INDIANAPOLIS (Legal Newsline) – A bankruptcy judge shot down 3M’s attempt to halt litigation over its Combat Arms military earplugs, saying a generous funding agreement between 3M and its bankrupt Aearo unit eliminated any risk creditors – including some 290,000 earplug claimants – would suffer from an unfair distribution of assets if the lawsuits proceed.

The decision by U.S. Bankruptcy Judge Jeffrey J. Graham in Indiana represents a severe setback for 3M, which placed Aearo in bankruptcy in July to try to force a global settlement of the earplug claims. The strategy has been successful for other mass-tort defendants, including Johnson & Johnson, which put its talc business in Chapter 11 to resolve asbestos claims; and the Sackler family, which won a halt to opioid lawsuits against them personally in exchange for providing billions of dollars to fund the reorganization of Purdue Pharma. 

No such luck for 3M, however. Judge Graham took a close look at the funding agreement between the Minnesota company and its Aearo unit and decided 3M’s open-ended financial commitment to Aearo meant there was no reason to stay the earplug lawsuits in order to preserve Aearo’s assets.