After attempting to escape its liability and responsibility to compensate United States servicemembers harmed by its sale of faulty earplugs to the U.S. military, 3M has been ordered into mediation as the litigation surrounding the matter moves forward.
Earlier this summer, 3M attempted to offload responsibility for the Combat Arms earplugs situation onto a subsidiary company called Aearo Technologies and then simultaneously declare that company bankrupt. 3M argued that since a subsidiary company was going to go through bankruptcy proceedings, the same protections given to Aearo should also be extended to 3M; chief among them being a hold on any outstanding litigation pending against the company.
Plaintiffs’ lawyers reacted to the move instantly, calling it a “sham” and a “contrivance” by 3M. Aearo had no accrued liabilities at the time of the bankruptcy declaration and was completely solvent by any financial measure.
Thankfully, bankruptcy Judge Jeffrey Graham also recognized these facts and has ruled that the bankruptcy of a subsidiary does not stop lawsuits from proceeding against the non-bankrupt parent company. As noted by lawyers for the plaintiffs after hearing the judge’s ruling, “Judge Graham’s decision is a complete rejection of 3M’s attempt to evade accountability and hide in bankruptcy.”
Now that the case has been cleared to proceed, the federal judge overseeing the litigation has ordered 3M and plaintiffs’ lawyers into mediation in an effort to bring the matter to an “efficient, equitable, and expeditious resolution;” notably pulling from Aearo’s own language as it argued for bankruptcy protection for 3M.
The move toward effective mediation could be beneficial to both sides as the case is now the largest multidistrict litigation in United States history. Over 220,000 individual lawsuits have been filed in the matter and Combat Arms earplugs lawsuits now account for over 30% of all cases currently pending in U.S. federal courts.