Saying 3M engaged in “bad faith manipulation,” a federal judge overruled the company’s efforts to shift liability for a flurry of military earplug lawsuits to a bankrupt subsidiary.
U.S. District Judge Casey Rodgers’ decision in Pensacola came after 3M suddenly asserted this fall that it was not solely responsible for hearing damage suffered by military veterans who used 3M earplugs.
“3M’s behavior in bad faith has been and continues to be grossly and unfairly prejudicial to plaintiffs,” she wrote Thursday.
The Maplewood-based industrial giant is facing more than 200,000 claims in a Florida court – all wrapped up in the largest multi-district litigation (MDL) in US history – presided over by Rodgers. Plaintiffs claim 3M earplugs were knowingly defective; the company says they were safe.
“3M has deliberately embarked on a nearly four-year campaign to establish itself as the sole responsible party for [earplug] pretensions, then abruptly reversed course when that narrative no longer suited its strategic purposes,” Rodgers wrote.
Plaintiffs’ attorneys applauded Rodgers’ decision.
“3M’s legal abuses have delayed justice for too long for the hundreds of thousands of veterans who suffer hearing damage as a result of its conduct,” plaintiffs’ attorneys Bryan Aylstock and Chris Seeger said in a statement.
3M rejected Rodgers’ characterization of corporate conduct and said it would appeal its decision.
“We disagree with this incomplete and inaccurate description of our good faith efforts in this litigation,” the company said in a statement.
The majority of the 16 bellwether earplug trials, which ended in May, were won by the plaintiffs. They received jury prizes totaling nearly $300,000 million. In July, 3M – saying MDL’s legal proceedings were “irreparable” – placed its subsidiary Aearo Technologies under Chapter 11 bankruptcy protection.
3M bought Aearo in 2008 and two years later incorporated the subsidiary’s earplug business into the larger company. Aearo had developed an earplug, the Combat Arms CAEv2, which was standard issue for the US military for many years.
Chapter 11 allows struggling companies to reorganize their finances while being shielded from creditor claims — and, more importantly in Aearo’s case, pending litigation. Aearo Technologies is named as a defendant in the flood of earplug cases with 3M.
Aearo tried to persuade a judge in the US bankruptcy court in Indianapolis to extend the litigation freeze to 3M itself. This would have allowed 3M to resolve the earplug cases through bankruptcy court, which would likely be much less expensive than through jury trials in federal court.
The earplug plaintiffs called the bankruptcy case a “sham”. Judge Jeffrey Graham ruled against Aearo, leaving 3M still struggling with the earplug lawsuit in Rodgers’ court.
3M appealed Graham’s decision. He also returned to the Rodgers court to shift liability to Aearo. “The bankruptcy court’s decision should have ended the fallacy, short of reversing it on appeal,” Rodgers wrote in Thursday’s order. “He does not have.”
“Instead, after losing its bid to piggyback on Aearo’s bankruptcy protection,” she continued, “(3M) returned to MDL and sought to rewrite CAEv2 history. , his relationship with Aearo and the litigation by asserting for the first time that he has no independent liability or successor for alleged injuries related to CAEv2.”
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