3M, the multinational conglomerate, has consented to a substantial settlement of $6.01 billion to resolve close to 260,000 lawsuits filed by current and former U.S. military service members who allege suffering hearing loss due to defective earplugs manufactured by the company. The agreement was disclosed by an individual familiar with the matter.
This resolution comes as a culmination of a prolonged legal battle. Earlier this year, 3M had attempted to transfer the lawsuits, which had evolved into the largest mass tort litigation in U.S. history, into bankruptcy court, aiming to limit its financial liability. However, this endeavor was unsuccessful.
The payout will be dispersed mainly over the next five years, according to the same source acquainted with the agreement. Speculation surrounding the settlement prompted a 5% increase in 3M’s shares on Monday. Prior to the settlement, analysts had estimated potential liabilities stemming from the earplug litigation to be as high as $10 billion.
Neither a 3M spokesperson nor the legal representatives of the service members responded immediately to requests for comments on the settlement.
The Combat Arms Earplugs
The earplugs in question, known as Combat Arms earplugs, were initially manufactured by Aearo Technologies, a company that 3M acquired in 2008. These earplugs were utilized by the U.S. military during training and combat between 2003 and 2015, including deployments in conflict zones such as Afghanistan and Iraq.
The lawsuits asserted that 3M concealed design flaws, manipulated test results, and omitted proper usage instructions, ultimately leading to hearing impairment among service members.
Consolidated under U.S. District Judge M. Casey Rodgers in Pensacola, Florida federal court in 2019, the litigation swelled to account for roughly 30% of all federal court cases across the nation.
Of the 16 earplug cases that proceeded to trial, 3M incurred losses in 10, resulting in approximately $265 million in awards distributed to 13 plaintiffs in total.
Aearo filed for bankruptcy in July 2022, and 3M committed $1 billion to cover its liabilities arising from the earplug lawsuits. 3M contended that the mass tort litigation was unjust, claiming that Judge Rodgers had excluded favorable scientific evidence during trials and allowed numerous “unvetted” claims to inundate the court’s docket.
In June, however, a bankruptcy judge dismissed the bankruptcy filing, deeming Aearo’s financial condition insufficient to warrant such action.
This settlement follows a mere two months after 3M unveiled a tentative $10.3 billion accord with several U.S. public water systems to address claims of water contamination by per- and polyfluoroalkyl substances (PFAS), commonly referred to as “forever chemicals.” Despite the tentative agreement, 22 U.S. states and territories are seeking to thwart it, arguing that the deal does not adequately hold 3M accountable for its actions.