3M Commits $1 Billion For Military Members Who Claim Earplugs Were Faulty

Topline

Facing mounting legal trouble, manufacturing giant 3M unveiled plans Tuesday to commit $1 billion to a trust to resolve roughly 235,000 lawsuits from United States service members who allege their earplugs failed to protect their hearing, and have the subsidiary that made them file for bankruptcy.

Key Facts

3M, the Minnesota Mining and Manufacturing Company, has faced a three-year legal battle over the effectiveness of their military earplug—with 115,000 filed claims and 120,000 more on an administrative docket—from service members who allege the earplugs are defective and contributed to hearing loss.

3M argued in a statement it believed their combat arms earplugs in question, a previous model used between 2003 and 2015 for soldiers deployed in Iraq and Afghanistan, were “effective and safe” when properly used.

The company also committed $240 million to cover expenses related to the cases, which they argue could take “years, if not decades,” to litigate.

The announcement comes hours after 3M announced plans to separate its healthcare business, which made $8.6 billion last year off the sale of respirators and N-95 masks, into a listed company, apart from its production of household staples like tape, glue and Post-it brand sticky notes.

Company shares climbed 5.51% today, to $141.55, although they have been on the decline for over a year, from $201.67 last July.

Key Background

Of the 16 trials the company has faced over the past three years, 3M has lost 10, and payed $265 million in combined awards to 13 plaintiffs, while winning the other six. Four years ago, 3M agreed to a $9.1 million payment to the federal Department of Justice to resolve the allegations without admitting liability, although more suits have flooded in since then, from soldiers who claim the earplugs cause hearing loss and tinnitus (ringing in the ear).

Further Reading

How The Pandemic Changed 3M’s Approach To Innovation (Forbes)

3M to spin off healthcare business, earplugs unit seeks bankruptcy protection (Reuters)

Source: https://www.forbes.com/sites/brianbushard/2022/07/26/3m-commits-1-billion-for-military-members-who-claim-earplugs-were-faulty/