A federal bankruptcy judge has ruled 3M must face over 230,000 Combat Arms military Earplugs Version 2 (CAEv2) lawsuits. This ruling comes despite the bankruptcy of 3M’s subunit that formerly made the allegedly defective earplugs that were sold to the U.S. military according to Reuters.
Bankruptcy Judge Jeffrey J. Graham ruled on August 26 that the Chapter 11 bankruptcy restructuring for Aearo Technologies could proceed while litigation against the parent company continues.
Judge Graham’s ruling is unusual in that litigation is usually stayed against parent companies pursuing restructuring, even if the Chapter 11 plans are for a subunit. Aearo Technologies has argued that its parent company, 3M, should have bankruptcy protections so that it could devise a timeline and plan to restructure.
In his opposing ruling, Graham stated that the bankruptcy restructuring for Aearo created no legal need to protect 3M.
Lawyers for military veterans make the claim that their clients’ hearing was damaged due to flawed protective capabilities of the CAEv2 device – the only hearing protection device available to military personnel between the years 2003 and 2012.
"Judge Graham's decision is a complete rejection of 3M's attempt to evade accountability and hide in bankruptcy," plaintiff attorneys said in a statement to Reuters.
According to Fortune.com, the next 3M CAEv2 trial is scheduled for Oct. 24. Out of 16 completed bellwether trials, juries have found 3M liable in 10 trials, and have awarded 13 plaintiffs $300 million in damages.
Aearo Technologies filed for bankruptcy on July 26 in order to resolve nearly 300,000 hearing loss or damage claims, filed mostly by veterans of the Iraq and Afghanistan wars.
3M, which denies liability for soldiers’ hearing damage claims, has set aside $1 billion in a trust to resolve CAEv2 claims. But RBC Capital Markets analyst Deane Dray told Fortune that sum is inadequate. Dray estimated that to resolve CAEv2 litigation, 3M would have to offer a settlement upwards of $10 billion.