3M to pay $6B settlement for alleged hearing loss caused by military earplugs.
3M Agrees to $6 Billion Settlement in Earplug Lawsuit
3M, the Minnesota-based company, has reached a landmark settlement of $6 billion with individuals who claimed to have suffered hearing loss from earplugs produced by its subsidiary Aearo Technologies. The settlement, which will be paid out over six years starting in 2023, includes $5 billion in cash and $1 billion in 3M common stock.
Despite agreeing to the settlement, 3M maintains that it is not admitting any liability. The company asserts that all the earplugs in question are safe and effective when used properly.
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3M emphasizes that it is prepared to defend itself in the litigation if certain agreed terms of the settlement are not fulfilled.
The combat earplugs at the center of the settlement were manufactured by Aearo Technologies, a company acquired by 3M in 2008. These earplugs were used by the U.S. military from 2003 to 2015, including in Afghanistan and Iraq.
Over 230,000 military veterans and service members alleged that the earplugs were defective and caused hearing loss and tinnitus. They claimed that 3M concealed design flaws, manipulated test results, and failed to provide proper instructions for use, resulting in hearing damage during military activities.
Failed Bankruptcy Attempt
The lawsuits against 3M and Aearo represent the largest-ever multi-district litigation in U.S. history, with nearly 330,000 cases filed and approximately 260,000 pending cases. These cases were consolidated before U.S. District Judge M. Casey Rodgers in Pensacola, Florida, federal court in 2019.
Analysts estimate that 3M’s potential liability from the earplug litigation could reach $10 billion. Earlier this year, 3M’s attempt to place Aearo Technologies into Chapter 11 bankruptcy, in an effort to protect itself from the lawsuits, was rejected by a federal judge.
According to 3M, this settlement agreement is intended to resolve all claims associated with the Combat Arms Earplug products. It includes claims in the multi-district litigation in Florida and the coordinated state court action in Minnesota, as well as potential future claims.
The settlement will result in a pre-tax charge of approximately $4.2 billion for 3M in the third quarter of 2023.
‘Just and Deserved’ Compensation to Veterans
Bryan Aylstock, the court-appointed lead plaintiffs’ counsel, expressed confidence that the $6 billion settlement will receive overwhelming support. He believes that the settlement not only holds 3M accountable but also provides just and deserved compensation to veterans.
This settlement comes shortly after 3M agreed to pay over $6.5 million to resolve charges related to its Chinese subsidiary funding trips for Chinese officials. These trips were intended to boost company sales and included various entertainment activities.
3M continues to face legal challenges but remains committed to resolving these issues and providing compensation to those affected.
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