3M Agrees to $6 Billion Settlement in Massive Military Earplug Lawsuit

The payment will be disbursed primarily over the next five years, according to the knowledgeable source.

3M (MMM.N) has reached an agreement to pay $6.01 billion to resolve approximately 260,000 lawsuits filed by current and former U.S. military personnel who alleged hearing loss due to the use of the company’s earplugs, a source familiar with the matter disclosed.

This settlement follows 3M’s earlier unsuccessful bid this year to transfer the massive litigation, which had burgeoned into the most extensive mass tort lawsuit in U.S. history, to bankruptcy court as an attempt to cap its financial obligations.

The payment will be disbursed primarily over the next five years, according to the knowledgeable source. Reports signaling an impending settlement caused a 5% upswing in 3M’s shares on Monday.

Analysts had estimated potential liabilities stemming from the earplug lawsuits at up to $10 billion.

Both a representative from 3M and legal representatives for the military service members declined immediate comment on the matter.

3M had acquired Combat Arms earplugs from Aearo Technologies in 2008.

These earplugs were used by the U.S. military from 2003 to 2015 during training and deployment, including missions in Afghanistan and Iraq.

Plaintiffs in the lawsuits asserted that 3M concealed design flaws, manipulated test outcomes, and failed to furnish proper instructions for the earplugs’ appropriate use, resulting in hearing impairments.

The legal actions were centralized before U.S. District Judge M. Casey Rodgers in Pensacola, Florida federal court in 2019, accounting for around 30% of federal court cases nationwide at their peak.

Of the 16 earplug cases that proceeded to trial, 3M lost 10, leading to a collective award of roughly $265 million to 13 plaintiffs.

Aearo declared bankruptcy in July 2022, with 3M committing $1 billion to address its earplug-related liabilities.

3M contended that the mass litigation was unjust as Judge Rodgers had excluded scientifically favorable evidence from the trials and permitted numerous unverified claims to congest the court’s docket.

Nevertheless, a bankruptcy judge dismissed the bankruptcy claim in June, determining that Aearo’s financial distress did not warrant such action.

The settlement announced on Monday follows a mere two months after 3M unveiled a tentative $10.3 billion accord with several U.S. public water systems to settle allegations of water contamination by per- and polyfluoroalkyl substances (PFAS), often referred to as “forever chemicals.”

However, this agreement remains pending, as 22 U.S. states and territories seek to thwart it, arguing that it inadequately holds 3M responsible.

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