multidistrict litigation

April 19 (Reuters) – U.S. veterans and members of the military on Wednesday urged a judge to dismiss 3M’s (MMM.N) bid to use the bankruptcy of its subsidiary Aearo Technologies to shield itself from nearly 260,000 lawsuits over military-issue earplugs that former users allege were defective and damaged their hearing.

3M and Aearo say the earplug litigation has spiraled out of control. But attorney Adam Silverstein, who represents veterans suing 3M over hearing loss, said at a court hearing in Indianapolis that filing for bankruptcy, like “pulling a fire alarm,” should be reserved for urgent threats.

Aearo was not in need of emergency rescue, because it had filed for bankruptcy solely as “a strategic alternative to managing 3M’s litigation,” Silverstein said.

“If the firemen determine something is a false alarm, they don’t wait around to see if a fire might start later or if there’s some other problem they can assist with,” he said. “They leave.”

Aearo, which made the combat arms earplugs, filed for bankruptcy last July, with 3M pledging $1 billion to fund its liabilities stemming from the lawsuits that accuse both Aearo and 3M of misrepresenting the earplugs’ effectiveness, leading to hearing damage.

The plaintiffs have called that move a bid to escape the Florida federal court where the earplug lawsuits are consolidated in a so-called multidistrict litigation, following a series of unfavorable legal rulings and trial losses.

On Tuesday, Aearo attorney Chad Husnick said U.S. law does not require the “house to be on fire” before a company files for bankruptcy. Aearo should be allowed to proactively resolve the growing problem of earplug lawsuits through a bankruptcy settlement, Husnick said.

U.S. Bankruptcy Judge Jeffrey Graham will continue to hear evidence on Thursday before he makes a ruling on whether to dismiss the case.

3M’s bankruptcy