A federal judge criticized 3M Co.’s attempt to use the protections of chapter 11 to resolve mass injury claims by U.S. military veterans, but will allow a bankruptcy court to decide whether to shield the company from ongoing litigation, WSJ Pro Bankruptcy reported. Judge M. Casey Rodgers in the U.S. District Court in Pensacola, Fla., declined on Sunday to prohibit 3M from contesting its full liability for injury claims alleging that earplugs manufactured by the company’s Aearo Technologies LLC unit were defective. Aearo filed for chapter 11 protection last month, shortly after assuming liability for roughly 230,000 pending claims against the business and its publicly traded parent company, 3M. Aearo wound up in dire financial straits after that voluntary assumption of liability, which put it on the hook for the largest multidistrict litigation in U.S. history, according to the judge’s ruling. Plaintiffs’ lawyers had requested that 3M be prohibited from contesting its full liability for the alleged earplug injuries, saying it was attempting to re-litigate that issue in bankruptcy court after proceeding in the tort litigation as if it alone bore responsibility. A 3M spokesman said the company’s court filings show the chapter 11 process “offers a more efficient, equitable, and expeditious means to resolve this litigation. Claimants determined to be entitled to compensation will be paid sooner, and 3M and Aearo will be able to better focus on making products people depend on.” In her ruling, Judge Rodgers said 3M’s move to unload injury liabilities onto Aearo was devised to escape the multidistrict litigation for good because 3M was “displeased with the rulings of this court” and several jury verdicts against the company. Judge Rodgers said that 3M had never indicated in more than three years of litigation “that any entity other than itself was responsible” for the service members’ claims. The judge said she was “deeply concerned” about 3M’s “sudden, bankruptcy eve about-face regarding the entity responsible,” but said it wasn’t her place to prohibit 3M from mounting such a potential defense.
