Soldiers who claim they lost a hearing because of malfunctioning 3M earplugs urged an Indiana judge to dismiss a 3M subsidiary's bankruptcy lawsuit, claiming it was as unjustified as a Johnson & Johnson unit's failed bankruptcy application.
A committee representing over 200,000 veterans and active-duty service members with claims against 3M Co. told an Indiana bankruptcy judge that 3M subsidiary Aearo Technologies LLC's bankruptcy filing is heavily reliant on a series of rulings that allowed J&J's talc unit to continue its bankruptcy case. However, the Third Circuit overruled both findings and ordered the bankruptcy case to be dismissed, and the military members believe the Indiana court should do the same.
It's impossible to imagine a more straightforward move than LTL Management LLC referring to the J&J business that declared bankruptcy. In almost every case, the names 'LTL' and 'J&J' could easily be substituted with 'Aearo' and '3M,' and the analysis would be spot on. To the degree that there are disparities, they either support dismissal more strongly or are unimportant.
The LTL bankruptcy occurred at a time when the business was dealing with billions of dollars in liabilities due to J&J's talc products, which tens of thousands of patients alleged caused mesothelioma, ovarian cancer, and other terrible illnesses. On Jan. 30, the Third Circuit rejected the Chapter 11 complaint, stating that the firm could not be in financial difficulty given a valued funding deal with its parent company and J&J itself.
The service members said that the LTL funding arrangement served as a model for 3M's funding agreement with Aearo, which was signed one day before Aearo declared bankruptcy. The 3M agreement assures that Aearo will stay functioning, independent of the continuing dispute against 3M's Combat Arms Earplugs Version 2, according to military personnel.
They also claimed that Aearo's bankruptcy was not filed in good faith, claiming that 3M was utilizing the bankruptcy process to gain a tactical edge in the hundreds of outstanding litigation cases involving their military earplugs. According to the military members, Aearo filed for bankruptcy after juries awarded over $300 million in damages to service members in 13 bellwether cases.
Aearo's counsel did not immediately reply to a request for comment, but 3M justified the Aearo bankruptcy as helping to decrease the expense and time necessary to resolve the earplug lawsuits on an individual basis.
If the motion to dismiss is granted and maintained on appeal, it will unnecessarily disrupt the well-established Chapter 11 process by returning to prolonged litigation under the mass tort system, which has not offered clarity or certainty after sixteen trials to date, Aearo said in a statement.