3M Might Face Billion-Dollar Lawsuit Over Earplugs Manufactured For Military Use: WSJ

• 3M Co's (NYSE: MMM) foam earplugs, which the company manufactured for the United States military and was bought by the government for ~$7.63 a pair, threaten to become a significant liability for the manufacturing giant, reported Wall Street Journal.

• Many US military veterans have filed lawsuits against Minnesota-based 3M for hearing impairment caused by faults in the company's military-grade earplugs.

• The company might face billions of dollars in legal settlements or lawsuits after soldiers claimed they returned from combat with hearing damage caused by the earplugs.

• Next month, 3M will begin court-ordered negotiations with lawyers representing soldiers who wore the earplugs. According to analysts, the lawsuits are dragging on 3M shares and remind other manufacturers that liability risks may outweigh the benefits of producing protective products, writes WSJ.

• There are around 107,000 active cases and an additional 127,000 cases that could become active if filing fees are paid, and other steps are taken.

• According to Bryan Aylstock, the plaintiffs' court-appointed lead lawyer, troops have a hearing impairment and ringing in their ears, known as tinnitus, resulting from using the product. "This is a bad earplug," he commented. "Most juries consider the evidence and award significant damages." 

• 3M stated that the earplugs work when soldiers are properly trained and wear them as intended. The company also claimed to have legal protection known as a government contractor defense, which states that a supplier cannot be held accountable for producing a product requested by the government.

• Price Action: MMM shares are trading higher by 0.50% at $135 during the premarket session on Monday.

• Photo by Tony Webster via Flickr

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