Calgary lawyer takes on Purdue Pharma to collect opioid-related costs for Canadian cities
Bankruptcy plan offers billions to U.S. states, cities and tribes but nothing to Canadian governments
A Calgary-based law firm, on behalf of all Canadian cities and municipalities, has filed an objection to Purdue Pharma L.P.'s multibillion-dollar bankruptcy proposal that would compensate U.S. cities, counties, states and Native American tribes for damages related to the opioid crisis while leaving out Canadian jurisdictions.
The case will be heard in the U.S. Bankruptcy Court for the Southern District of New York on August 9.
Evidence from a couple of Canadian cities, including Grande Prairie, will be presented during the proceedings to highlight the economic and social impacts of the crisis — similar to what's happened in U.S. communities — in the hopes the judge will force the company to divert some of its compensation north of the border.
"The damage didn't stop at the border," said Mathew Farrell, a lawyer with Guardian Law.
"I don't think that there is a good reason why a Canadian city should be treated differently from a U.S. city. I mean, we're talking about the same legal reasons why they're being sued, the same kinds of damage that have been done in the community. Very, very similar on pretty much every front," added Farrell.
Purdue, the maker of the prescription painkiller Oxycontin, filed bankruptcy in 2019 to protect itself and its owners, the Sackler family, from an overwhelming number of lawsuits related to the ongoing opioid crisis.
Purdue values its bankruptcy plan at more than $10 billion. It aims to use the money to settle outstanding claims by U.S. communities.
But it does not include any compensation for Canadian communities.
Canadians are polite, but we're not pushovers.- Matthew Farrell, lawyer
Last month, an overwhelming majority of Purdue's roughly 120,000 creditors voted in favour of its bankruptcy plan.
A federal bankruptcy judge is expected to hear any final objections to this plan on August 9 before making a decision.
At that time Farrell, with the help of U.S. lawyers, will make a pitch for $10 billion in compensation for Canadian cities, municipalities and First Nations.
"It's our intention not to let these guys get away with this … we're going to be fighting.
"Canadians are polite, but we're not pushovers," said Farrell.
But Farrell said he realizes, given the number of claims, they likely won't receive the total amount.
"There's a lot of people who need help and there's a lot of communities that need help. So we're just looking for our fair share of the money that Purdue has to try and fix this problem," said Farrell.
One of the lead plaintiffs in Farrell's fight for Canadian municipalities against Purdue, and in a broader class-action lawsuit against dozens of other opioid manufacturers and distributors, which has yet to be certified, is the city of Grande Prairie, in northern Alberta.
Brantford, Ont., is the other lead plaintiff.
The last kid that I buried when I was working on [the opioid task force] was a kid where you would never have any idea looking at him that he was struggling...- Grande Prairie Coun. Dylan Bressey
Grande Prairie, which has a population of about 65,000, has the highest rate of opioid deaths at 66.9 per 100,000 people for the first four months of this year, compared to other cities in Alberta. Calgary's rate sits at 30 and Edmonton's at 42, although these two larger cities have significantly more opioid-related deaths overall.
Coun. Dylan Bressey attributed the city's high rate to the nature of employment there. He said it's a mostly young population of oil and gas workers, who do a lot of physical labour and are away from their communities for long periods.
"So I think that creates a lot of conditions that make opioids, the opioid epidemic, especially bad here," said Bressey, who also sits on the Grande Prairie Opioid Response Task Force.
Bressey said, as a result, their police, fire and other city departments have been taxed — investigating opioid-related crimes, responding to overdoses, doing drug outreach, picking up discarded needles and training staff on the use of Naloxone.
"I lose sleep over our policing budgets, going up year after year after year, and that is being driven by our opioid crisis," said Bressey.
He said the costs of added services and programs can be easily calculated.
But he said not all costs can be calculated, such as the loss of life in the community.
Bressey said before he was in office he used to run youth programs and saw first-hand the devastating impacts of the opioid crisis.
"The last kid that I buried when I was working on that program was a kid where you would never have any idea looking at him that he was struggling with these things. It was a shock to the entire community when we had to bury him because nobody had any idea," said Bressey.
Provincial claim also in the works
A separate $67.4-billion US claim against Purdue Pharma (Canada) on behalf of provincial governments to recoup health-care costs is still in the works.
Their lawyer said unlike the cities, the provinces are not objecting to the U.S. bankruptcy filing because they are going after the Canadian company, which is a separate entity, for compensation.
"[We've] entered into an agreement with the debtors and the shareholders where we do not object to the U.S. plan on the basis that the U.S. plan will not impact our Canadian claims based on Canadian conduct,' said Reidar Morgermann, a lawyer based out of Vancouver.
Any current litigation against Purdue (Canada) is temporarily stayed due to the company's U.S. bankruptcy filings.
Farrell said he supports the provinces' claim, and he too plans to go after Purdue (Canada).
But he worried an approval of Purdue's bankruptcy plan will shut the door on Canadian cities and municipalities to receive compensation from Purdue and the Sacklers altogether.
"In the event that it does block Canadian cities from suing both the Sacklers and Purdue, then there are other companies that contributed to the opioid crisis and we will still be pursuing them," said Farrell.
Farrell is also representing First Nations in a separate claim.
He said the Peter Ballantyne Cree Nation is the lead plaintiff in that case and that their damages are related to loss of culture and community. He's seeking $3.3 million per band on their behalf.
CBC News reached out to Purdue Pharma L.P (USA) and Purdue Pharma (Canada) for comment.
Purdue Pharma L.P. (USA) referred CBC to Purdue Pharma (Canada), and Purdue Pharma (Canada) said it cannot comment on matters before the courts.