3M Could Face ‘Bankruptcy’ Over Defective Earplugs

One of the nation’s industrial conglomerates could be facing bankruptcy in a long-running legal case involving defective earplugs.
That’s according to J.B. Heaton, who Bloomberg describes as a litigation consultant and adviser to attorneys for hundreds of thousands of veterans suing 3M. He appeared before a federal bankruptcy court in Indiana this week in a case addressing how the company could handle those lawsuits.
3M acquired the maker of Combat Arms earplugs 15 years ago. The plugs were used by the U.S. military from 2003 to 2015, but a flawed design made them too short to properly fit — leaving hundreds of thousands of veterans with hearing loss or ringing in the ears.
The company settled a U.S. government lawsuit for more than $9 million in 2018 — in which it did not admit wrongdoing — but it could still be on the hook for damages from more than 230,000 additional lawsuits pending before a federal judge in Florida.
Last month, in an effort to resolve those lingering cases, the company filed for Chapter 11 bankruptcy protection for its Aearo Technologies subsidiary, which would freeze any lawsuits against it. The proceedings this week reportedly involve whether a judge will agree to also shield 3M from those suits.
A small number of lawsuits have already concluded, and Heaton told the judge that based on those results, 3M could face more than $100 billion in losses and that the chances of 3M going through bankruptcy were “more and more likely.”
Reuters reports that plaintiffs have been successful in 10 of 16 cases so far, awarding some $265 million to 13 service members.
3M, for its part, strongly disputed the testimony of the plaintiffs’ hired expert, both in the courtroom and at its St. Paul, Minnesota, headquarters.
In court, 3M attorneys argued that the number of verdicts was far too small to make any determination about the remaining 200,000-plus cases.
A company spokesman, meanwhile, told Bloomberg that Heaton’s testimony was “unsupported and clearly flawed speculation.” 3M says it has committed to set up a $1 billion fund for those deemed eligible for compensation over hearing loss.