3M Earplug Lawsuit Appeal Being Considered by Eleventh Circuit Panel

The decision could determine whether 3M earplug lawsuit rulings made by a federal district judge can be challenged by the manufacturer in bankruptcy court.

A panel of federal appellate judges is considering whether to lift a sanctions order that impacts 3M earplug lawsuits being pursued by tens of thousands of military veterans left with hearing loss, and will determine whether the manufacturer is barred from challenging prior decisions made by the presiding district court judge through bankruptcy proceedings.

A four-day hearing was held this week before the Eleventh Circuit Court of Appeals, involving a challenge filed by 3M Company, after they were granted an interlocutory appeal to immediately challenge a sanctions order that could have far reaching impacts on claims that will start to go before juries nationwide in the coming months if a settlement is not reached to resolve individual claims.

The litigation currently includes more than 255,000 lawsuits brought by U.S. military veterans, who were left with permanent hearing loss and tinnitus due to alleged design defects with 3M Combat Arms earplugs, which were standard military issue for all service members between 2003 and 2015.

Plaintiffs claim that 3M Company and it’s Aearo Technologies subsidiary knew the earplugs failed to properly seal the ear canal, yet continued to sell their product to the U.S. government, causing service members to be left without adequate ear protectors during combat and training exercises.

Given common questions of fact and law raised in the litigation, all claims brought throughout the federal court system have been centralized for the past three and a half years before U.S. District Judge Casey Rodgers in the Northern District of Florida, as part of an MDL or multidistrict litigation.

Following a series of massive damage awards returned by juries in early cases that went to trial in the MDL, the manufacturer decided to pursue a controversial 3M earplug lawsuit bankruptcy plan last year, attempting to put its fully owned subsidiary Aearo Technologies into bankruptcy, even though 3M is a multi-billion dollar parent company that is well funded and directly profited from sale of the earplugs for years.

Eleventh Circuit Weighing Whether to Lift 3M Earplug Lawsuit Sanctions

On June 9, U.S. Bankruptcy Judge Jeffrey Graham issued an order dismissing 3M’s Aearo bankruptcy filing, after determining the subsidiary was not in any real financial distress to warrant bankruptcy at this time. The company immediately filed an appeal to overturn the earplug bankruptcy decision, but an automatic stay on all litigation triggered by the original filing has terminated, allowing litigation to resume against Aearo in the MDL.

However, Judge Rodgers has decided to continue a stay in the MDL until the Eleventh Circuit weighs in on a sanctions order imposed late last year, which prevents 3M Company from attempting to shift blame to its Aearo subsidiary when the cases are remanded for trial to courts throughout the country.

On June 27, the Eleventh Circuit Court of Appeals began hearing oral arguments over whether to lift the sanctions, with 3M arguing that the injunction was improper.

If the company wins the appeal, and is also able to get the recent dismissal of the Aearo Technologies’ bankruptcy reversed, it may allow the company to raise new defenses in the claims that directly contradict prior positions the company has taken over the last four years of active litigation.

In late May, Judge Rodgers indicated that as soon as the appeals are decided. additional 3M earplug bellwether claims will be remanded for trial, with a group of five cases identified that will be returned to the U.S. District Court for the Middle District of Florida immediately. In addition, another 36 cases have been identified, which will be transferred to at least 17 different federal courts shortly after the first group is sent back to Florida. There are also hundreds of other claims actively being prepared for trial in several large waves selected before the bankruptcy proceedings.

July 2023 3M Earplug Settlement Update

During the pendency of this appeal, there is increasing pressure on 3M to consider settling claims, and Judge Rodgers ordered additional mediation efforts earlier this year, requiring the CEO of 3M Company to personally appear for some sessions. However, no global 3M earplug settlement has been announced.

Prior estimates had suggested the company would need to pay more than ten billion to settle the earplug lawsuits during early mediations. However, if pending appeals are unsuccessful and the Aearo bankruptcy dismissal is not overturned, the average cost of 3M earplug settlement protections are likely to increase dramatically.