3M, the multinational conglomerate, has reached a landmark settlement worth $6.01 billion to address the claims of approximately 260,000 current and former U.S. military service members who allege hearing loss due to the use of the company’s earplugs. The agreement was confirmed by a reliable source familiar with the situation.
This resolution comes in the wake of a previous attempt by 3M earlier in the year to transfer the lawsuits, which had grown into the largest mass tort litigation in U.S. history, to bankruptcy court, with the aim of limiting its legal responsibility. Under the newly reached settlement, the funds will be disbursed predominantly over the course of the next five years, as shared by the individual familiar with the agreement.
The news of the settlement led to a 5% surge in 3M’s shares on Monday.
Prior to this agreement, certain analysts’ projections of 3M’s potential financial obligation stemming from the earplug litigation had reached as high as $10 billion.
Requests for comments from a 3M spokesperson and lawyers representing the service members remained unanswered at the time of reporting.
The earplugs in question, known as Combat Arms earplugs, were manufactured by Aearo Technologies, a company acquired by 3M in 2008. They were utilized by the U.S. military during training and combat between 2003 and 2015, including deployments in Afghanistan and Iraq.
Plaintiffs in these lawsuits assert that 3M concealed design flaws, manipulated test results, and omitted proper usage instructions for the earplugs, leading to irreversible hearing impairment.
These legal actions were consolidated before U.S. District Judge M. Casey Rodgers in Pensacola, Florida federal court in 2019. Remarkably, the litigation reached a peak, comprising approximately 30% of all federal court cases nationwide. Among the 16 earplug cases that have progressed to trial, 3M faced defeat in 10 instances, resulting in approximately $265 million awarded to 13 plaintiffs collectively.
Back in July 2022, Aearo filed for bankruptcy, prompting 3M to commit $1 billion to address the liabilities arising from the earplug-related lawsuits.
3M’s defense centered around its claim of unfair treatment during the mass tort litigation, asserting that Judge Rodgers had excluded scientifically supportive evidence during trials and permitted numerous unverified claims to inundate the court proceedings.
In June, a bankruptcy judge dismissed the bankruptcy claim, contending that Aearo’s financial condition did not warrant such an action.
This settlement follows closely on the heels of another significant legal development for 3M, as the company unveiled a preliminary $10.3 billion agreement with various U.S. public water systems to address claims of water contamination caused by per- and polyfluoroalkyl substances, commonly known as “forever chemicals.” Nevertheless, the acceptance of this agreement remains pending, with 22 U.S. states and territories seeking to prevent its approval, asserting that it inadequately holds 3M accountable for the consequences of the pollution.
