3M contemplates $5.5B settlement for earplug lawsuits alleging hearing damage

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3M’s board of directors is expected to vote soon on whether to settle nearly 260,000 lawsuits by U.S. military service members and veterans who say they suffered hearing damage from using the company’s earplugs, a person familiar with the proposal said on Monday.

The proposed deal comes after a failed attempt by 3M earlier this year to move the lawsuits, which had grown into the largest mass tort litigation in U.S. history, into bankruptcy court in the hope of limiting its liability.

3M shares were up more than 4% on Monday morning following reports by Bloomberg and the Wall Street Journal that the company had reached a tentative $5.5 billion settlement in the litigation.

A 3M spokesperson declined to comment. The company has denied that its earplugs were defective.

The Combat Arms earplugs were made by Aearo Technologies, a company 3M acquired in 2008. They were used by the U.S. military in training and combat from 2003 to 2015, including in Afghanistan and Iraq.

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The 3M logo is seen at its global headquarters in Maplewood, Minnesota, on March 4, 2020.  (REUTERS/Nicholas Pfosi/File Photo)

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Plaintiffs in the lawsuits claim that the company hid design flaws, fudged test results and failed to provide instructions for the proper use of the earplugs, leading to hearing damage. The lawsuits were consolidated before U.S. District Judge M. Casey Rodgers in Pensacola, Florida federal court in 2019.

Of 16 earplug cases that have gone to trial, 3M has lost 10, with about $265 million being awarded in total to 13 plaintiffs.

Aearo filed for bankruptcy in July 2022, with 3M pledging $1 billion to fund its liabilities stemming from the earplug lawsuits. 3M argued that the mass tort litigation was unfair because Rodgers had kept scientific evidence favorable to the company out of trials and allowed thousands of “unvetted” claims to swell the court’s docket.

However, a bankruptcy judge in June dismissed the bankruptcy, finding that Aearo was not in enough financial distress to justify it.