A federal bankruptcy judge has rejected a bid by 3M for protection from more than 230,000 lawsuits over defective earplugs used by military personnel for more than a decade.
The decision announced Friday by Judge Jeffrey Graham of the U.S. Bankruptcy Court in Indianapolis dealt a setback to the conglomerate’s efforts to resolve the cases. 3M vowed to appeal.
3M last month filed for chapter 11 bankruptcy protection for its Aearo Technologies subsidiary, the maker of Combat Arms earplugs. Chapter 11 allows companies to freeze and resolve lawsuits against them, and 3M had hoped to follow other large companies that used the proceedings to address costly pending litigation.
The strategy, however, required a bankruptcy court to extend those protections to the subsidiary’s parent company. The judge, according to the Wall Street Journal, instead determined that the evidence did not show that Aearo would be impacted by lawsuits against its parent.
3M said in a statement that it disagreed with the ruling and that it intends to appeal. Aearo, meanwhile, would continue in its chapter 11 proceedings, which officials said would “offer a more efficient, equitable and expeditious pathway to resolution of these matters for all parties.” The company said it would continue to defend itself in the pending lawsuits and anticipates spinning off its food safety business later this week.
The lawsuits are reportedly costing the company about $3.8 million per week, and they could ultimately force the 3M to pay out billions to veterans with hearing loss or ringing in the ears.
The lead attorney for those plaintiffs said Graham’s ruling represented a “complete rejection of 3M’s attempt to evade accountability and hide in bankruptcy.”