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3M Bankruptcy Plan Fails as Earplug Lawsuits Move Forward

Riddle Brantley LLP   |  September 1, 2022   |  

Bankruptcy Ruling Against 3M is a Victory for Injured Veterans

A federal judge rejected 3M's attempt to use subsidiary bankruptcy filings to avoid liability in earplug lawsuits.A federal judge ruled on Friday, August 26 that 3M cannot use a subsidiary’s bankruptcy maneuver to avoid or minimize liability in 3M earplug lawsuits. The ruling against 3M, which took many legal observers by surprise, effectively means that potentially thousands of claims against 3M can move forward.

Plaintiffs and their attorneys celebrated the ruling while 3M stocks sank at least 12 percent.

In his ruling, U.S. Bankruptcy Judge Jeffrey Graham of Indianapolis put companies on notice that bankruptcy proceedings may not provide the legal “shield” they’ve come to rely on. Many companies beyond 3M, including Johnson & Johnson in talcum powder litigation, have used complicated bankruptcy maneuvers by subsidiaries to avoid or minimize liability and financial losses associated with settlements. Professor Lindsey Simon of the University of Georgia School of Law said that the ruling should serve as “an important wake-up call.”

This is not the last word on the complicated matter, however. 3M has already filed an appeal, and it seems likely that the case will proceed to the 7th U.S. Circuit Court of Appeals, bypassing federal district court.

“We are pleased with this ruling and remain committed to seeking justice for victims of hearing loss potentially caused by 3M military earplugs.”

Gene Riddle, 3M earplugs lawsuit attorney

IMPORTANT: If you’ve suffered from hearing loss or tinnitus potentially due to defective 3M Combat Arms earplugs while serving in active combat between 2003 and 2015, you may be entitled to compensation in a 3M earplugs lawsuit. Our firm is actively representing clients in these claims. Please call 1-800-525-7111 for a FREE, no-obligation consultation. While we are still sorting through the implications of this recent bankruptcy ruling, we would love to talk with you and see how we can help.

What Was 3M Trying to Do?

3M had hoped that the bankruptcy filings by several subsidiaries, including Aearo Technologies, would cut off any additional claims. Under 3M’s plan, existing earplug claims would be resolved through the bankruptcy proceedings, limiting 3M’s exposure and saving the company potentially billions of dollars in verdict and settlement costs.

What Does the 3M Bankruptcy Ruling Mean for Victims?

The ruling against 3M’s motion effectively means that 3M cannot use bankruptcy proceedings to stop additional claims against its allegedly defective earplugs. The ruling does not prevent 3M from negotiating a “global settlement” covering claims in the largest-ever multi-district litigation (MDL) in U.S. history. In the meantime, however, it seems likely that claims and trials alike will move forward. 3M has already suffered several multi-million dollar judgments against it in early “bellwether” trials — including a recent $55 million verdict later reduced to $21 million.

To be clear, the final outcome of 3M earplug claims remains uncertain, especially as 3M pursues an appeal of the recent bankruptcy ruling. If you or a loved one suffered from hearing loss or tinnitus after using 3M Combat Arms earplugs in active combat between 2003 and 2015, you may have a claim for compensation. Please call 1-800-525-7111 and let’s review your claim.

Justice Counts for our military veterans and their loved ones and we are ready to help however we can.