3M Co. failed a bankruptcy court gambit to resolve almost 230,000 military earplug defect complaints and is now finding another road through mass tort litigation, one that includes a combination of trials, appeals, and settlements which would require the company to make difficult decisions, particularly about scheduling.
It is under pressure to address the massive backlog of veterans' hearing loss and tinnitus claims, yet it has appeals pending. More trials beyond the 16 already held might either assist or damage its settlement position. The stakes in the multidistrict action, as well as on appeal, could not be higher.
On Aug. 26, shares of the firm, which also sells Scotch-brand tape, Post-It notes, and NexCare bandages, plummeted 9% after a federal bankruptcy court refused to suspend the multidistrict earplug case. 3M attempted to reroute the claims through its company Aearo Technologies, which designed the Combat Arms version 2 earplugs.
Since then, 3M's stock has dropped more than 14%, closing at $110.50 a share on September 30, down from a 12-month high of $186.30 on November 12, 2021.
Analysts have struggled to put a price tag on 3M's possible earplug risk. In February, intelligence assessed that the stock's price relative to its industrial rivals reflected a $33 billion discount due to earplugs and a PFAS mass torts litigation in which it is also involved.
An analyst testifying for some of the veterans in the Aearo bankruptcy stated in August that 3M's earplug losses may be more than $100 billion, a number 3M rejected as faulty and unsubstantiated.
Whatever the figure, the potential liabilities are substantial, forcing the corporation to exploit whatever power it has in upcoming trials and unresolved appeals in order to find a way ahead.
In December, the first payments from a $518 million settlement with the nation's three largest opioid dealers will begin to reach Washington communities.
These considerable resources will assist Washington in combating the opioid crisis, which is tearing holes in the fabric of communities and families, taxing public health resources, and flooding the foster care system with young, innocent victims.
The attorney general of Washington rejected a nationwide settlement with distributors McKesson Corp., Cardinal Health Inc., and AmerisourceBergen Corp., as well as Johnson & Johnson, which was approved by practically every other state. The states will collect approximately $20 billion over the next 18 years under that agreement.
Instead, Washington spent six months in a lengthy lawsuit against the firms before reaching its own settlement in May, which is $46 million higher than the state would have earned under the national agreement. Washington is also pursuing a separate action against Johnson & Johnson, with a trial scheduled for next year.
Over the previous two decades, overdoses of opioids, including both prescription painkillers and illegal narcotics like heroin, have been connected to the deaths of over 500,000 Americans. The introduction of illegally made fentanyl has lately increased deaths.
The attorney general contended that the three corporations transported so many narcotics to Washington that it was clear they were encouraging addiction. Between 1997 and 2011, opioid sales in the state increased by more than 500%. In 2011, the state distributed almost 112 million daily doses of all prescribed opioids, enough for a 16-day supply for each citizen. Eight of Washington's 39 counties had more prescriptions than people in 2015.
The corporations argued that they only delivered opioids recommended by doctors and that it was not their responsibility to second-guess the prescriptions or interfere with the doctor-patient relationship.
Furthermore, the firms contended that Washington state had a significant role in the outbreak. Concerned that people suffering from chronic pain were being undertreated, Congress created the Intractable Pain Act in the 1990s, making it easier to prescribe opiates. The opioid business has committed to settlements totalling more than $40 billion nationwide.
The $518 million settlement with distributors will be paid to Washington over the following 17 years, with the first payment of $55 million due on December 1. The remaining $476 million will go toward combating the opioid problem, such as substance abuse treatment, extending access to overdose-reversal medications, and providing housing, job placement, and other assistance to individuals battling addiction. The remaining funds will be used to cover legal expenses.
Washington's settlement needed permission from 125 cities and counties, which will each receive $215 million and have agreed to share the money based on variables such as how many opioids were transported to their jurisdictions and how many citizens died from overdoses.