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3M Pursues Bankruptcy: What Does it Mean for Combat Earplugs Plaintiffs? 

“Efficient and equitable.”

That is the phrase industrial manufacturing conglomerate 3M used four times within 600 words in a statement announcing a move to use bankruptcy to settle an ever-growing torrent of claims against it in In Re: 3m Combat Arms Earplug Products Liability Litigation, the largest multidistrict litigation in history.

In doing so, the company has embraced what is becoming a go-to strategy for large mass tort defendants facing intense liability: When the going gets tough, go bankrupt.

And it has done so in the most pre-emptive manner to date, something that should concern mass tort professionals, who must now become more proactive in anticipating such strategic and evasive techniques.      

Bankruptcy as Offense, Not Defense?

3M announced in a statement released on July 26th that its subsidiary Aearo Technologies was filing for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Southern District of Indiana. Additionally, 3M said Aearo would seek to establish a trust through the U.S. Bankruptcy Court, and that 3M would fund the trust on Aearo’s behalf, contributing more than $1 billion for starters.

The trust covers funds for settlements that have yet to be reached, mind you, and the $1 billion may prove to be a sliver of the eventual sum that may accumulate—even in bankruptcy court. Yet 3M is tipping its hand now to get out in front of any and all potential liability.   

“We have great respect for the brave men and women who protect us and remain committed to the military as an active partner and valued customer going forward,” 3M chairman and chief executive officer Mike Roman offered in the statement. “We determined that taking this decisive action now will allow 3M and Aearo Technologies to address these claims in a way that is more efficient and equitable than the current litigation.”

What’s Happened So Far?

The move comes less than three months after completing the gargantuan MDL’s first wave of 16 bellwether trials. The experience, while not a complete blowout, was nevertheless unpleasant for 3M, which was held liable 10 times by juries. Those juries awarded nearly $300 million in damages to plaintiffs whose hearing loss they determined was caused by defects in Aearo and 3M’s discontinued line of Combat Arms Earplugs Version 2 (“CAEv2”). The jury in the last of these bellwether trials awarded a single plaintiff $77.5 million, including $72.5 in punitive damages.     

The bankruptcy filing comes after a June 12th court order from presiding U.S. District Court Judge M. Casey Rodgers requiring the company and lead plaintiffs’ counsel to enter into mediation, citing the “staggering” resources it would take to adjudicate even continual waves of 500 additional bellwether trials. “An enormous amount of time and resources will be required to accomplish this endeavor, not just from this Court but from the entire federal judiciary,” Rodgers wrote in her order while putting the number of active plaintiffs in the MDL at more than 233,000.

In the face of potentially many, many billions of dollars of exposure to liability–and many, many years of court engagement through the MDL–“efficient and equitable” perhaps had a nice ring to it for 3M.

It remains unclear, however, just how much cover the bankruptcy filing will afford 3M as the parent company of Aearo, which designed the dual-ended combat earplugs used exclusively by the U.S. military between 2003 and 2015. Is 3M, which also reported quarterly revenue of $8.7 billion and adjusted earnings per share of $2.48 per share, unlawfully attempting to use Aearo as a shield here?  

According to reports, U.S. Bankruptcy Court Judge Jeffrey J. Graham has scheduled a hearing for August 15th to consider that question and whether further MDL claims should be blocked as a result of Aearo’s Chapter 11 filing.

In the meantime, the MDL docket is delayed, and Rodgers has openly questioned whether 3M’s efforts are being made in good faith.

Accelerating a Trend

The bankruptcy filing by 3M and Aearo follows similar efforts by opioid manufacturers and Johnson & Johnson to limit their own exposure to MDLs via Chapter 11 proceedings. Those filings have had the effect of complicating and therefore significantly slowing the resolution of settlement payouts by the involved companies.

Perhaps 3M studied how Johnson & Johnson had amassed $3.5 billion in damages and previous settlements in In Re Johnson & Johnson Talcum Powder Products Marketing, Sales Practices, And Products Liability Litigation before it filed for bankruptcy in October 2021. Perhaps it also studied the relative relief in pressure Johnson & Johnson has experienced since.

Given that no settlement has yet been reached at all yet in its own MDL, 3M chose to act now. Its statement takes care to acknowledge its coming realities, which in addition to potential settlements and growing litigation expenses include a decline in faith among investors and Wall Street analysts.

However, the statement repeats the defensive stance 3M has taken throughout the bellwether and mediation processes, namely that the CAEv2 earplugs were “effective and safe when used properly,” implying any fault lay with the military—and with military-veteran users.

“3M’s bankruptcy maneuver is further proof that they value their profits and stock price more than the well-being of veterans,” lamented plaintiffs’ lead co-counsel Bryan Aylstock to Bloomberg. “Instead of negotiating in good faith, 3M decided to move its relentless attack on US soldiers from the civil courts to the bankruptcy system.”     

A Final Thought

It remains to be seen how this situation plays out. Expect, though, that 3M’s early-stage bankruptcy is one that at this is point seems likely to become a staple of mass tort practice at its highest and most sophisticated end moving forward.

How mass tort professionals whose firms invest in these expensive, arduous cases adjust to this reality, and how they manage the expectations and sensitivities of their clients will be absolutely critical.


About the Author 

Christopher O’Connor, Esq., is a licensed attorney (N.Y.) and a longtime journalist. His areas of focus include mass tort practice, employment law, enterprise technology, mental and spiritual health, and e-discovery. O’Connor lives just outside of Houston, TX, and enjoys hiking, podcasting, and cooking for his wife. 

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