3M (NYSE:MMM) has started sending payouts for the infamous 3M earplugs lawsuit settlement, which amounts to a $6 billion agreement pertaining to the company’s hearing loss-inducing ear plugs. Indeed, more than 30,000 service members and veterans will receive a piece of the payout before the end of the month, the company stated. Upon receiving the recovery, recipients forfeit further legal action against 3M.
The settlement serves as a partial conclusion of a nearly six-year battle between 3M and veterans. According to vets, the combat earplugs caused hearing loss and tinnitus when used close to small arms, heavy artillery and rockets. 3M has previously defended its product and continues to maintain that the agreement is “not an admission of liability.”
“The products at issue in this litigation are safe and effective when used properly. 3M is prepared to continue to defend itself in the litigation if certain agreed terms of the settlement agreement are not fulfilled,” the company said.
The company’s accelerated payment schedule has been enthusiastically received by the side of the plaintiff. “We are pleased with 3M’s decision to move up this payment and appreciate its commitment to the resolution of these claims,” Bryan Aylstock, an attorney for the plaintiffs, said Tuesday in a statement to the Star Tribune.
There are nearly 300,000 claimants who are part of the lawsuit against 3M. Many of them will likely opt into a settlement payment rather than continue to trial. It’s still unknown just how much each individual is seeking in recovery under the current settlement.
3M Earplugs Lawsuit Settlement Weighs on MMM Stock
As part of the $6 billion settlement, $5 billion will be payed out in cash. Meanwhile, $1 billion will be shelled out in the form of common stock to claimants between 2023 and 2029. The company already issued $250 million as part of the settlement in December.
The earplugs themselves were issued by the U.S. military between 2003 and 2015. They were in use for both training and combat. The plaintiff accused 3M of knowingly selling defective earplugs. On the flip side, 3M has maintained veterans were likely improperly trained on using the product and that the earplugs were designed to meet the military’s own requests.
“It’s not like you can just hand them out and say, ‘Use this product, you’re going to be good,’” Mike Brock, an attorney for 3M, said during opening statements back in 2021. “It has to be fit properly.”
Unfortunately, 3M’s legal troubles have likely contributed to the company’s stock performance. MMM stock is down more than 13% since January 2023, even as the S&P 500 is up more than 21% over the same period.
On the date of publication, Shrey Dua did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
