3M to pay $6 billion in earplugs settlement

3M has agreed to pay out $6 billion to settle hundreds of thousands of claims that earplugs it manufactured damaged veterans’ hearing, multiple news outlets reported on Tuesday. The settlement would resolve one of the largest tort claims in US history and could award money to more than 240,000 plaintiffs.

3M has denied liability in the settlement. In a statement, it asserted that its earplugs “are safe and effective when used properly.”

The earplugs, called Combat Arms, were purchased by the US military from 2003 through 2015, including during the Iraq and Afghanistan conflicts. Lawyers for the plaintiffs argue that the earplugs can loosen in the ear, failing to offer proper protection and leading to hearing loss and tinnitus, a continual ringing in the ears.

3M, a global conglomerate that manufactures everything from sealants to stethoscopes to Post-it notes, has faced legal battles over the earplugs for years. In 2016 a competitor, Moldex-Metric, sued on behalf of the US government, claiming that 3M failed to disclose defects in the earplugs. 3M settled the lawsuit in 2018 for $9.2 million, without accepting liability.

Earplugs only comprise a tiny portion of 3M’s business, the Wall Street Journal reported. The government paid around $32 million for the earplugs over ~12 years. 3M earned revenues of $34.2 billion in 2022.

The $6 billion settlement comes just two months after 3M agreed to pay out $10.4 billion over 13 years to settle claims that it allowed perfluoroalkyl and polyfluoroalkyl substances, or PFAS, to penetrate the water supply. PFAS, known as “forever chemicals,” have been alleged to contribute to cancer, birth defects, and lowered fertility. 3M denied liability in that settlement as well.

“3M negotiated a pretty good deal for itself” on the earplugs settlement, University of Richmond law professor Carl Tobias told Bloomberg. Analysts had predicted it would cost the company from $8 billion to $15 billion.

Under the terms of the settlement, 3M will pay out $6 billion over the next several years. $1 billion of the payment will be in the form of stock, and $5 billion in cash. 3M’s stock rose 5.2% on Monday, after news of the settlement began to emerge. Earlier this year, the company said it would begin subtracting legal expenses from its adjusted profits per share.

There’s still a chance the settlement will fall through. 98% of plaintiffs need to accept the terms for it to be finalized. But the average plaintiff will only see $12,500, Tobias told the Washington Post, which some may not be willing to accept.