The Settlement
According to the agreement, which was reached through a mediation process, the money will be paid out over the course of 2023 through 2029, with $5 billion in cash and $1 billion in 3M common stock. The agreement includes all lawsuits currently pending in the multidistrict litigation in Florida (3M Products Liability Litigation, MDL No. 2885) and in a coordinated state court action in Minnesota. Per 3M’s announcement, the agreement is not an admission of liability, and the company still maintains that its products “are safe and effective when used properly.” 3M also stated that it is prepared to continue to defend itself if certain agreed upon settlement terms are not met. 3M has the right to terminate the agreement if less than 98% of eligible claimants choose not to take part. However, Chris Seeger, one of the lead lawyers for the plaintiffs, is confident that the threshold will be met. Unlike a class action lawsuit, the plaintiffs in the MDL litigation will each receive a portion of the settlement payout based on their own individualized circumstances and injuries.
Plaintiff attorneys referred to the settlement as an historic agreement, stating that: “We are proud to have obtained this settlement, which ensures that those who suffered hearing damage will receive the justice and compensation they so rightly deserve.”
The Lawsuits’ Allegations
For over a decade, Aearo Technologies, Inc. (the company acquired by 3M in 2008), sold over 5.2 million pairs of its Combat Arms earplugs between 1999 and 2009, pursuant to a sales contract with the United States military. The earplugs were standard issue to service members throughout 2015, and were designed to prevent auditory damage and injuries. According to the numerous lawsuits filed by present and former service members, the earplugs did not insert properly into the ear due to a defective design, which resulted in service members sustaining hearing loss and other auditory injuries. The lawsuits also alleged that the company was aware of the defective design and its inability to provide noise protection, but it manipulated its testing results and did not advise its consumers of the issue. The company’s awareness of the problem, and its failure to cure the defect, became public when internal documents and a 1999 email from a 3M scientist admitting to such defects were unsealed by the court.
In 2018, 3M settled a government whistleblower lawsuit which alleged that the company knew, since at least 2000, that its earplugs posed a danger and were defective. After reaching a $9.1 million settlement in that case, a large number of lawsuits were filed alleging similar claims. In 2019, these lawsuits were eventually consolidated into a multidistrict litigation within the Northern District of Florida federal court. Out of the 16 bellwether trials that were conducted in the past few years, 3M lost ten of them, resulting in $265 million in total damages awarded to plaintiffs.
Expert Involvement
Expert Institute played a pivotal role in the 3M lawsuit by forming a close collaboration with the plaintiff firms. We dedicated resources to meticulously sourcing a wide array of specialists, including experts in audiology, neurotology, and otolaryngology. This effort was crucial in providing comprehensive and authoritative expertise in these complex medical fields. Expert Institute's contribution not only enhanced the depth of the legal strategy but also ensured that the most relevant and up-to-date scientific knowledge was at the forefront of the case, significantly bolstering the plaintiff's position.
The Future of 3M
Although the settlement agreement is a significant step towards disposition, 3M’s future is far from certain. Earlier this summer, the company’s bankruptcy filing was dismissed after the judge found that it was not in enough financial distress to warrant bankruptcy. It is estimated that 3M’s potential liability from the litigation can reach $10 billion. In addition, two months prior to the earplug settlement, 3M announced another tentative agreement in the amount of $10.3 billion to settle water pollution claims. The water pollution allegations claim that 3M’s firefighting foam products contained per- and polyfluoroalkyl substances (“PFAS”), also known as “forever chemicals” due to the inability of the environment and human body to break them down. The plaintiffs in these suits claim that 3M’s PFAS, which are linked to cancer, hormonal dysfunction, and environmental damage, have polluted various U.S. waterway systems. The agreement is not final, and 22 states and territories have indicated that they will fight against it.
As to the earplug settlement, 3M did experience a 5% rise in stock shares once news of an imminent settlement was released.
