3M recently started sending out payments to veterans and service members tied to a $6 billion settlement the company agreed to last year.
According to CNN, the manufacturing company was accused of providing faulty earplugs to the U.S. military between 2003 and 2015.
Around 300,000 lawsuits were ultimately filed by both veterans and service members about the earplugs, which argued that the defective earplugs caused hearing loss and tinnitus.
On Dec. 26, 3M reportedly processed a payment of roughly $250 million to the Qualified Settlement Fund for around 30,000 claimants, and it plans to issue a payout of $253 million by Jan. 31, per Time.
The total payout of $6 billion — $5 billion in cash and $1 million in 3M stocks — is expected to be completed by 2029.
In exchange for compensation, the claimants will “forfeit future legal claims against 3M,” according to CBS News.
Why the 3M earplug settlement happened
According to Time, the settlement discussion started in 2016, when business rival Moldex-Metric alleged that 3M’s Combat Arms earplugs — designated to specific military branches and used in foreign conflicts — were “dangerously defective” and “likely caused thousands of soldiers to suffer significant hearing loss and tinnitus.”
In 2018, the company settled with the U.S. Justice Department and paid $9 million to the department based on allegations about the defective earplugs, per Time. News of the settlement launched a stream of veterans filing complaints against the company and its subsidiary Aearo Technologies.
One of the claimants, Nathan Frei, spoke with CNBC about when he first noticed hearing issues in 2013 during his return from U.S. Army training. His hearing condition worsened as he developed tinnitus — a medical condition in which ears noticeably ring that can’t be completely cured, according to Time.
As reported by Reuters, 3M and Aearo Technologies attempted to file bankruptcy due to the overwhelming amount of litigation, but a U.S. judge dismissed the filing last June, arguing that the company could reach a settlement with the claimants.
3M statements on settlement
3M chairman and chief executive officer Mike Roman expressed in a 2022 statement, “We have great respect for the brave men and women who protect us, and remain committed to the military as an active partner and valued customer going forward.”
The company shared in a recent statement that the company “received strong and widespread support from claimants and the broader military community” regarding the agreed upon settlement. The company added, “Aearo and 3M will continue to work with all parties and the courts toward full implementation of the settlement agreement and will provide updates as additional milestones are reached.”
But 3M last August released a statement on its website claiming the company’s agreement “is not an admission of liability,” and that “the products at issue in this litigation are safe and effective when used properly.”