3M to settle US military earplug lawsuit for $6 billion

The Minnesota Mining and Manufacturing Company (3M)has agreed to pay $6.01 billion to resolve claims filed by U.S. military veterans and service members, alleging hearing loss as a result of using the firm's earplugs, the company and plaintiffs' lawyers announced on Tuesday.

The agreement follows 3M's unsuccessful attempt earlier this year to take the claims, which had ballooned into the biggest mass tort litigation in US history, into bankruptcy court with the intention of reducing its culpability.

Chris Seeger, the primary lawyer representing the plaintiffs, said that around 240,000 people willbe eligible for the settlement. 3M has the option to back out of the arrangement if less than 98 per cent of qualified claimants participate, but Seeger is optimistic that the threshold will be fulfilled.

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The funds will be distributed from 2023 to 2029, with $1 billion paid out in 3M stock, according to a statement by the company. The Minnesota-based firm stated that it is not accepting responsibility and that the earplugs "are safe and effective when used properly."

"This historic agreement represents a tremendous victory for the thousands of brave men and women who bravely served our country and returned home with life-altering hearing injuries," said Seeger and his co-lead attorneys, Bryan Aylstock and Clayton Clark, in a joint statement.

On Tuesday, 3M's stock was up more than twoper cent. According to some experts, the company's possible exposure from the earplug case might be as high as $10 billion.

3M's litigation saga

Aearo Technologies, which 3M purchased in 2008, manufactured the Combat Arms earplugs. From 2003 through 2015, the US military utilised them in training and battle, particularly in Afghanistan and Iraq.

Plaintiffs in the claims say that the business concealed design faults, manipulated test findings, and failed to give instructions for proper earplug use, resulting in hearing impairment.

In 2019, the complaints were consolidated before U.S. District Judge M. Casey Rodgers in federal court in Pensacola, Florida. At its peak, the lawsuit accounted for over 30% of all federal court cases in the United States.

3M has lost 10 of the 16 earplug claims that have gone to trial, for a total of $265 million awarded to 13 plaintiffs. The $6.01 billion figure includes the judgments. Moreover, Aearo declared bankruptcy in July 2022, with 3M guaranteeing $1 billion to cover its earplug litigation obligations.

3M claimed that the mass tort action was unjust because Rodgers excluded favourable scientific data and allowed thousands of "unvetted" claims to clog the court's docket.

However, in June, a bankruptcy court dismissed the bankruptcy, ruling that Aearo was not in enough financial trouble to warrant it.

The agreement reached on Monday comes only two months after 3M struck a tentative $10.3 billion deal with a slew of public water systems in the United States to address allegations of water contamination caused by per- and polyfluoroalkyl substances, or PFAS, sometimes known as "forever chemicals."

Although the agreement is not yet complete, 22 U.S. states and territories withdrew their previous objections to it on Monday.

(Inputs from Reuters)

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