Federal judge dismisses 3M’s attempt to settle defective earplug claims in bankruptcy
A federal judge has ruled against 3M and its subsidiary Aearo Technologies as they face thousands of lawsuits alleging their earplugs failed to protect military members from long-term hearing-related disabilities.
Friday, U.S. Bankruptcy Judge Jeffrey J. Graham dismissed Aearo’s attempt to settle the earplug claims through bankruptcy, meaning the company could now have to handle each claim on a case-by-case basis.
Last year, 3M created a $1 billion trust fund to compensate those who’ve filed defective earplug claims against them. The company said that would also allow for a quicker resolution instead of handling claims on a case-by-case basis, which 3M says could take decades.
The court filing notes that there are currently more than 255,000 cases pending against 3M, according to the U.S. Judicial Panel on Multidistrict Litigation, which makes it by far the largest multidistrict case in history. The filing adds that the pending cases represent 30% of all cases currently pending in U.S. federal district courts. For comparison, the next largest currently pending multidistrict case has less than 38,000 pending actions.
The sheer number of cases is why 3M and Aearo had tried to resolve the cases in bankruptcy, as Aearo even noted in its filings that the action wasn’t due to financial concerns or impending insolvency “but were initiated to manage the MDL process.”
However, the judge noted that, given the companies aren’t facing financial problems that warrant Chapter 11 relief or preserving any value that would be lost outside of bankruptcy, their bankruptcy petitions were premature.
“Judge Graham’s ruling rightly repudiates 3M’s cowardly attempt to delay justice for the hundreds of thousands of veterans harmed by the company’s dangerously defective earplugs. This gambit by 3M was a gross misuse of the bankruptcy courts, and we are pleased Judge Graham rightly dismissed it,” attorneys for the claimants said in a statement. “The soldiers we represent deserve an opportunity to hold 3M accountable before a jury of their peers. With the bankruptcy now dismissed, we will move forward swiftly to lift the stay in the MDL and restart trial preparation.”
3M said in a statement that it and Aearo are continuing to pursue appeals and “are prepared to continue to defend the product in litigation.”
5 EYEWITNESS NEWS has been following the earplug litigation since 2018, when 3M paid $9 million to settle the first earplug claims from the Department of Justice. A flurry of lawsuits followed soon after.
Mediation in the case was ordered last fall and has started and stopped at various times, according to court filings. Just last month, 3M CEO Mike Roman was ordered by another federal judge to attend a mediation session.
Judge Graham noted that, with the dismissal of the bankruptcy filing, 3M and Aearo will likely “face significant waves of litigation” unless they reach a settlement.