Bailey Glasser Team Led By Brian Glasser Helps Dismiss Improperly Filed Mass Tort Bankruptcy By 3M Subsidiary Aearo Technologies

In a win for injured soldiers, a federal judge has dismissed the bankruptcy of 3M subsidiary Aearo Technologies, finding that the filing doesn’t serve a valid reorganization purpose. Aearo and 3M were attempting to use this bankruptcy to resolve, on terms they wanted to dictate, more than 260,000 lawsuits brought by veterans and U.S. service members alleging that 3M military earplugs caused their hearing loss.

This new ruling upends 3M’s litigation strategy to resolve mass tort claims in bankruptcy and to circumvent the ability of plaintiffs to have their cases heard by a jury of their peers as guaranteed by the U.S. Constitution.

“The soldiers who used 3M earplugs deserve the chance to hold 3M accountable before a jury of their peers,” said Bailey Glasser founding partner Brian Glasser. “3M and Aearo have no special right to put veterans in a bankruptcy box, and now can face these claims in front of juries around the nation.”

The new ruling dismissing the Aearo bankruptcy is the second time in 2023 that federal judges have explicitly rejected the cynical attempts by multinational conglomerates, worth billions of dollars, to hide behind bankruptcy filings and procedures. 

In January, the Third Circuit Court of Appeals rejected Johnson & Johnson’s attempt to use a bankruptcy proceeding and the “Texas Two-Step” legal maneuver to dump 38,000 pending lawsuits into a brand-new subsidiary and within hours of creation, declare bankruptcy.  In strong language, the Third Circuit Court of Appeals found that the JNJ/LTL bankruptcy petition “has no valid bankruptcy purpose” and dismissed the bankruptcy in its entirety, reversing a ruling by a lower bankruptcy court.

Brian Glasser and the Bailey Glasser team were co-lead counsel to the trial team in the JNJ/LTL bankruptcy case and a member of the trial team in the 3M case.  

In this Aearo matter, the bankruptcy judge ruled that Aearo, as a subsidiary of 3M, enjoys a "greater degree of financial security than warrants bankruptcy protection  . . . . In this Court’s view, allowing an otherwise financially healthy debtor with no impending solvency issues to remain in bankruptcy, much less one whose liability for most of its debts is supported by an even more financially healthy, Fortune 500 multinational conglomerate, exceeds the boundaries of the Court’s limited jurisdiction.”

This pair of federal court rulings are continued excellent news for injured plaintiffs seeking justice. 

Indeed, the JNJ/LTL Third Circuit dismissal “casts a particularly prominent shadow over Aearo’s bankruptcy,” said the Aearo bankruptcy court. The ruling on Friday, however, isn’t intended to permanently block Aearo from potentially seeking relief from its liabilities in bankruptcy in the future, only that allowing the bankruptcy to proceed at this time would be “fatally premature.”

In addition to Brian Glasser, the Bailey Glasser team included Commercial & Environmental Practice Group Leader Cary Joshi, Mass Tort Practice Group Leader David Selby, ESI Practice Group Leader Katherine Charonko, and Mass Tort partner D. Todd Mathews.