Purdue Pharma is seeking an injunction to temporarily halt all litigation against the company in Canada, as it seeks to settle thousands of lawsuits in the United States over a deadly opioid epidemic.
Purdue filed for U.S. Chapter 11 bankruptcy in September as part of a proposal by the company and its owners to settle lawsuits from local and state governments for US$10-billion to US$12-billion.
A U.S. bankruptcy judge granted an injunction this month halting all lawsuits in the United States, including from 24 state governments opposed to the settlement proposal, until April 8.
David Byers, a lawyer at Toronto law firm Stikeman Elliott LLP, asked Justice Glenn Hainey of the Ontario Superior Court of Justice on Thursday to grant a similar injunction in Canada. Mr. Byers said such a stay should apply equally to all the cases in Canada.
The British Columbia government launched a class-action lawsuit in 2018 on behalf of the federal, provincial and territorial governments, suing dozens of players in the opioid industry, including Purdue, for their role in an overdose crisis that has devastated communities across Canada.
A long-running national class-action lawsuit, which involves as many as 2,000 individuals who got hooked on Purdue’s blockbuster pain pill OxyContin after their doctor prescribed it, has been in limbo since 2018, when a Saskatchewan judge rejected a proposed settlement.
Mr. Byers said it is important to extend the injunction to Canada because the Sackler family, which owns the Connecticut-based company, plans to sell its international pharmaceutical businesses, including Purdue’s operations in Canada, to help fund its contribution of at least $3-billion to the proposed settlement.
Significant litigation in Canada against Purdue is “obviously an impediment” to selling the assets, Mr. Byers said.
Reidar Mogerman, a lawyer at Vancouver firm Camp Fiorante Matthews Mogerman, which is representing the B.C. government, told the court that all of the provinces support the request for an injunction.
Working toward a global settlement that is fair to Canadians is better than full-scale litigation with an uncertain outcome, Mr. Mogerman said in an e-mail, explaining why the provinces did not oppose the stay.
“We are facing a tragic and devastating crisis, and to the extent possible, available funds should be recovered to address that crisis.”
In 2018, 4,588 Canadians died of opioid-related overdoses, representing an average of one death every two hours. Purdue is accused of fuelling the epidemic with overly aggressive marketing of OxyContin.
The provinces have racked up hundreds of millions of dollars in costs addressing the opioid crisis for everything from treating overdoses in hospital emergency departments to addiction-treatment drugs. The B.C. lawsuit seeks reimbursement from drug manufacturers and distributors dating back to 1996, when OxyContin was approved for sale in Canada and became the best-selling prescription painkiller for more than a decade.
B.C. Attorney-General David Eby said in September that Purdue’s plan to resolve lawsuits in the United States ought to include payment for the Canadian claims.
The lone dissenting voice to Purdue’s request was a lawyer representing a Quebec resident who filed a lawsuit in May against several opioid manufacturers, including Purdue. Mark Meland, a lawyer at Montreal-based Fishman Flanz Meland Paquin, stressed in court that his client is suing only Purdue’s Canadian companies. The injunction in the United States in no way affects the Canadian companies, he said, adding that what the judge is being asked to do is “a bridge too far.”
Mr. Meland said he plans to ask a Quebec judge to certify the lawsuit as a class-action. Purdue feels it will be in a stronger bargaining position in the U.S. restructuring if the certification is delayed, he said. “Why should we be hampered for no good reason?”
Justice Hainey reserved his decision.
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