3M still faces more than 250,000 military earplug lawsuits after a federal judge dismissed the company’s bankruptcy of its subunit, Aearo Technologies, that manufactured the allegedly faulty hearing-protection devices that plaintiffs claim caused their hearing loss or damage.
U.S. Bankruptcy Judge Jeffrey Graham ruled on June 9 that Aearo Technologies, which 3M acquired in 2008 for $1.2 billion, is a well-supported subsidiary with “a greater degree of financial security than warrants bankruptcy protection,” Reuters reported. In response to Judge Graham’s decision, Aearo Technologies filed a notice of appeal June 12, Bloomberg Law reported.
The earplugs at the center of the lawsuits, Combat Arms Military Earplugs version 2 (CAEv2), have led to the largest mass tort in U.S. history, representing nearly one-third of all cases currently pending in U.S. federal district courts. Plaintiffs in the litigation, mostly U.S. military veterans, allege that CAEv2 failed to protect their hearing during training exercises or during active duty in the Iraq and Afghanistan wars.
The federal judge who presided over the consolidation of CAEv2 claims in multidistrict litigation (MDL), Judge Casey Rodgers, ordered dozens of CAEv2 lawsuits remanded to district courts in anticipation that Aearo’s bankruptcy would be ruled against. In Dec. 2022, Rodgers barred 3M from escaping litigation through bankruptcy.
Considering the enormous scope of the litigation, 3M’s position has been that the only way to resolve it is through bankruptcy. However, Judge Graham ruled that bankruptcy was not the only avenue for resolving the litigation. Graham also said that 3M, a Fortune 500 company, was not at any risk of becoming insolvent.
Graham called Aearo’s bankruptcy plan a "fatally premature" response because neither 3M nor its subunit faced serious harm, despite the number of claims.
In response to Graham’s ruling, 3M said that its subunit is considering filing an appeal. Plaintiffs' attorneys, meanwhile, characterized the bankruptcy of Aearo Technologies, as a “gross misuse of the bankruptcy courts."