3M Declares Bankruptcy and Creates Trust to End Earplug Lawsuits

3M announced it will create a $1 billion trust fund and declared bankruptcy of one of its subsidiaries to resolve approximately 250,000 hearing damage claims. The claims have been filed mostly by U.S. military veterans who blame the company’s allegedly faulty Combat Arms Earplugs version 2 (CAEv2) for their hearing loss or tinnitus, a persistent ringing in the ears.

A July 26 press release issued by 3M states that as part of the resolution, a subunit of the company that originally manufactured the military-issued earplugs, Aearo Technologies, will file for chapter 11 bankruptcy.

The chapter 11 proceedings will seek court supervision to help establish a trust that will be funded by 3M “to efficiently and equitably resolve all claims determined to be entitled to compensation,” the company stated, adding, “The well-established chapter 11 process is intended to achieve an efficient and equitable resolution, reduce uncertainty, and increase clarity for all stakeholders while reducing the cost and time that could otherwise be required to litigate thousands of cases.”

To date, 16 bellwether trials have been concluded, with juries having awarded 13 plaintiffs across 10 cases a total of $300 million in damages. 3M was cleared of liability in the remaining six trials.

In addition to the $1 billion trust fund, 3M announced it would commit an additional $240 million to fund projected related case expenses. According to the announcement, the trust fund would also resolve claims related to discontinued Aearo Technologies mask and respirator products utilized to reduce workplace exposure to asbestos, silica, coal mine dust or occupational dust.

According to NBC News, some plaintiffs and veteran’s attorneys have characterized 3M’s resolution to end the litigation “inadequate.” Plaintiff Joseph Sigmon said in a statement to NBC News, “3M believes each veteran’s hearing damage is worth less than $5,000. Would 3M CEO Mike Roman want to lose his hearing in exchange for $5,000? Our fight has just begun, and 3M will regret taking on those who served our nation and defended the values 3M treats with such contempt.”

3M acquired Aearo Technologies in 2008. CAEv2 was supplied to the U.S. military from 2003 until 2015 and was the only hearing protection device offered to soldiers from 2003 until 2012. Most veterans who filed hearing damage claims against 3M served in the Iraq and Afghanistan wars.

CAEv2 litigation is believed to be the largest mass tort litigation adjudicated in U.S. multidistrict litigation history. The first CAEv2 claim was filed in 2019. Many veterans who filed claims against 3M were unaware of the link between CAEv2 and their hearing damage until a whistleblower lawsuit filed against Aearo Technologies by a rival earplug maker was settled with the U.S. Department of Justice in 2018 for $9.1 million.

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