Florida judge won't block 3M from asking bankruptcy judge to stop earplug suits

The logo of 3M is seen at the 3M Tilloy plant in Tilloy-Lez-Cambrai, France, August 18, 2019. REUTERS/Pascal Rossignol
  • 3M cannot ask bankruptcy court to relitigate issues
  • Bankruptcy judge is currently considering 3M's bid to escape lawsuits

(Reuters) - A federal judge in Florida on Tuesday denied a veteran's bid to block 3M Co from asking a U.S. bankruptcy court in Indiana to stop the mass tort litigation over its military-issue earplugs.

The decision by U.S. District Judge M. Casey Rodgers in Pensacola, who is overseeing about 230,000 lawsuits claiming the earplugs cause hearing loss, removes one potential hurdle to the Minnesota company's plan to resolve the lawsuits through the bankruptcy of its subsidiary Aearo Technologies LLC, the original maker of earplugs, rather than in the multidistrict litigation (MDL) before Rodgers.

Veteran Richard Valle had asked Rodgers to block the company's plan earlier this month. He argued that the company was trying to dodge her jurisdiction simply because it did not like the results of the MDL so far, which has seen plaintiffs win 10 out of 16 trials and reap $265 million in combined awards for 13 service members.

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Chief U.S. Bankruptcy Judge Jeffrey Graham in Indianapolis is currently considering whether to issue an order shielding 3M, which is not bankrupt, from the lawsuits.

Rodgers, who has been harshly critical of 3M's strategy, said that while she believed she had the authority to bar 3M from seeking protection, the bankruptcy court was "well-qualified and aptly suited" to decide the issue.

Rodgers instead issued a narrower order prohibiting 3M from asking the bankruptcy court to relitigate any issues she had already decided. She noted that Aearo said in a filing last month that the bankruptcy court could resolve the claims based on a "fair and complete evidentiary record," while attacking Rodgers' rulings on evidentiary issues.

Rodgers said for the company to seek more favorable rulings in the bankruptcy court was a threat to her jurisdiction that "cannot and will not be countenanced."

Christopher Seeger of Seeger Weiss and Bryan Aylstock of Aylstock, Witkin, Kreis & Overholtz, lawyers for plaintiffs in the litigation, said they were pleased with the ruling.

"We continue to believe that 3M should not receive the benefit of a stay in the litigation considering it is far from a bankrupt defendant, and we will pursue all available remedies to hold them accountable," they said.

3M had no immediate comment.

Aearo filed for bankruptcy on July 26 and said it had committed $1 billion to resolve the earplug litigation. Days before the filing, it entered into an agreement to indemnify 3M for all liability related to the Combat Arms Earplugs Version 2 (CAEv2).

3M, which has denied liability, has argued that the earplug cases should now be resolved in bankruptcy court and called the MDL "broken beyond repair."

The case is In re 3M Combat Arms Earplug Products Liability Litigation, U.S. District Court, Northern District of Florida, No. 19-md-2885.

For the plaintiffs: Adam Wolfson of Quinn Emanuel Urquhart & Sullivan; Ashley Keller of Keller Postman; Bryan Aylstock, Daniel Thornburgh and Jennifer Hoekstra of Aylstock, Witkin, Kreis & Overholtz; Shelley Hutson of Clark, Love & Hutson; Chris Seeger of Seeger Weiss; and Joseph Messa of Messa & Associates

For 3M: Kimberly Branscome of Dechert; and Jessica Lauria of White & Case

Read more:

Veterans seek to block 3M's bankruptcy gambit

3M to spin off healthcare business, earplugs unit seeks bankruptcy protection

Florida judge sharply questions 3M bankruptcy strategy

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Brendan Pierson reports on product liability litigation and on all areas of health care law. He can be reached at brendan.pierson@thomsonreuters.com.