Manufacturing company 3M is creating a $1 billion trust to resolve thousands of lawsuits from U.S. service members who suffered the effects of faulty earplugs, the company announced Tuesday.
Three years after lawsuits began over 3M’s Combat Arms earplugs made by its Aearo Technologies subsidiary, the company said Aearo has begun chapter 11 bankruptcy and has sought court supervision to establish the trust. The $1 billion total is being funded by 3M after the amount was estimated to resolve all claims “determined to be entitled to compensation.”
3M said although the earplugs “were effective and safe when used properly,” some 235,000 lawsuits have been filed and remain pending against 3M as of June 30. The company has lost 10 cases totaling $300 million in judgments that have yet to be paid out amid appeals.
3M said the cases could take years or even decades to litigate individually, whereas the bankruptcy and trust will allow a quicker and fairer resolution. Plaintiffs can submit claims to bankruptcy court instead of going through court cases to settle cases.
“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,” 3M said in its press release.
The bankruptcy process and the trust aren’t expected to disrupt Aearo’s operations or 3M as a whole.
“We have great respect for the brave men and women who protect us, and remain committed to the military as an active partner and valued customer going forward,” said 3M chairman and chief executive officer Mike Roman. “We determined that taking this decisive action now will allow 3M and Aearo Technologies to address these claims in a way that is more efficient and equitable than the current litigation.”
3M also set aside an additional $240 million for expenses related to the case and has said it is ready to provide additional funding if required by its agreement.
3M’s Combat Arms earplugs were a double-ended ear plug that claimed to block out maximum possible sounds on one side, while blocking significantly loud noises and still enabling conversations on the other side. Service members were left with permanent hearing loss and ringing of the ears, prompting widespread lawsuits alleging 3M knew the earplugs were defective and sold them anyway.
Bryan Aylstock, lead counsel for the plaintiffs, said “3M’s bankruptcy maneuver is further proof that they value their profits and stock price more than the well-being of veterans who fought and served our country. We will challenge this bankruptcy filing and are confident 3M will fail in the courts.”