December 9, 2021

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Bellwether Military Earplug Verdicts Underscore Importance of Establishing the Government-Contractor Defense | Husch Blackwell LLP

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In the most recent round of the long-running litigation over hearing protection supplied by manufacturing giant 3M and used by U.S. Military personnel from 2002 until 2015, Plaintiffs have obtained large verdicts in 3 out of 4 bellwether cases against 3M.

Case History

In July 2018, 3M reached a $9.1-million settlement with the Department of Justice in a False Claims Act lawsuit. Subsequently, hundreds of thousands of individual claims followed in courts across the United State, with Plaintiffs alleging that 3M’s Combat Arms Earplugs (Version 2) were defective. In April 2019, the United States Judicial Panel on Multidistrict Litigation ordered that all earplug lawsuits against 3M pending in federal district courts would be transferred to the United States District Court for the Northern District of Florida (the “MDL”).

Once in the MDL, 3M sought summary judgment based on the government-contractor defense announced by the Supreme Court in Boyle v. United Technologies Corp., 487 U.S. 500 (1988).  The government-contractor defense shields manufacturers from liability when: (1) the United States meaningfully reviewed and approved reasonably precise specifications for an allegedly defective design feature; (2) the contractor’s work conformed to the Government-approved specifications; and (3) the contractor warned the United States about dangers that were actually known to the contractor but not to the Government. 3M argued that the earplugs were developed in consultation with the U.S. Military. Judge M. Casey Rogers, however, rejected 3M’s assertion of this defense because the earplug design in question existed and came into existence without any input from the Army. And, because the Army never issued a request for a design proposal for new earplugs, there was no competitive bidding process during which the Army reviewed and approved reasonably precise design specifications.

After denying summary judgment for 3M, Judge Rogers set bellwether trials to begin in April 2021. In the first trial, three veterans obtained a verdict totaling $7.1 million, almost $6.5 million of which was punitive damages. While 3M obtained a defense verdict in the second bellwether trial, it was found 62% liable to one veteran who sustained $1.7 million in damages. On October 1, 2021, a jury returned an $8.2 million verdict in favor of a single veteran. At least seven more bellwether trials are scheduled soon, and one is currently underway. No appellate court has yet weighed in on any of these first few verdicts.

Analysis

Defective earplug litigation has become the nation’s largest multi-district, mass tort litigation.  Although exceptions exist, the plaintiffs in these cases are almost always military veterans. With three of four verdicts in their favor to date and the large number of veterans who served between 2002 and 2015, plaintiffs’ lawyers will probably continue to pursue clients to file new claims.

For businesses who design, manufacture, and supply products to the U.S. Government, the MDL Court’s rejection of the government-contractor defense in this case is cause for concern. Businesses who have the U.S. Government as a customer should carefully consider the terms on which the supply contracts are entered. It may be advantageous, for example, to provide a newly designed product in response to a specific design specification, and to provide the Government with full testing and capability data for the product.

Unless a federal appellate court overturns the district court’s decision on the government-contractor defense, commercially available, off-the-shelf products are unlikely to qualify for the government-contractor defense, particularly where there is no precise specification provided by the Government and no design proposal provided by the manufacturer or supplier that is approved by the Government after disclosure of the product’s limitations. Frequent communications with the Government regarding the designs and whether they are satisfactory are recommended.  Finally, the Government should be included on product testing during the initial production stages as well as through final production phases to ensure that the products are satisfactory and meet the Government’s stated needs.

Husch Blackwell will continue to monitor the 3M earplug litigation and assess the impact on industries and businesses throughout the country.

Sources

https://www.justice.gov/opa/pr/3m-company-agrees-pay-91-million-resolve-allegations-it-supplied-united-states-defective-dual

https://www.jpml.uscourts.gov/sites/jpml/files/MDL-2885-Initial_Transfer-03-19.pdf

https://www.reuters.com/world/us/jury-finds-3ms-earplugs-caused-us-military-vets-hearing-loss-2021-04-30/

https://www.reuters.com/legal/litigation/3m-face-four-more-trials-massive-military-earplug-litigation-2021-10-06/

https://www.reuters.com/legal/litigation/3m-loses-third-trial-huge-military-earplug-mass-tort-2021-06-19/

https://www.reuters.com/legal/litigation/3m-hit-with-82-million-verdict-fourth-military-earplug-trial-2021-10-01/

https://www.law.com/dailybusinessreview/2021/10/01/florida-jury-awards-8-2m-in-fourth-3m-combat-earplug-verdict/

https://www.startribune.com/judge-rules-against-key-3m-defense-in-earplug-lawsuit/571921552/

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https://www.jdsupra.com/legalnews/bellwether-military-earplug-verdicts-8931054/

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