A U.S. judge ruled on Friday that the bankruptcy of a subsidiary did not prevent lawsuits against the non-bankrupt parent business, 3M Co., which means that the company must now deal with more than 230,000 defective earplugs claims.
A subsidiary of 3M, Aearo Technologies LLC, contended that granting 3M the same protections that are generally granted to bankruptcy-filing businesses would provide Aearo more time to address its debts and restructuring objectives.
Veterans who claim that earplugs made by Aearo caused their hearing loss have a speedier and fairer means to be compensated because of bankruptcy, according to Aearo and 3M. However, an Indianapolis bankruptcy judge ruled that Aearo's bankruptcy restructuring may go through concurrently with the legal actions.
The judge determined that although 3M and Aearo may have sought extra leverage through the bankruptcy procedures due to the sheer enormity of the pooled litigation, there was no legal requirement to protect 3M.
The hearing-impaired veterans' attorneys expressed excitement about continuing their legal actions against 3M in other courts. According to the plaintiffs' attorneys, the jury's verdict completely rejects 3M's attempt to avoid responsibility and hide behind bankruptcy.
A 3M spokesman announced the company's intention to file an appeal, arguing that trying each of these lawsuits individually over the coming years won't bring about any certainty or fairness for any party.
On July 26, a 3M subsidiary named Aearo Technologies LLC sought bankruptcy protection in Indiana to settle claims that the company's Combat Arms Earplugs Version 2 (CAEv2) caused hearing loss.
According to a statement released by the company late on Friday, Aearo will continue to participate in the chapter 11 procedures and 3M will keep defending its position in the lawsuit. On the anticipated closing date of September 1, 3M is still anticipating that the ongoing separation of its food safety division would be finished.
The complaints, which were combined in a federal court in Florida, have developed into the biggest mass tort case in American history. Aearo agreed to pay them $1 billion in a trust and to hold 3M harmless from any claims relating to CAEv2 liability.
In its denial of responsibility, 3M said that its earplugs protected soldiers on the battlefield while preserving their hearing. The Florida judge presiding over the earplug claims has reprimanded 3M for acting with blatant dishonesty in trying to transfer its liabilities to a bankrupt subsidiary.
The bankruptcy judge has come under fire from 3M and Aearo for allowing the combined lawsuit to grow out of control, noting that earplug cases now make up a staggering 30% of all cases active in U.S. federal courts.
In the 16 cases that have gone to trial so far, 3M has lost 10, and 13 plaintiffs have received a total award of nearly $265 million. On Friday, 3M's stock price fell 12% to $129 per share.
An appeal from Zimmer Biomet to request a new trial following a $3.5 million hip implant lawsuit judgment was rejected by a U.S. Court of Appeals.
A federal jury in Iowa awarded the plaintiff $3.55 million in 2020 for damages brought on by the company's hotly contested M2a Magnum metal-on-metal hip implant. The jury decided that the M2a Magnum was improperly designed and returned a judgment in favor of the plaintiff. A federal judge in Missouri approved a $21 million verdict for the M2A Magnum about the same time as the Iowa action.
In a ruling released on August 24, the U.S. Court of Appeals for the Eight Circuit upheld the district court's denial of Zimmer Biomet's requests for a new trial and a renewal of its motion for judgment as a matter of law.
The appeals court determined that Zimmer Biomet's request for judgment as a matter of law on the $3.55 million in punitive damages was not improperly denied by the district court because a reasonable jury could have found in favor of the plaintiff by viewing the evidence in the light most favorable to the verdict.
The district court, according to Zimmer Biomet, overstepped its bounds by neglecting to inform the jury that the M2a Magnum's instructions and cautions were sufficient as a matter of law. The business claimed that it was incorrect to omit the instruction since Iowa's Civil Jury Instruction 1000.4 states that such instructions and cautions should be taken into account when determining whether a product was reasonably safe.
The plaintiff reportedly acknowledges that warnings and instructions are included as a factor that may have instructed the jury, according to the court. The plaintiff countered that the court was not compelled to take the factor into consideration because the jury was not confronted with any evidence or problems pertaining to the sufficiency of the warnings and instructions for the hip implant. The court of appeals concurred.
A major failure of the medical device sector in the early 21st century is the use of metal-on-metal implants. Although the hip implants were intended to be more robust and long-lasting, they have been plagued by increased failure rates and the possibility of exposure to toxins from metal particles generated during friction.
There are currently no FDA-approved metal-on-metal total hip replacement devices on the market in the United States, despite the FDA's mandate for PMAs for metal-on-metal hip implants in 2016.