A new $1 billion trust set up by Minnesota-based 3M could provide compensation for tens of thousands of service members and veterans who say the company’s defective earplugs caused permanent hearing damage and hearing loss

The company’s subsidiary, Aearo Technologies, which manufactured the Combat Arms Earplugs Version 2, is setting up the trust as a part of its chapter 11 bankruptcy proceedings. As part of the terms, Aearo Technologies relieves 3M of its liability, according to a statement the company released last week. 

The decision to file bankruptcy and set up the trust comes after 3M lost 10 out of 16 trials involving 19 service members. Juries found in favor of 13 plaintiffs and awarded about $265 million combined. 

“We have great respect for the brave men and women who protect us, and remain committed to the military as an active partner and valued customer going forward,” 3M chairman and CEO Mike Roman said in a statement dated July 26, 2022. “We determined that taking this decisive action now will allow 3M and Aearo Technologies to address these claims in a way that is more efficient and equitable than the current litigation.”

According to the company, the trust would help resolve the claims quicker than having all these cases go through the court system individually. 

Lawsuits: Defective Earplugs Caused Hearing Loss, Tinnitus 

As of July 15, 2022, 3M faces more than 290,400 Combat Arms Earplug lawsuits from across the country consolidated in multidistrict litigation in Florida federal court. Lawsuits say the Combat Arms Earplugs are defective and led plaintiffs to develop hearing loss and tinnitus. 

Combat Arms earplugs were designed with dual ends: An olive end to block out as much noise as possible and a yellow end that blocked some noise but allowed soldiers to hear verbal commands and the voices of fellow soldiers. 

To pass government requirements, the olive end had to have a noise reduction rating (NRR) of 25 to 40, and zero to 25 on the yellow end. Testing found the green end was 10.9 and the yellow end was -2 NRR, which meant the earplug amplified sound, according to a lawsuit filed by Anthony F. Ascanio. 

Whistleblower Lawsuit Claimed Fraud

In addition to defective product claims, plaintiffs said 3M committed fraud against the U.S. military by falsifying earplug test results, among other allegations. 

The fraud claims arose from a 2016 False Claims Act whistleblower lawsuit filed by Moldex-Metric Inc. The lawsuit claimed Aearo Technologies knew the Combat Arms earplugs were defective as early as 2000 but sold them to the military anyway. 

In July 2018, 3M agreed to pay $9.1 million to the U.S. Department of Justice to resolve allegations that it sold the earplugs to the military without disclosing the product’s defects. The settlement wasn’t an admission of liability.