The Supreme Court of Canada has ruled that the British Columbia legislation that permits the province to bring a class action on behalf of other provincial governments and the federal government for the recovery of health care costs arising from the opioid epidemic is constitutional. In Sanis Health Inc. v. British Columbia, 2024 SCC 40, the Supreme Court held that the relevant section of BC's Opioid Damages and Health Care Costs Recovery Act (ORA) was within BC's legislative jurisdiction, which allows BC to continue the proposed class action it had commenced on behalf of multiple Canadian governments against opioid manufacturers, marketers and distributors.
The Court's decision may have a potential impact on BC's efforts to enact similar legislation covering a broader scope of health care costs. Former BC Bill 12, which was introduced earlier this year, would have created a statutory cause of action for the government to recover costs arising from broadly defined "health-related wrongs" on behalf of a class that could include other provincial governments and/or the federal government. After passing second reading, the BC government announced that it was placing former Bill 12 "on hold" to further consult with industry participants. The bill then died when the provincial parliament was dissolved prior to BC's provincial election.
What you need to know
- BC's multi-Crown class proceeding is constitutional. The Supreme Court concluded that it was constitutionally permissible for BC's ORA to authorize a proposed class action brought on behalf of the federal and other provincial governments for the recovery of opioid-related health care costs.
- Potential implications for former Bill 12. The Court's decision makes it possible that similar provisions, like those proposed by BC in former Bill 12 that authorized multi-Crown class actions for a broader array of health-related wrongs, may be found constitutional.
- Future effects remain to be seen. It remains to be seen how the Court's decision may impact the future legislative agenda in BC, including whether legislation along the lines of former Bill 12 might be reintroduced. To date, BC is the only province that has proposed health care cost recovery legislation for such broadly defined "health-related wrongs".
BC's opioid class action
In 2018, the BC government commenced a proposed class action against several manufacturers, marketers and distributors of opioids. BC alleged that the defendants contributed to the national opioid epidemic by falsely representing their products to be less addictive than other pain medication. BC claimed recovery through several common law torts and the misrepresentation provisions of the federal Competition Act. The proposed class consisted of federal, provincial and territorial governments and agencies in Canada that had paid health care costs related to opioids.
After commencing the litigation, BC enacted the ORA, which created a direct cause of action for BC to recover health care costs arising from an "opioid-related wrong". Section 11 of the ORA specifically permitted BC to bring a class action in respect of an opioid-related wrong on behalf of the federal, provincial and territorial governments, as well as federal or provincial government payment agencies.
Several defendant companies challenged section 11 as being outside of BC's territorial legislative competence. They argued that section 11 did not respect the constitutional division of powers because it dealt with the civil rights of other provinces. The courts below disagreed, holding that section 11 was simply a procedural mechanism that allowed other Canadian governments to have their claims adjudicated in the class proceeding brought in BC. The provision did not affect the substantive civil rights of the other governments because their claims would be dealt with according to their own substantive laws (which included equivalent statutes to the ORA). The other governments could also choose to participate in BC's class action or not.
SCC: multi-Crown class proceeding is permissible
By a 6-1 majority, the Supreme Court dismissed the appeal and held that section 11 was constitutional. The majority agreed that section 11 created a procedural mechanism through which the ORA would apply to BC's ongoing opioid litigation and did not create substantive rights. It was therefore a valid exercise of BC's power to legislate in relation to the administration of justice in the province under the Constitution Act, 1867.
The majority held that section 11 did not improperly exceed BC's territorial legislative jurisdiction. Rather, it authorized BC to bring a multi-Crown class proceeding in a way that maintained a meaningful connection with the province. The majority recognized that national class actions (i.e., class actions brought in one province that include residents of other provinces) are nothing new. Common issues shared between the resident representative plaintiff and the non-resident class members are sufficient to establish a real and substantial connection with the province: this does not change simply because the class includes the governments of other provinces.
An important consideration for the majority was that the other governments could choose to opt out of BC's class action, just as individual class members can opt out of a national class action. This meant that the non-BC Crowns would only be bound by the BC proceeding if they chose to be, which respected their legislative sovereignty. It was also significant that the non-BC Crowns in this case had demonstrated their cooperation by enacting their own versions of the ORA, by indicating their intent to participate in BC's class action, and by supporting BC's position on the appeal.
Implications for former Bill 12 or similar legislation
The Court's decision in Sanis Health raises questions about the status of similar proposed legislation, such as BC's former Bill 12. The bill passed second reading in the BC Legislature in April 2024 before being put on hold. It then died on the order paper when the Legislature was dissolved for the provincial election. Former Bill 12 would have enacted the Public Accountability and Cost Recovery Act, which was modeled on the ORA and on BC's Tobacco Damages and Health Care Costs Recovery Act (TRA), which permits the recovery of tobacco-related health care costs. However, former Bill 12 was broader in its scope, with the potential to affect manufacturers and service providers across a wide variety of industries. The bill as it previously existed before the election outlined several provisions:
- The BC and federal governments would have a statutory cause of action to recover the cost of health care benefits arising from "health-related wrongs", which could include any breach of a common law, equitable or statutory duty owed to persons in BC, or any tort committed in BC, that causes or contributes to disease, injury or illness.
- Present and future health care costs relating to a "disease, injury or illness" would be recoverable. This could include physical or mental injury or illness, the "general deterioration of health", and even the risk of disease, injury or illness. The government would be able to recover the cost of health care benefits for specific individuals or on an aggregate basis for a population of benefit recipients.
- The court would be required to presume causation in certain circumstances, including when the government proves that the defendant breached a duty and, as a result, recipients of health care benefits were exposed to a risk of disease, injury or illness. If this threshold were met, the court would have to conclude that the defendant's breach caused or contributed to disease, injury or illness that the benefit recipients would not otherwise have suffered.
- It would be unnecessary in certain cases for the government to show that a particular defendant caused or contributed to disease, injury or illness. If the government could prove that one or more defendants, through the breach of a common law, equitable or statutory obligation, contributed to a risk of disease, injury or illness by making a product available to someone or exposing someone to a product, and the person suffered disease, injury or illness because of that product, then each defendant who could have contributed to the risk could be found liable. This would be the case even if the government could not show which defendant in fact caused the person to use or be exposed to the product. Liability would be apportioned according to each defendant's contribution to the risk based on several factual considerations, including the defendant's market share and profits relating to the product.
- The government would be able to rely on population-based evidence (e.g., statistical information, information derived from studies or information derived from sampling) to establish causation, liability and the quantum of damages. The government would also be able to rely on ministerial certificates as conclusive proof of the cost of health care benefits.
Like the ORA, former Bill 12 would have authorized the BC government to bring an action for a health-related wrong on behalf of a class that includes the federal, provincial and territorial governments, as well as federal or provincial payment agencies that make reimbursement for health care costs. Former Bill 12 also specifically recognized that these class members could opt out of the BC class action. In light of the Supreme Court's decision in Sanis Health, it is possible that this type of multi-Crown class proceeding could be constitutional, potentially exposing a broad cross-section of industry participants to such multi-governmental class action claims if former Bill 12 were to be re-introduced in its pre-election form. However, unlike the ORA, which had equivalents in other provinces, no other province to date has proposed legislation similar in scope to former Bill 12.
How the Supreme Court's decision will affect future legislation along the lines of former Bill 12 is unclear. It is also uncertain at this stage whether other provinces will attempt to introduce similar legislation. Torys' class action practice will continue to monitor developments in this area.
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