3M has agreed to pay $6.01bn to settle lawsuits by United States military veterans and service members who say they suffered hearing loss from using the company’s earplugs, according to the company and lawyers for the plaintiffs.
The settlement, consisting of $5bn in cash and $1bn in 3M stock, will be made in payments that will run through 2029. The Minnesota-based company said it was not admitting liability and that the earplugs “are safe and effective when used properly”.
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The deal comes after a failed attempt by 3M earlier this year to move the lawsuits, which had grown into the largest mass tort litigation in US history, into bankruptcy court in the hope of limiting its liability.
About 240,000 people are expected to be eligible for the settlement, Chris Seeger, a lead lawyer for the plaintiffs, said at a press conference. 3M has the right to walk away from the deal if less than 98 percent of eligible claimants decide to participate, but Seeger said he was confident that the threshold would be met.
“This historic agreement represents a tremendous victory for the thousands of men and women who bravely served our country and returned home with life-altering hearing injuries,” Seeger and his co-lead attorneys, Bryan Aylstock and Clayton Clark, said in a joint statement on Tuesday.
3M’s shares were up more than two percent on Tuesday. They closed 5.2 percent higher on Monday on earlier reports that a settlement was imminent. Some analysts’ estimates of the company’s potential liability from the earplug litigation had been as high as $10bn.
The Combat Arms earplugs were made by Aearo Technologies, a company 3M acquired in 2008. They were used by the US military in training and combat from 2003 to 2015, including in Afghanistan and Iraq.
Plaintiffs in the lawsuits claim that the company hid design flaws, fudged test results and failed to provide instructions for properly using the earplugs, leading to hearing damage.
The lawsuits were consolidated before US District Judge M Casey Rodgers in Pensacola, Florida, federal court in 2019. At its height, the litigation accounted for about 30 percent of all federal court cases nationwide.
Of 16 earplug cases that have gone to trial, 3M has lost 10, with about $265m being awarded in total to 13 plaintiffs. Those verdicts are included in the $6.01bn amount.
Aearo filed for bankruptcy in July 2022, with 3M pledging $1bn to fund its liabilities stemming from the earplug lawsuits.
Not an admission of liability
3M argued that the mass tort litigation was unfair because Rodgers had kept scientific evidence favourable to the company out of trials and allowed thousands of “unvetted” claims to swell the court’s docket.
However, a bankruptcy judge in June dismissed the bankruptcy, finding that Aearo was not in enough financial distress to justify it.
In Tuesday’s announcement, 3M maintained that the agreement – which includes all claims in Florida’s multidistrict litigation, coordinated state court action in Minnesota, and potential future claims – was not an admission of liability.
“The products at issue in this litigation are safe and effective when used properly,” the company wrote. “3M is prepared to continue to defend itself in the litigation if certain agreed terms of the settlement agreement are not fulfilled.”
Monday’s settlement comes just two months after 3M announced a tentative $10.3bn deal with a host of US public water systems to resolve claims of water pollution by per- and polyfluoroalkyl substances, or PFAS, known as “forever chemicals”.
That deal is not yet final, but it cleared one potential hurdle on Monday as 22 US states and territories withdrew their earlier objections.