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3M Appeals Bankruptcy Court Refusal to Halt 230,000 Earplug Suits (1)

Aug. 29, 2022, 4:55 PM

3M Co. filed a notice to appeal a bankruptcy court’s recent ruling denying the manufacturer’s bid to block more than 230,000 lawsuits alleging that its earplugs harmed US soldiers.

The Monday notice comes after US Bankruptcy Judge Jeffrey J. Graham Friday refused to halt the lawsuits, which accuse 3M and its bankrupt subsidiary, Aearo Technologies, of selling faulty combat earplugs.

Bankruptcy courts sometimes grant requests to pause lawsuits against non-bankrupt companies with connections to a Chapter 11 debtor, as 3M had done in Aearo’s case. Graham’s decision Friday to allow the suits against 3M to continue put into question the company’s decision to try to resolve the mass tort litigation by putting Aearo in bankruptcy.

In July, 3M placed its Aearo subsidiary into bankruptcy in the US Bankruptcy Court for the Southern District of Indiana. The filing came after what the company said is three years and $350 million in legal fees spent in multidistrict litigation over allegedly faulty earplugs used by the US military. More than 230,000 plaintiffs, most of whom were service members, have claimed the earplugs caused hearing damage.

Aearo has said it wants to continue to use the Chapter 11 process to reach a settlement that would end all of the lawsuits and related tort claims against the unit and 3M.

3M has said it would fund a $1 billion settlement trust to compensate people suing over the earplugs—a majority of the tort claims. The strategy is similar to those used by other companies facing extensive personal injury liabilities, including Johnson & Johnson and Purdue Pharma LP.

The case is Aearo Technologies LLC, Bankr. S.D. Ind., No. 22-02890, notice 8/29/22.

To contact the reporter on this story: James Nani in New York at jnani@bloombergindustry.com

To contact the editors responsible for this story: Maria Chutchian at mchutchian@bloombergindustry.com; Roger Yu at ryu@bloomberglaw.com