3M to pay $6 billion to settle military earplug hearing loss claims

Minnesota manufacturing giant 3M announced a $6 billion settlement
Tuesday morning with over 200,000 military service members who have
claimed to suffer hearing loss after using the company’s earplugs. 

agreement, to be paid out through 2029, includes $5 billion in cash and
$1 billion in 3M stock. It would settle all current and future claims
against 3M and its subsidiary Aearo Technologies, including ongoing
multi-district litigation in Florida and a Minnesota state court action.

Aearo, which was acquired by 3M in 2008, sold its Combat Arms
earplugs to the U.S. military from 1999 through 2015. The earplugs were
standard issue hearing protection for service members during that time,
and claims against the company started pouring in shortly afterward,
with service members alleging the company had hidden design flaws and
failed to properly instruct them on the earplugs’ proper use.

2019, a federal judge consolidated hundreds of thousands of suits into a
multi-district litigation action in Pensacola, Florida. 

then, 3M lost 10 of the 16 bellwether cases that went to trial. Juries
awarded about $265 million to 13 plaintiffs. Another such trial was
scheduled to begin next month in Minnesota state court.

An effort to resolve earplug claims in bankruptcy court last year did not fly with
an Indiana federal judge, who found that Aearo’s status as a subsidiary
of 3M meant that it had no impending risk of insolvency and that a
settlement could feasibly be reached outside of bankruptcy proceedings. 

3M, based in the St. Paul suburb of Maplewood, told investors Tuesday that the settlement was not an admission of liability.

products at issue in this litigation are safe and effective when used
properly,” the company said in a statement. “3M is prepared to continue
to defend itself in this litigation if certain agreed terms of the
settlement agreement are not fulfilled.” 

The company’s investors
breathed a figuratively audible sigh of relief Monday and Tuesday upon
learning that a settlement was coming: Company stock saw an
approximately 7% jump between Monday morning and Tuesday morning.

the $6 billion settlement is colossal, some analysts estimated that the
company could be liable for as much as $10 billion in earplug

The end of litigation over its earplugs — one of the
largest mass torts in U.S. history, at one point accounting for about
30% of all federal court cases nationwide — would be a boon to the
Scotch Tape and Post-It manufacturer, but 3M has other irons in the
litigation fire.

3M is still awaiting court approval of its $10.3 billion settlement
with cities and public water agencies whose water systems have been
impacted by polyfluoroalkyl substances, carcinogenic “forever chemicals”
the company introduced for use in firefighting foam, clothing and
nonstick cookware. 

Several state attorneys general have opposed that settlement, arguing
its indemnifications of 3M are too broad and that it does not do enough
to protect drinking water in the future; however at 3M’s investor
conference call Tuesday, 3M Executive Vice President Kevin Rhodes said
that those attorneys general had agreed to withdraw their objections
after further negotiation.

3M also faces claims related to its
subsidiary Arizant Healthcare’s Bair Hugger forced air warming device,
which some patients have claimed was defectively designed such that it
introduced contaminants into their surgical wounds.