3M agrees to $6 billion settlement in US military earplug lawsuit

3M has reached an agreement to pay $6.01 billion to settle a series of lawsuits filed by US military veterans and service members who claim to have experienced hearing loss due to the use of the company’s earplugs.

The settlement, which comprises $5 billion in cash and $1 billion in 3M stock, will be disbursed in installments over the course of a decade until 2029. The settlement marks a resolution to the largest mass tort litigation in US history, which had seen around 240,000 individuals eligible for compensation.

3M, headquartered in Minnesota, clarified that the settlement does not imply an admission of liability and maintains that its earplugs are safe and effective when used properly. The company’s shares witnessed a boost of over two percent following the announcement. This positive turn for 3M followed previous estimates by analysts, who had anticipated potential liability arising from the earplug litigation to be as high as $10 billion.

The litigation centered around Combat Arms earplugs produced by Aearo Technologies, a company acquired by 3M in 2008. These earplugs were used by the US military for training and combat purposes from 2003 to 2015, including deployments in Afghanistan and Iraq. Plaintiffs asserted that design flaws were concealed, test results were manipulated, and proper usage instructions were lacking, all of which allegedly contributed to hearing damage among the users.

The lawsuits were consolidated under the oversight of US District Judge M Casey Rodgers in federal court in Pensacola, Florida, back in 2019. These cases, at their peak, constituted around 30 percent of all federal court cases in the US. In the face of 16 earplug-related trials, 3M suffered defeat in 10 cases, leading to a total award of about $265 million to 13 plaintiffs.

3M countered that the mass tort litigation was unfair, claiming that scientific evidence favoring the company was excluded from trials and that a large number of unsubstantiated claims had inundated the court’s proceedings.

A bankruptcy judge ultimately dismissed 3M’s attempt to file for bankruptcy on behalf of Aearo, determining that the company’s financial state didn’t justify such action.

While announcing the settlement, 3M reiterated that the agreement encompasses all claims associated with Florida’s multidistrict litigation, coordinated state court actions in Minnesota, and any potential future claims. The company maintained that the settlement did not constitute an admission of wrongdoing and underscored its commitment to defending itself in litigation if the agreed terms of the settlement weren’t met.

This landmark settlement arrives only two months after 3M’s preliminary agreement to pay $10.3 billion to address claims of water pollution caused by per- and polyfluoroalkyl substances (PFAS) in US public water systems. While this settlement is still pending finalization, progress was made as 22 US states and territories withdrew their initial objections.