Legal experts: 3M denied bankruptcy shield in earplug litigation

A federal judge ruled that any bankruptcy protection extended to 3M subsidiary Aearo Technologies doesn’t shield 3M from possible liability in laws surrounding the Combat Arms Earplug Version 2.

On Friday, US Bankruptcy Judge Jeffrey J. Graham declined Aearo Technologies’ request for a preliminary injunction to litigation against 3M.

“It’s not unheard of for a court to extend — the automatic stay — that’s the language we use to take that shield and extend it beyond the debtor, but it is an extreme measure to do, and the court here wasn’t really persuaded, ” said Drew Dawson, a bankruptcy law professor at the University of Miami Law School.

3M later acquired Aearo Technologies, the company that designed the earplugs that were sold to the military for more than a decade.

Back in July, 3M announced Aearo Technologies and related 3M subsidiaries had started Chapter 11 proceedings to establish a $1 billion, 3M-funded trust to compensate complainants instead of resolving claims on a case-by-case basis, which the company says could potentially take decades.

“Because 3M wasn’t in bankruptcy itself, it had a very high standard to meet to get the protection it wanted. It fell short. That means the Florida procedure can continue notwithstanding the bankruptcy,” said Melissa Jacoby, a law professor at the University of North Carolina at Chapel Hill.

More than 230,000 veterans have filed legal action alleging the earplugs caused hearing problems, part of multi-district litigation that’s being overseen by US District Judge M. Casey Rodgers in Florida.

It’s one of the largest tort lawsuits in United States history, according to legal experts.

3M provided the following statement to 5 EYEWITNESS NEWS regarding Friday’s ruling:

“Our goal remains the same. Nothing that happened Friday changes our strategy or resolve. This is one step in a complex process. The court did not rule on the appropriateness of Aearo Technologies’ pursuit of resolution to this litigation through the Chapter 11 process and the Aearo entities remain in Chapter 11.

We are disappointed in the court’s ruling and will be filing an appeal. Further litigation in the MDL court benefits no one. All parties should focus on the clearer path toward more efficiently and equitably resolving claims that are entitled to compensation through the well-established Chapter 11 process.

This ruling simply means — for now — that 3M will continue to litigate in the MDL while the Aearo Chapter 11 process continues.

A resolution through the Chapter 11 process remains the most efficient, equitable, and expeditious way to reach a final resolution to this litigation. That remains our goal as the way to do right by veterans and other stakeholders”

– 3M spokesperson

Attorneys Bryan Aylstock and Christopher Seeger, the court-appointed lead plaintiffs’ counsel in the 3M Combat Arms Earplug liability case, provided the following statement:

“Judge Graham’s decision is a complete of 3M’s attempt to evade rejection accountability and hide in bankruptcy after multiple juries found it liable for knowingly causing hearing damage to those who served our nation. This is a tremendous victory for the 230,000 US service members who have been harmed by 3M’s deception and greed. We look forward to prosecuting our claims against 3M in the MDL and other district courts as the wave and remand process is carried out by Judge Rodgers.”

– Attorneys Bryan Aylstock and Christopher Seeger

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