Report: Could Earplug Suits Cost 3M $100B? - Modern Distribution Management

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Report: Could Earplug Suits Cost 3M $100B?

An expert says lawsuits filed by veterans who blame hearing issues on defective earplugs could bankrupt the company, but 3M calls the interpretation ‘flawed speculation,’ according to Bloomberg.
An expert says lawsuits filed by veterans who blame hearing issues on defective earplugs could bankrupt the company, but 3M calls the interpretation ‘flawed speculation,’ according to Bloomberg.

3M — the well-known Minnesota-based maker of PPE supplies, Post-it notes and household adhesives — could see more than $100 billion in losses and even bankruptcy stemming from lawsuits filed by veterans who said the company’s defective earplugs contributed to their hearing damage, according to a report from business outlet Bloomberg.

In its reporting, Bloomberg cited a litigation consultant hired by lawyers suing 3M.

J.B. Heaton, the plaintiffs’ adviser, testified this week that “initial results from a handful of test cases shows 3M would be swamped by losses should the more than 230,000 lawsuits related to the company’s military earplugs business go forward,” according to the report.

A 3M spokesperson called the analysis “clearly flawed speculation,” and Bloomberg reported that 3M lawyers said previous cases where juries returned verdicts are “outliers and cannot be used to extrapolate results for the other cases.”

Even Heaton acknowledged during testimony that “the sample is small and that a judge may conclude $100 billion is not realistic,” Bloomberg reported.

3M is undergoing a reorganization, which has included putting its Aearo Technologies unit into bankruptcy in Indianapolis last month, according to the report.

Also last month, 3M announced plans to spin off its Health Care business, which had $8.6 billion in 2021 sales, or approximately 25% of 3M’s total revenue. It could take until the end of 2023 to complete, after which 3M will retain a 19.9% stake.

The spin-off news came seven months after 3M announced the $5.3 billion sale of its Food Safety business to Neogen, which the company said is expected to close on Sept. 1.

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