Saying 3M has engaged in “bad faith manipulation,” a federal judge quashed the company’s effort to shift responsibility for an avalanche of military earplug lawsuits to a bankrupt subsidiary.
The sharply worded ruling from U.S. District Judge Casey Rodgers in Pensacola came after 3M suddenly claimed this fall it was not solely liable for hearing damage suffered by military veterans who used 3M earplugs.
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“3M’s bad faith conduct has been, and continues to be, highly and unfairly prejudicial to plaintiffs,” she wrote on Thursday.
The Maplewood-based industrial giant faces over 200,000 claims in a Florida court — all wrapped into the largest multi-district litigation (MDL) in U.S. history — presided over by Rodgers. Plaintiffs say 3M’s earplugs were knowingly defective; the company says they were safe.
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“3M purposely engaged in a nearly four-year campaign to establish itself as the sole responsible party for [earplug] claims, then abruptly reversed course when that narrative no longer suited its strategic objectives,” Rodgers wrote.
Plaintiffs’ attorneys applauded Rodgers’ ruling.
“3M’s litigation abuses have delayed justice for far too long to the hundreds of thousands of veterans suffering from hearing damage due to its conduct,” lead plaintiffs’ attorneys Bryan Aylstock and Chris Seeger said in a statement.
3M rejected Rodgers’ characterization of the company’s conduct and said it would appeal her ruling.
“We disagree with this incomplete and inaccurate depiction of our good faith efforts in this litigation,” the company said in a statement.
The majority of 16 bellwether earplug trials, which ended in May, were won by plaintiffs. They received jury awards totaling nearly $300,000 million. In July, 3M — saying the MDL legal process was “broken beyond repair” — put its Aearo Technologies subsidiary in Chapter 11 bankruptcy protection.
3M bought Aearo in 2008, and two years later folded the subsidiary’s earplug business into the bigger company. Aearo had developed an earplug, the Combat Arms CAEv2, that was standard issue for the U.S. military for many years.
Chapter 11 allows troubled companies to reorganize their finances while shielded from creditors’ claims — and, most important in Aearo’s case, from ongoing litigation. Aearo Technologies is named as a defendant in the flood of earplug cases along with 3M.
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Aearo tried to persuade a U.S. Bankruptcy Court judge in Indianapolis to extend the litigation freeze to 3M itself. That would have allowed 3M to resolve the earplug cases through bankruptcy court, which likely would be far less costly than through jury trials in federal court.
Earplug plaintiffs called the bankruptcy case a “sham.” Judge Jeffrey Graham ruled against Aearo, leaving 3M still dealing with the earplug lawsuits in Rodgers’ court.
3M appealed Graham’s decision. It also went back to Rodgers’ court to shift liability to Aearo. “The bankruptcy court’s decision should have ended the sophistry, barring its reversal on appeal,” Rodgers wrote in Thursday’s order. “It did not.”
“Instead, after losing its attempt to piggyback onto Aearo’s bankruptcy protection,” she continued, “(3M) returned to the MDL and sought to rewrite the history of the CAEv2, its relationship with Aearo, and the litigation by asserting for the first time that it has neither independent nor successor liability for any alleged CAEv2-related injuries.”
