In a landmark agreement, 3M has agreed to pay $6.01bn to settle lawsuits brought by United States military veterans and service members who claim to have suffered hearing loss from using the company’s earplugs. The settlement, which includes $5bn in cash and $1bn in 3M stock, will be made in installments spanning until 2029. While 3M maintains that it is not admitting liability and asserts that the earplugs are safe and effective when used correctly, this resolution marks a significant development in the largest mass tort litigation in US history.
Earlier this year, 3M attempted to shift the lawsuits to bankruptcy court in an effort to limit its liability but was unsuccessful. The company now faces the responsibility of compensating an estimated 240,000 eligible claimants, with the option to withdraw from the deal if less than 98 percent of claimants decide to participate. However, lead attorney Chris Seeger expressed confidence that the threshold will be met.
Seeger, along with co-lead attorneys Bryan Aylstock and Clayton Clark, hailed this agreement as a momentous victory for the brave individuals who have served the country and experienced life-altering hearing injuries. Meanwhile, the market responded positively to the settlement, with 3M’s shares rising more than two percent following reports of an imminent resolution. Some analysts had previously estimated the company’s potential liability from the earplug litigation to be as high as $10bn.
The Combat Arms earplugs, which are at the center of the lawsuits, were manufactured by Aearo Technologies, a company acquired by 3M in 2008. These earplugs were utilized by the US military between 2003 and 2015, including in combat zones like Afghanistan and Iraq. Plaintiffs argue that 3M concealed design flaws, manipulated test results, and failed to provide proper instructions for using the earplugs, ultimately leading to hearing damage.
The lawsuits were consolidated before US District Judge M Casey Rodgers in Pensacola, Florida, federal court in 2019. At its peak, this litigation accounted for approximately 30 percent of all federal court cases nationwide. Out of the 16 earplug cases that went to trial, 3M lost 10, resulting in a total of $265m awarded to 13 plaintiffs. These verdicts are included in the $6.01bn settlement amount.
Additionally, Aearo filed for bankruptcy in July 2022, prompting 3M to pledge $1bn to cover its liabilities related to the earplug lawsuits. However, a bankruptcy judge dismissed the bankruptcy in June, determining that Aearo did not face enough financial distress to justify such action.
While defending its position, 3M argued against the fairness of the mass tort litigation, claiming that Judge Rodgers had excluded scientific evidence favorable to the company from trials and allowed numerous unverified claims to burden the court docket. Despite these contentions, 3M prominently expressed in the settlement announcement that the agreement does not imply any admission of liability. The company stands firm in asserting the safety and effectiveness of the earplugs, and it is prepared to continue defending itself in the ongoing litigation if certain agreed terms of the settlement agreement are not met.
This settlement follows hot on the heels of 3M’s tentative $10.3bn deal with various US public water systems to address allegations of water pollution caused by per- and polyfluoroalkyl substances (PFAS) known as “forever chemicals.” Although the deal is not yet finalized, it received a boost as 22 US states and territories withdrew their previous objections.
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