3M to pay $6bn settlement in US military earplug lawsuit

08:15 30.08.2023

3M, the Minnesota-based multinational conglomerate, has agreed to pay a staggering $6.01 billion to settle lawsuits filed by United States military veterans and service members who claim to have suffered hearing loss as a result of using the company's Combat Arms earplugs. The settlement, announced by both 3M and the plaintiffs' lawyers, will consist of $5 billion in cash and $1 billion in 3M stock. The payments will be spread out over the course of six years, from 2023 to 2029.

According to 3M, the settlement does not imply any admission of liability, as the company firmly maintains that their earplugs are "safe and effective when used properly." This comes after a failed attempt by 3M earlier this year to shift the lawsuits, which had become the largest mass tort litigation in US history, into bankruptcy court to limit their liability.

Approximately 240,000 individuals are expected to be eligible for the settlement, according to Chris Seeger, one of the lead lawyers representing the plaintiffs. He expressed confidence that the required threshold of 98% of eligible claimants participating in the settlement will be met. Seeger emphasized the significance of the agreement, describing it as a "tremendous victory for the thousands of men and women who bravely served our country and returned home with life-altering hearing injuries."

The news of the settlement had an immediate positive impact on 3M's stock market performance. On Tuesday, their shares increased by over two percent, following a 5.2 percent increase on Monday when reports of the imminent settlement emerged. The potential liability for 3M in relation to the earplug litigation had been estimated by some analysts to be as high as $10 billion.

The Combat Arms earplugs at the center of the lawsuits were manufactured by Aearo Technologies, a company that 3M acquired in 2008. These earplugs were used by the US military during training and combat operations from 2003 to 2015, including deployments in Afghanistan and Iraq. The plaintiffs argue that 3M concealed design flaws, manipulated test results, and failed to provide proper instructions for using the earplugs, resulting in permanent hearing damage.

The lawsuits were consolidated in 2019 and placed before US District Judge M Casey Rodgers in Pensacola, Florida, federal court. At their peak, these cases accounted for approximately 30 percent of all federal court cases nationwide. Out of the 16 cases that have gone to trial so far, 3M has lost 10, with a total of $265 million being awarded to 13 plaintiffs. These verdicts are included in the $6.01 billion settlement amount.

In July 2022, Aearo filed for bankruptcy, and 3M committed $1 billion to cover its liabilities arising from the earplug lawsuits. However, a bankruptcy judge dismissed this filing in June, determining that Aearo did not face sufficient financial distress to warrant bankruptcy protection.

3M has argued that the mass tort litigation was unjust, asserting that Judge Rodgers excluded scientific evidence favorable to the company from the trials and permitted numerous unverified claims to flood the court's docket. Despite this, 3M clarified in their announcement that the settlement encompasses all claims in Florida's multidistrict litigation, coordinated state court action in Minnesota, and any potential future claims. They reiterated that the agreement does not signify admission of liability and that they are prepared to continue defending themselves if certain terms of the settlement are not fulfilled.

This recent settlement comes just two months after 3M announced a tentative $10.3 billion agreement with multiple US public water systems to resolve claims related to water pollution caused by per- and polyfluoroalkyl substances (PFAS), commonly known as "forever chemicals." Although that deal has yet to be finalized, it received a significant boost on Monday as 22 US states and territories withdrew their previous objections.

As the payouts begin in 2023, the settlement provides hope for thousands of military veterans and service members who have long sought justice for the hearing injuries they claim to have sustained. While 3M maintains their position that their earplugs were safe when used correctly, the substantial settlement signals a significant milestone in holding corporations accountable for potential harm caused by their products.

/ Wednesday, August 30, 2023, 8:15 AM /

themes:  Military  Florida  Iraq  Minnesota

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