3M fights a growing legal battle over combat-grade earplugs

Former progressive work U.S. service infantry serviceman Nathan Frei says from 2011 to 2015 helium went done immoderate of the astir aggravated grooming that the U.S. Army had to offer. With it, came large noises — everything from weapons to helicopters to explosions.

To support his hearing, Frei wore modular contented earplugs made by 3M.

Today, he's 1 of much than 200,000 subject work members and veterans suing the conglomerate. 3M stock, which deed a caller 52-week debased Wednesday, is 1 of the worst-performing concern stocks this year, down much than 16% successful 2023, versus the XLI Industrials ETF, which is down 1.5% twelvemonth to date.

Plaintiffs assertion 3M earplugs were "defective" and failed to support against proceeding nonaccomplishment and tinnitus.

"We utilized [the earplugs] each clip that we were astir large noises," Frei, who lives successful Seattle, told CNBC. "And I relied connected that proceeding extortion during that time."

From 2003 to 2015, Aearo Technologies and its genitor company, 3M, manufactured and supplied the U.S. subject with the Combat Arms CAEv2 earplugs. The plugs were modular contented for soldiers successful Afghanistan and Iraq and were designed to support work members' proceeding successful subject grooming and during combat.

Each earplug had 2 ends: The greenish extremity was designed to artifact retired each sound. The yellowish end, signaling "whisper mode," purported to artifact retired large dependable — but allowed the idiosyncratic to perceive quieter noises, similar conversations.

"We were told that by wearing 'whisper mode' that we could inactive support our hearing," said Frei, who claims helium archetypal noticed issues with his proceeding successful 2013.

"I was proceeding ringing," Frei recalled. "At first, I thought it was a TV that was on. And truthful I searched and scoured the location looking for wherever the sound was coming from earlier I realized that it was conscionable successful my head."

As the years passed, the 35-year-old said, his proceeding issues got worse. Department of Veterans Affairs records shared by Frei with CNBC amusement helium was aboriginal diagnosed with tinnitus.

"It's constant," helium said. "It's a large ringing successful my ears — precise akin to conscionable similar a buzz noise."

He said the ringing is truthful disruptive it occasionally keeps him awake.

"I don't look similar idiosyncratic who astir apt should person arsenic overmuch proceeding nonaccomplishment arsenic I bash astatine my age," helium said.

"The intent of the instauration of [the Combat Arms earplugs] was to collaborate with the subject to lick 1 of the longest-standing problems they person had, that soldiers won't deterioration their proceeding extortion astir large noises and successful combat," Rucker said.

Rucker said the plugs were designed successful collaboration with the U.S. subject and tested by the Air Force, Army, National Institute for Occupational Safety and Health, and others.

"All of that investigating shows the Combat Arms earplugs, erstwhile decently fitted and erstwhile utilized according to its instructions, enactment to support people's hearing," helium said.

Rucker conceded that subject audiologists were "well trained successful however to bid radical and acceptable radical for the usage of earplugs," but maintained, "it should person worked and protected their proceeding successful environments wherever it was due to beryllium utilizing these earplugs."

After a whistleblower suit was filed successful 2016, accusing 3M of selling "dangerously defective" earplugs, the company agreed to wage $9.1 cardinal to the Department of Justice to resoluteness the allegations without admitting liability.

Soon after, determination was a flood of caller suits from hundreds of thousands of different work members.

Today, the lawsuits person been consolidated successful Florida national court, creating what immoderate are calling the largest wide tort successful U.S. history, surpassing adjacent the multidistrict litigation involving Johnson & Johnson's talc products.

3M has mislaid 10 of the 16 cases that person gone to proceedings truthful far, with a full of $265 cardinal awarded to 13 plaintiffs to date.

"There person been respective bellwether trials. And unfortunately, Aearo and 3M person not been capable to contiguous each of the grounds related to the archetypal plan of the product, the military's engagement successful the plan of the product, each of the issues concerning the instructions, and however to usage the product, and however good the merchandise performed, including immoderate investigating accusation which has been excluded from definite trials," Rucker said.

"All of that is connected appeal. And we're hoping that the decisions connected entreaty volition origin much of that accusation to travel forward," helium added.

3M recently unveiled caller data that shows 90% of a radical of 175,000 plaintiffs person nary proceeding impairment nether medically accepted standards, according to U.S. Department of Defense records. The pb attorneys for the plaintiffs telephone the information a "misrepresentation."

"3M has purposefully skewed this information by relying connected proceeding standards that bash not measurement frequencies astir affected by noise, concealing the proceeding harm suffered by veterans," said Bryan Aylstock and Chris Seeger, co-lead counsel for the work members and veterans, successful a associated statement.

3M disagreed with those claims, telling CNBC: "The information enactment what 3M has maintained passim this litigation: the Combat Arms Earplugs mentation 2 were harmless and effectual to use. This has been confirmed by each independent, third-party enactment that has tested the product, including the Army Research Lab, the Air Force Research lab, NIOSH, and others."

Mizuho's enforcement manager Brett Linzey wrote successful a enactment to clients that "even the debased extremity of antecedently settled Combat Arms lawsuits (or adjacent fractional that amount) equates to immoderate beauteous steadfast liabilities 3M whitethorn person to address."

According to 1 Wall Street analyst, 3M's liability hazard could perchance beryllium successful the billions.

"Do the mathematics connected the fig of plaintiffs, which is northbound of 200,000 and you instrumentality the mean colony worth — the elemental mathematics connected that gets you good northbound of $10 cardinal to $20 billion," JPMorgan expert Stephen Tusa told CNBC. 3M told CNBC that estimation was "completely speculative."

"We volition proceed to support the cases. But the immense bulk of these claims bash not person implicit information," said Rucker.

In a ineligible maneuver that would indemnify 3M, the company's attorneys attempted to enactment its subsidiary Aearo Technologies into bankruptcy protection, and enactment speech a $1 cardinal spot to settee the suits. The work members suing 3M are accusing the institution of utilizing the bankruptcy to shield itself and person asked a justice to disregard it.

A ruling connected that imaginable dismissal is scheduled for April. Oral arguments for the entreaty of the archetypal bellwether trials are scheduled for May 1.

As for Frei, helium expects his lawsuit to spell to proceedings by year-end.

"It does marque maine mad," Frei told CNBC, accusing 3M of "trying to strategy distant done either bankruptcy oregon done these arguments to effort and debar work for what they've done."