3M Co. said Monday the litigation settlement for selling potentially faulty earplugs to the military is on track to exceed the 98% participation threshold it agreed to by the final registration date of March 25.
The maker of Post-it Notes, Scotch tape, N95 masks and Command strips agreed last August to pay $6 billion to settle more than 300,000 lawsuits alleging that tens of thousands of people suffered from hearing loss and tinnitus after using the 3M earplugs. The case is the largest mass tort in U.S. history, exceeding even asbestos and opioid claims.
3M has opted to pay $1 billion of the total in cash, instead of stock, a choice it was allowed once it reached the 98% participation threshold.
“The strong support from more than 250,000 eligible claimants who have elected to participate in the settlement and release and dismiss their claims, coupled with ongoing dismissals of claims that do not meet participation or litigation requirements ordered by the MDL Court, are expected to resolve more than 99% of the claims in the litigation by the final registration date,” the company said in a statement.
Military veterans alleged that 3M and Aearo Technologies, a company it acquired in 2008, produced earplugs that failed to protect them from noise damage while serving. 3M has claimed the earplugs work correctly when used with the appropriate training.
The legal fight around the earplugs included four years of litigation and 16 trials. The plaintiffs alleged that 3M sold defective CAEv2 earplugs from 1999 to 2015 to the U.S. military.
Aearo filed for bankruptcy in 2022 as a separate company to allow it to negotiate a settlement, with 3M agreeing to cover the costs.
The settlement also marks another major payout by 3M in the past year after it agreed in June to pay up to $12.5 billion to settle litigation surrounding drinking water contamination from PFAS chemicals, also called forever chemicals.
Also read: 3M stock rallies after $10.3 billion ‘forever chemical’ settlement offered
The stock was flat premarket but has fallen 17% in the last 12 months, while the S&P 500
SPX,
has gained 20%.
The stock fell earlier in January after the company offered guidance for 2024 that was far below consensus estimates, overshadowing fourth-quarter earnings that were better than expected.
The company is planning to spin off its healthcare business in the first half.
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