Veterans Fight 3M Healthcare Spinoff
A group of veterans who are plaintiffs in the sprawling defective military earplug multidistrict litigation (MDL) against 3M are suing the company over its plans to form a separate entity for its $8 billion healthcare product division.
The lawsuit was filed Sept. 1 in Pensacola, FL, the same district where 3M is facing approximately 230,000 Combat Arms Earplug version 2 (CAEv2) cases consolidated in the MDL, which is believed to be the largest in U.S. history. The veterans accuse 3M of selling faulty earplugs to the U.S. military that caused them to develop hearing loss or tinnitus, a chronic condition that presents as a persistent ringing in the ears.
CAEv2 was the only hearing-protection device that was sold to the U.S. military from 2002–2012. The dual-ended devices were supposed to protect soldiers’ hearing during combat or training exercises, while also allowing them to hear field commands, depending upon which side of the earplug was inserted into the ear canal. The lawsuits claim that soldiers were unaware that the earplugs had a loose fit, which resulted in their damaged hearing.
3M announced its plan to create a healthcare spinoff in July, citing that the move would allow the company to have greater control over its own brand, the Minneapolis/St. Paul Business Journal reported. But veterans say that 3M is creating the spinoff to protect its assets from the ongoing earplug litigation.
The company has set aside $1 billion in a trust to compensate veterans that have filed hearing damage claims. But that trust is contingent upon Chapter 11 bankruptcy protection for 3M’s subunit, Aearo Technologies, the company that made CAEv2 from 2002–2015.
At the end of August, a bankruptcy court judge in Indianapolis, where Aearo is headquartered, denied a stay on CAEv2 litigation while Chapter 11 proceedings occur. 3M announced it would appeal that decision.
Legal experts have stated that 3M will need much more than $1 billion to settle the MDL.
Judge Casey Rodgers, who is overseeing the MDL in the Northern District of Florida, is expected to hear the veterans’ complaints against 3M’s plan to form a new health care company.