U.S. bankruptcy Judge Jeffrey Graham recently ruled that military veterans who allege they suffered hearing loss because of 3M earplugs can continue to pursue litigation against the company, even though their subsidiaries filed for bankruptcy on July 26th. This ruling disrupts earplug manufacturer 3M’s efforts to evade payment of claims arising out of earplugs plaintiffs believe caused their hearing loss. Company shares plummeted 12% after this ruling. If you suffered hearing loss due to 3M earplugs, you should give our experienced product liability lawyers a call. At Moll Law Group, billions have been recovered in cases with which we’ve been involved.
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Court-watchers were not expecting the bankruptcy judge’s decision. Often courts do agree to stay (stop) litigation against subsidiaries’ solvent parent companies when they are being sued by many litigants and want to use the bankruptcy process to get a global settlement that might not represent the true value of the plaintiffs’ losses. The bankruptcy judge’s decision, couched within bankruptcy law, doesn’t stop 3M or its subsidiaries from trying to globally settle the litigation, but the company doesn’t have as much leverage to force plaintiffs to settle if there is no stay. Meanwhile the MDL judge left this decision in the bankruptcy court’s hands.
So far, 3M has lost 10 out of 16 bellwether trials in the earplugs litigation. It still asserts that its earplugs weren’t defective, and that bankruptcy would be an appropriate means of resolving liability. It has filed a notice of appeal of the ruling and may try to appeal directly to the Seventh Circuit, United States Circuit Court of Appeals.