U.S. judge penalizes 3M, bars it from shifting liability in earplug litigation

© Reuters. FILE PHOTO: The 3M logo is seen at its global headquarters in Maplewood, Minnesota, U.S. on March 4, 2020. REUTERS/Nicholas Pfosi

By Nate Raymond

(Reuters) - A U.S. judge on Thursday barred 3M Co from trying to avoid liability for injuries current and former U.S. military members sustained from its allegedly defective earplugs by shifting blame to a subsidiary.

U.S. District Judge M. Casey Rodgers, the Pensacola, Florida-based judge tasked with overseeing nearly 250,000 cases over the combat earplugs, said 3M deserved the "harshest penalty" for its "bad faith" attempts to transfer the liability to a bankrupt unit.

That unit, Aearo Technologies, had developed the Combat Arms Earplugs Version 2 (CAEv2) earplugs for the U.S. military before 3M acquired it in 2008. After Aearo filed for bankruptcy protection in Indiana in July, 3M sought to pause the cases against it.

But a bankruptcy judge in August declined to put the litigation against 3M on hold. Rodgers said the bankruptcy judge's decision, which 3M is appealing, "should have ended the sophistry" and 3M's attempt to avoid liability.

Instead, she said, 3M attempted nearly four years into the litigation to "rewrite the history of the CAEv2" by asserting for the first time, it is not independently responsible, as Aearo's purchaser, for any injuries.

3M has lost 10 of the 16 earplug cases that have gone to trial so far, with about $265 million being awarded in total to 13 plaintiffs.

Rodgers said 3M was "masquerading as the hapless wrong party defendant and purposefully ambushing the other side with a wholly contrived strategic position," and she barred it from "shifting blame to the Aearo defendants".

3M in a statement said it would appeal, calling Rodgers' ruling an "incomplete and inaccurate depiction of our good faith efforts in this litigation."

The lead lawyers for the plaintiffs, Bryan Aylstock and Chris Seeger, in a joint statement welcomed the ruling, saying 3M had consistently represented itself as the sole defendant liable for any injuries caused by the earplugs.

"We applaud Judge Rodger's order, which shuts the door on 3M's duplicitous, bad faith attempt to shift blame to Aearo defendants in service of its contrived bankruptcy maneuver," they said.

In a separate ruling, Rodgers on jurisdictional grounds dismissed a lawsuit by two veterans seeking to block 3M's planned spinoff of its healthcare business, which they called an illegal attempt to avoid compensating veterans.