3M Earplug Lawsuits Account for 30% of Federal Case Docket, As Settlement Negotiations and Trial Prep Continue

3M Company has seen a sharp drop in stock value since 2017, under the weight of enormous liability from military earplug lawsuits and PFAS water contamination, according to new analysis

With more than 230,000 U.S. military veterans currently pursuing 3M earplug lawsuits, alleging that they were left with hearing loss or tinnitus following the use of 3M’s Combat Arms eaplug during military service, a new report suggests that the litigation represents up to 30% of the civil caseload in the U.S. federal court system.

Each of the lawsuits raise similar allegations, claiming that the reversible earplug, which were standard issue equipment before all deployments between 2004 and 2015, were defectively designed and failed to provide adequate ear protection for service members.

Millions in damages have been awarded by juries in a handful of early cases that have gone to trial, and the U.S. District Judge presiding over the litigation has ordered a series of 3M earplug settlement talks before starting to remand thousands of cases back to U.S. District Courts nationwide for trial.

According to a recent report by Reuters News, the cases already account for nearly one out of every three cases pending in U.S. federal courts, and the judge presiding over the litigation is preparing to “flood” U.S. District Courts with the claims ready for trial if the parties are unable to reach a settlement.

Given common questions of fact and law presented in claims brought throughout the federal court system, all of the 3M earplug hearing loss lawsuits were consolidated as part of an MDL (multidistrict litigation) in early 2019, which are centralized before U.S. District Judge Casey Rodgers in the Northern District of Florida for coordinated discovery and pretrial proceedings.

A recent financial analysis by Seeking Alpha described 3M’s current state of litigation as a “bloodbath,” which has already cost the company about 50% of its stock value since 2017.

The litigation risks come from the massive number of Combat Arms 3M earplug lawsuits, as well as a growing number of lawsuits linked to per- and polyfluoralkyl substances (PFAS) lawsuits, primarily in the form of water contamination claims filed by various communities nationwide, and individual and class action firefighter foam lawsuits filed by private citizens and firefighters who developed cancer after being exposed to aqueous film-forming foam (AFFF) products used by civilian and military firefighters.

3M Earplug Lawsuits Bankruptcy Filing

While working to prepare thousands of individual cases for remand to U.S. District Courts nationwide for early trial dates, 3M Company announced over the summer that its Aearo Technologies subsidiary was declaring bankruptcy, and the company attempted to shift the earplug-related hearing loss lawsuits into the bankruptcy system, even though it had billions in assets to cover the claims as the parent company.

However, after a federal bankruptcy judge rejected this attempt in August 2022, ruling that 3M must continue to face the hearing loss lawsuits while its Aearo Technologies unit moves through the bankruptcy system, the parties have been directed to resume preparing claims for trial.

Following that decision, Judge Rodgers ordered the parties to participate in a series of earplug settlement talks, before the Court begins sending waves of cases back to U.S. District Courts nationwide where they originally would have been filed.

After Judge Rodgers determined that those initial talks were “worthwhile and productive”, she ordered the parties to continue to meet this month.

3M Allowed to Challenge MDL Judge’s Rulings in Bankruptcy Court

Throughout the litigation, 3M has bristled over Judge Rodgers’ rulings and, earlier this month the U.S. Appeals Court for the Eleventh Circuit issued a ruling (PDF) that company can attempt to overturn some of her rulings in the bankruptcy proceedings for it’s Aearo Technologies subsidiary, which she had expressly prohibited in an earlier ruling. Judge Rodgers has called 3M’s attempt to saddle its bankrupt Aearo subsidiary with liability for the earplugs an act of “naked duplicity” on behalf of the parent company.

In addition, on October 13, the U.S. Court of Appeals for the Seventh Circuit ruled that 3M could pursue an accelerated appeals process to attempt to overturn the original bankruptcy ruling in August, which allows the cases to go forward despite the Aearo bankruptcy filing.

Seeking Alpha indicated 3M, and its investors, face a high degree of “uncertainty” as the massive litigation moves forward and warned the earplug lawsuits could further degrade the stock’s value.

October 2022 3M Earplug Lawsuit Update

While the settlement negotiations continue, Judge Rodgers is also preparing multiple tracks of claims for trial, which will include waves of lawsuits being remanded back to their originating federal courts nationwide.

However, Judge Rodgers is pushing for a settlement agreement which she hopes will prevent a massive, and expensive, caseload from being dumped on federal courts across the country.

With the average 3M earplug lawsuit payout per person likely to range widely depending on the extent and duration of each veteran’s hearing loss, analysts have provided a wide range of estimates for the total cost of a 3M earplug settlement, which could be between $10 billion and more than $100 billion, depending on how future claims are handled.