Nathan Frei, a former active-duty infantry officer who served from 2011 to 2015, first noticed issues together with his hearing in 2013, shortly after getting back from training with the U.S. Army. Nate was identified with tinnitus and now could be one in every of greater than 200,000 claimants suing 3M over its Combat Arms earplugs.
Nathan Frei
Former energetic duty U.S. army infantry officer Nathan Frei says from 2011 to 2015 he went through among the most intense training that the U.S. Army had to supply. With it, got here loud noises — all the things from weapons to helicopters to explosions.
To guard his hearing, Frei wore standard issue earplugs made by 3M.
Today, he’s one in every of greater than 200,000 military service members and veterans suing the conglomerate. 3M stock, which hit a latest 52-week low Wednesday, is one in every of the worst-performing industrial stocks this 12 months, down greater than 16% in 2023, versus the XLI Industrials ETF, which is down 1.5% 12 months so far.
Plaintiffs claim 3M earplugs were “defective” and didn’t protect against hearing loss and tinnitus.
“We used [the earplugs] each time that we were around loud noises,” Frei, who lives in Seattle, told CNBC. “And I relied on that hearing protection during that point.”
From 2003 to 2015, Aearo Technologies and its parent company, 3M, manufactured and supplied the U.S. military with the Combat Arms CAEv2 earplugs. The plugs were standard issue for soldiers in Afghanistan and Iraq and were designed to guard service members’ hearing in military training and through combat.
3M’s Combat Arms CAEv2 earplugs
CNBC
Each earplug had two ends: The green end was designed to dam out all sound. The yellow end, signaling “whisper mode,” presupposed to block out loud sound — but allowed the user to listen to quieter noises, like conversations.
I do not seem like someone who probably must have as much hearing loss as I do at my age.
Nathan Frei
Former energetic duty U.S. army infantry officer
“We were told that by wearing ‘whisper mode’ that we could still protect our hearing,” said Frei, who claims he first noticed issues together with his hearing in 2013.
“I used to be hearing ringing,” Frei recalled. “At first, I believed it was a TV that was on. And so I searched and scoured the home searching for where the noise was coming from before I noticed that it was just in my head.”
Because the years passed, the 35-year-old said, his hearing issues got worse. Department of Veterans Affairs records shared by Frei with CNBC show he was later diagnosed with tinnitus.
“It’s constant,” he said. “It is a loud ringing in my ears — very much like identical to a buzz noise.”
He said the ringing is so disruptive it occasionally keeps him awake.
“I do not seem like someone who probably must have as much hearing loss as I do at my age,” he said.
3M’s response
Eric Rucker, an attorney for 3M, told CNBC the corporate has great respect for the boys and girls within the military and that their safety has all the time been a priority.
Maplewood, Minnesota, 3M company global headquarters.
Michael Siluk | Getty Images
“The aim of the creation of [the Combat Arms earplugs] was to collaborate with the military to resolve one in every of the longest-standing problems they’ve had, that soldiers won’t wear their hearing protection around loud noises and in combat,” Rucker said.
Rucker said the plugs were designed in collaboration with the U.S. military and tested by the Air Force, Army, National Institute for Occupational Safety and Health, and others.
“All of that testing shows the Combat Arms earplugs, when properly fitted and when used in response to its instructions, work to guard people’s hearing,” he said.
Rucker conceded that military audiologists were “well trained in the way to train people and fit people for the usage of earplugs,” but maintained, “it must have worked and guarded their hearing in environments where it was appropriate to be using these earplugs.”
After a whistleblower suit was filed in 2016, accusing 3M of selling “dangerously defective” earplugs, the company agreed to pay $9.1 million to the Department of Justice to resolve the allegations without admitting liability.
Soon after, there was a flood of recent suits from a whole lot of 1000’s of other service members.
Where things stand today
Today, the lawsuits have been consolidated in Florida federal court, creating what some are calling the most important mass tort in U.S. history, surpassing even the multidistrict litigation involving Johnson & Johnson’s talc products.
3M has lost 10 of the 16 cases which have gone to trial to date, with a complete of $265 million awarded to 13 plaintiffs so far.
“There have been several bellwether trials. And unfortunately, Aearo and 3M haven’t been in a position to present the entire evidence related to the unique design of the product, the military’s involvement within the design of the product, the entire issues in regards to the instructions, and the way to use the product, and the way well the product performed, including some testing information which has been excluded from certain trials,” Rucker said.
“All of that’s on appeal. And we’re hoping that the selections on appeal will cause more of that information to come back forward,” he added.
The Combat Arms earplugs, when properly fitted and when used in response to its instructions, works to guard people’s hearing.
3M recently unveiled latest data that shows 90% of a bunch of 175,000 plaintiffs haven’t any hearing impairment under medically accepted standards, in response to U.S. Department of Defense records. The lead attorneys for the plaintiffs call the info a “misrepresentation.”
“3M has purposefully skewed this data by counting on hearing standards that don’t measure frequencies most affected by noise, concealing the hearing damage suffered by veterans,” said Bryan Aylstock and Chris Seeger, co-lead counsel for the service members and veterans, in a joint statement.
3M disagreed with those claims, telling CNBC: “The information support what 3M has maintained throughout this litigation: the Combat Arms Earplugs version two were secure and effective to make use of. This has been confirmed by every independent, third-party organization that has tested the product, including the Army Research Lab, the Air Force Research lab, NIOSH, and others.”
Liability risk
Mizuho’s executive director Brett Linzey wrote in a note to clients that “even the low end of previously settled Combat Arms lawsuits (and even half that quantity) equates to some pretty healthy liabilities 3M can have to deal with.”
In accordance with one Wall Street analyst, 3M’s liability risk could potentially be within the billions.
“Do the maths on the variety of plaintiffs, which is north of 200,000 and you’re taking the common settlement value — the simple arithmetic on that gets you well north of $10 billion to $20 billion,” JPMorgan analyst Stephen Tusa told CNBC. 3M told CNBC that estimate was “completely speculative.”
“We are going to proceed to defend the cases. However the overwhelming majority of those claims would not have complete information,” said Rucker.
In a legal maneuver that may indemnify 3M, the corporate’s attorneys attempted to place its subsidiary Aearo Technologies into chapter 11 protection, and put aside a $1 billion trust to settle the suits. The service members suing 3M are accusing the corporate of using the bankruptcy to shield itself and have asked a judge to dismiss it.
A ruling on that potential dismissal is scheduled for April. Oral arguments for the appeal of the initial bellwether trials are scheduled for May 1.
As for Frei, he expects his case to go to trial by year-end.
“It does make me mad,” Frei told CNBC, accusing 3M of “attempting to scheme away through either bankruptcy or through these arguments to attempt to avoid responsibility for what they’ve done.”