3M Creates $1B Trust To Settle Veterans' Suits Over Earplugs

3M Creates $1B Trust To Settle Veterans' Suits Over Earplugs

Introduction

3M is creating a $1 billion trust to resolve claims brought by tens of thousands of American service men and veterans over earplugs they claimed were defective and caused severe hearing loss.

The company maintained that its dual-ended Combat Arms earplugs were efficient and secure when used as directed while announcing on Tuesday that it was taking serious action. Aearo Technologies, the division that produced the earplugs, would declare bankruptcy, according to the notice from 3M.

There have been over 235,000 claims made against 3M regarding the earplugs, and 16 lawsuits have gone to trial since 2019, with 3M winning six and losing ten. Since 3M has challenged those decisions, the plaintiffs in those instances have not collected their roughly $300 million combined reward.

The earplugs in question were Combat Arms Earplugs, Version 2, manufactured by 3M and distributed to soldiers between 2003 and 2015. They had two ends, one that completely muffled sound and the other that protected wearers from loud noises like gunshots or explosions while allowing them to hear a conversation and other, gentler noises.

According to the lawsuits, many users found the earplugs to be excessively short, and a fault in the design caused them to slip into the user's ear almost imperceptibly, letting harmful sounds through.

The Justice Department filed charges against 3M in 2018, alleging that the company provided the defense department with earplugs that were purposefully too short to accommodate all service personnel while concealing this knowledge from the military services.

Despite paying $9.1 million to resolve the dispute, 3M made no admissions of guilt. The new trust will offer expedited compensation to claimants in a way that is more effective and equitable for all parties, according to a news statement published by 3M on Tuesday.

According to 3M Chairman and CEO's statement, the company will continue to be devoted to the military as active partners and beloved customers in the future because it has a great deal of respect for the courageous men and women who guard the country.

However, lawyers who have defended the plaintiffs claim that the trust and associated bankruptcy may actually impede resolution and reduce payment amounts. The Maryland-based legal firm described the $1 billion as an insultingly little sum that would only provide each plaintiff $5,000.  

According to the law firm representing the hundreds of soldiers and veterans who have filed claims, 3M is presently under a lot of pressure due to the potential for hundreds of trials in the next year. That pressure will be immediately released by the bankruptcy stay, giving 3M additional negotiating power.

The company's CEO defended the earplugs in a press statement and on a conference call with investors on Tuesday by saying that they offer reliable hearing protection when worn appropriately. The CEO even stated that Aearo's choice to file for bankruptcy and the creation of the trust show that 3M is acting to settle disputes.