3M Earplug Settlement May Result in $5.5B Payout to Resolve Veterans’ Hearing Loss Lawsuits: Report

Following a U.S. Bankruptcy Judge’s decision to allow hearing loss lawsuits against 3M Company to move forward to trial, reports suggest that the manufacture has proposed a $5.5 billion earplug settlement to resolve hundreds of thousands of personal injury claims being pursued by U.S. military veterans.

3M Company currently faces nearly 300,000 lawsuits brought by U.S. military veterans left with permanent hearing loss and tinnitus due to alleged design defects with the company’s Combat Arms earplugs, which were standard military issue for all service members between 2003 and 2015.

Plaintiffs claim that 3M Company and it’s Aearo Technologies subsidiary knew the earplugs failed to properly seal the ear canal, yet continued to sell their product to the U.S. government, causing service members to be left without adequate ear protectors during combat and training exercises.

Given common questions of fact and law raised in the litigation, all claims brought throughout the federal court system have been centralized for the past three and a half years before U.S. District Judge Casey Rodgers in the Northern District of Florida, as part of an MDL or multidistrict litigation.

Following a series of massive damage awards returned by juries in early cases that went to trial in the MDL, the manufacturer decided to pursue a controversial 3M earplug lawsuit bankruptcy plan last year, attempting to put its fully owned subsidiary Aearo Technologies into bankruptcy, even though 3M is a multi-billion dollar parent company that is well funded and directly profited from sale of the earplugs for years.

Bankruptcy Judge Lifts Stay on Earplug Lawsuits

In June, U.S. Bankruptcy Judge Jeffrey Graham issued an order dismissing 3M’s Aearo bankruptcy filing, after determining the subsidiary was not in any real financial distress to warrant bankruptcy at this time. The company immediately filed an appeal to overturn the earplug bankruptcy decision, but an automatic stay on all litigation triggered by the original filing has terminated, allowing litigation to resume against Aearo in the MDL.

On Friday, Judge Graham again refused to temporarily halt the litigation, saying that the company’s appeal of his decision could not be used to prevent Combat Arms earplug lawsuits from moving toward trial. 3M has said it intends to appeal that ruling.

Now, according to an August 27 report by Bloomberg News, 3M has put forward a $5.5 billion earplug lawsuit settlement proposal which would, if approved, resolve the litigation and prevent the federal court system from being flooded with hundreds of thousands of trials. The settlement would be paid to plaintiffs over the course of five years, according to the report.

The decision comes even as the Eleventh Circuit is considering an appeal of Judge Graham’s original dismissal of the bankruptcy plan. If the company wins the appeal and is also able to get the recent dismissal of the Aearo Technologies’ bankruptcy reversed, it may allow the company to raise new defenses in the claims that directly contradict prior positions the company has taken over the last four years of active litigation.

Observers say the proposed settlement is about half of what analysts expected, who predicted 3M would have to pay out $8 billion to $10 billion to resolve the litigation. 3M has lost 10 of the 16 cases that have gone before juries so far, resulting in more than $250 million in damages awarded to service members.