3M to Pay $6.01 Billion to Settle Lawsuits Over Damaged Hearing
3M, the multinational conglomerate, has agreed to pay a staggering $6.01 billion to settle lawsuits filed by US military veterans and service members who claimed their hearing was impaired due to the company’s earplugs. The settlement consists of $5 billion in cash and $1 billion in 3M stock, which will be paid in installments until 2029.
However, 3M maintains that their earplugs are safe and effective when used correctly, vehemently denying any liability. This recent settlement follows an unsuccessful attempt by 3M earlier this year to transfer the lawsuits into bankruptcy court.
An estimated 240,000 individuals are expected to be eligible for the settlement. However, 3M reserves the right to withdraw from the deal if less than 98 percent of eligible claimants decide to participate. This substantial settlement prompted a favorable response from investors, as shares of 3M rose by more than two percent upon the announcement.
The plaintiffs alleged that 3M concealed design flaws, manipulated test results, and failed to provide proper instructions for the use of the earplugs. These lawsuits were consolidated in federal court in Florida, culminating in the largest mass tort litigation in US history.
3M’s track record in court has not been favorable, with the company losing 10 out of 16 earplug cases that have gone to trial. The resulting awards from these lawsuits amounted to a total of $265 million. Complicating matters further, the manufacturer of the earplugs, Aearo Technologies, filed for bankruptcy in 2022.
3M has argued that the litigation was unfair, claiming that scientific evidence supporting the company was excluded from trials by the presiding judge. Nevertheless, this settlement wraps up all claims within Florida’s multidistrict litigation, coordinated state court action in Minnesota, and any potential future claims.
It is crucial to note that this settlement does not constitute an admission of liability on the part of 3M. Interestingly, this news comes just months after 3M announced a tentative $10.3 billion agreement with US public water systems to address allegations of water pollution.
As the chapter closes on this significant settlement for the affected veterans and service members, it will be interesting to see how this development impacts 3M’s reputation moving forward and any potential implications for their bottom line.
