which the opioid crisis in British Columbia has—statistically speaking—overshadowed COVID-19-related deaths.

Disproportionate Impacts on Indigenous Peoples

Opioid abuse and exposure to toxic drugs have disproportionate impacts on Indigenous peoples in Canada. First Nations individuals living on reserves across Canada were 5.6 times more likely to be hospitalized for opioid poisoning than the non-Indigenous population, while Métis and Inuit individuals were each 3.2 times more likely to be hospitalized. In British Columbia, First Nations people experienced 15% of all drug toxicity deaths in 2020, despite comprising only 3.3% of the province’s population. The severity of this crisis is likely understated due to poor data collection and disaggregation as relates to Indigenous peoples. The COVID-19 pandemic has also proportionately worsened this problem for Indigenous peoples; reports by the Chiefs of Ontario have shown that opioid-related deaths among First Nations people in that province have increased 132% from March 2020 to March 2021 (compared to a 95% increase in opioid-related deaths in the general Canadian population).

Province’s Class Action

In the proposed class action, the Province alleged that multiple defendants in the pharmaceutical industry breached their duties to consumers in the manufacture and distribution of opioid drugs thereby causing an epidemic of addiction and imposing substantial health care and other costs on governments. The Province further alleged the defendants’ conduct “caused deaths and serious and long-lasting injury to public peace, health, order, and safety, significantly harming the plaintiff and impacting its ability to deliver health care to the citizens of British Columbia.”^[3]

The Province alleged the defendant companies marketed opioids as being less addictive than they knew them to be and for medical conditions they knew the drugs were ineffective in treating, resulting in an increase in the prescription and use of opioids across British Columbia and Canada. The Province made its primary claim pursuant to the Opioid Damages and Health Care Costs Recovery Act, SBC 2018, c 35 (“ORA”), enacted subsequent to the Province commencing the actions. Section 2(1) of the ORA provides that “[t]he government has a direct and distinct action against a manufacturer, wholesaler, or consultant to recover the cost of health care benefits caused or contributed by an opioid-related wrong.”

In addition to its claim under ORA, the Province pleaded that the defendants’ conduct created the opioid epidemic in British Columbia and Canada, constituting a public nuisance. The Province further claimed that the defendants’ conduct unreasonably interfered with the public health and safety of Canadians and amounted to an attack upon the rights of Canadians to live their lives unaffected by the inconvenience and discomfort the opioid epidemic has caused.

Defendants’ Application to Strike

At trial level in the Supreme Court of British Columbia (“BC Supreme Court”), the defendants’ sought to bring an application to strike the Province’s claims. The defendants submitted that the various causes of action advanced against them were fatally flawed because they did not contain the necessary material facts. In particular, the defendants strongly opposed the public nuisance claim.  

The BC Supreme Court denied the defendants’ application to strike the public nuisance claim, holding that the defendants failed to meet the burden of demonstrating the claim was “bound to fail”. The BC Supreme Court held that by pleading:

1. an unreasonable interference with the Canadian and British Columbian public’s health, safety, comfort, and convenience;
2. the creation of the opioid epidemic and its adverse health effects; and
3. the resulting negative social, health, and economic effects, the Province sufficiently demonstrated its claims were not bound to fail.

Court of Appeal Places Parameters Around Public Nuisance

The defendant companies appealed the BC Supreme Court orders. The Court of Appeal dismissed the appeals, except for the appeal relating to the refusal to strike the public nuisance claim. In that regard, the Court of Appeal allowed the appeal and struck the public nuisance claim for two reasons. First, cases of public nuisance must involve an interference with property or tangible resources in a particular location, which the facts of this case lacked; and, second, applying the law of public nuisance to the facts at bar would be more than an incremental extension of existing common law principles, which the Court of Appeal declined to do.

To prove public nuisance, a plaintiff must show an unreasonable interference with a public right. A public nuisance arises from an act that endangers the health or property of the public or prevents the public from exercising or enjoying their common rights. Historically, public nuisance claims involve unreasonable interference with property or tangible resources (e.g., air and water) in specific locations. Mr. Justice Harris, for the Court, emphasized that classic public nuisance cases involve unreasonable interference with the public’s right to traverse public highways or waterways.^[4]

The Province’s claim involved no such interference. Other public nuisance cases involving an interference with the right to health were distinguishable on the grounds that the conduct at issue involved risk to public health that was indiscriminate in its effects (e.g., the contamination of air, water, or food which puts the health of the public in a specific area at risk).^[5] In the Court’s opinion, this is substantially different from a situation where a manufacturer or distributor misleads individuals into acting in a way that causes them injury. The Court held such wrongful conduct belongs in private rights law and that the presence of widespread consequences resulting from a private wrong does not convert a claim of negligence to one of public nuisance.^[6]

Further, to do so would apply public nuisance law to an entirely novel set of circumstances. The Court held the consequences of extending public nuisance in this way would be “unpredictable, dramatic and potentially problematic”—as well as unnecessary.^[7] The alleged misconduct in the action is, as the Court held, within the domain of negligence law and product liability. Extending public nuisance to situations analogous to these opens the door to all kinds of claims regulated by the law of negligence, and thus would “distort the boundaries of legal principle and alter the foundations of compensation for wrongdoing.”^[8] The Court of Appeal held a change of such magnitude and significance is a matter for the legislature, not the courts.^[9]

Extension of Public Nuisance in Other Jurisdictions

The Court of Appeal decision also explored the extension of the law of public nuisance in other jurisdictions, particularly in the United States, where some courts have extended public nuisance to cases involving opioids.^[10] In one case—In re National Prescription Opiate Litigation— an Ohio federal jury found that several pharmacies engaged in intentional and illegal behaviour that was a substantial factor in producing the public nuisance resulting in the opioid epidemic.^[11] In a different case—In re Opioid Litigation—a New York court was open to the possibility that public nuisance may be an appropriate tool to address the harm resulting from the opioid epidemic.^[12] However, after canvassing these cases, our Court of Appeal ultimately concluded that permitting public nuisance claims to proceed in opioid litigation appeared to be the outlier situation in American jurisprudence, rather than the norm.^[13]

Notably, however, opioid-related advocacy in the United States has led to the three largest drug distributors and one drug producer agreeing to pay USD$590 million to resolve claims by Native American tribes that the companies were responsible for driving an opioid crisis with serious impacts in their communities. The settlement breaks down to USD$440 million, to be paid over seven years, on top of an additional payment of USD$75 million that the companies agreed to pay to the Cherokee Nation in September 2021. At least 85% of the funds will be devoted to funding treatment and other services that will help address the ongoing opioid epidemic, which the claimants alleged was caused by inadequate distributor controls and efforts by drug producers to gloss over the additional risk posed by their products.

Class action lawsuits against opioid manufacturers in Canada may be an important tool for holding these companies accountable for their role in the opioid crisis and preventing future harm. However, the legal system is often a slow-moving and crude vehicle for change.

Want More?

MT+Co. is experienced in class actions. If you have any questions or comments relating to what we discussed above, feel free to reach out to Joelle Walker or Myles Brown from our Litigation + Dispute Resolution Group.

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