3M CEO Ordered To Personally Attend Mediation Sessions (In re 3M Combat Earplug Litigation)

By: Donald L Swanson

3M’s Chief Executive Officer “must personally attend, and listen and engage directly with the mediators.”

• From mediation Order entered May 19, 2023, in In re 3M Combat Arms Earplug Products Liability Litigation, Case No. 3740 (Doc. 3740), by U.S. District Court in Northern Florida.

Wow!  That’s an interesting approach.

What follows are summaries of, (i) the mediation Order quoted above, and (ii) its historical context.

Mediation Order

Here are the essential points of the mediation Order quoted above

–Leadership Generally

• Leadership requires adaptability—as the nature and demands of a situation change, so too must a leader’s actions;
• Many situations do not require a leader’s presence or input—at times a leader’s  presence may even impede progress;
• In other situations, successful leadership is by delegation of responsibility; but
• Sometimes, the leader must be in the room—and this is one of those times.

–Mediation Directive

Negotiations between the parties toward a global resolution are ongoing and have progressed to a critical juncture.  Now, the most senior party representative leaders must be present.

Accordingly:

• every member of Plaintiffs’ Settlement Committee must personally attend the next mediation; and
• For 3M, Chief Executive Officer and Chairman of the Board Michael F. Roman must personally attend, and listen and engage directly with the mediators, so that:
  • his reports to the Board of Directors are properly informed by firsthand knowledge of the negotiations.

Historical Context

3M supplies combat earplugs to the U.S. military. 

260,000 lawsuits are on file, alleging that 3M’s earplugs caused hearing loss.  Those lawsuits are consolidated into a multidistrict proceeding in the U.S. District Court in Northern Florida.

3M’s subsidiary that made the combat earplugs, Aearo Technologies LLC, files bankruptcy in Southern Indiana (Case No. 22-2890).  

So . . . there are two separate-but-related cases pending at the same time: (i) the multidistrict case against 3M in Florida, and (ii) the bankruptcy case of 3M’s subsidiary in Indiana.

–Prior Mediation Impasse

On January 18, 2023, the District Judge in Northern Florida issues an Order (Doc. 3624) with the following findings, analysis and rulings.

Over the past three years, the parties and the Court are quietly pursuing settlement negotiations—under the guidance of a special master—as the bellwether process unfolds.  But:

• no serious progress is made; and
• yet both sides assure the Court of their commitment to a negotiated settlement.

So, the Florida District Court allows negotiations to continue under another special master.  But again, despite repeated assurances from the parties that a resolution is at hand, nothing changes.

Meanwhile, the bellwether process concludes and the litigation focus shifts to preparing waves of individual cases—500 at a time—for remand to their transferor courts for trial.

So, the Court institutes a formal mediation protocol and commissions the assistance of another mediator.  But significant developments follow, including:

• Aearo Technologies files its bankruptcy, but the Bankruptcy Court refuses to stay continued litigation against 3M; and
• mediation efforts continue in 3M’s Florida case, and Aearo Technologies is invited to participate.

Seven months later, not one case has settled. 

A mediation impasse exists, the Florida Court concludes, because:

• 3M declares that it has no desire to reach a global resolution in the Florida case and is absolutely determined to resolve all claims solely through the bankruptcy case;
• Plaintiffs’ leaders declare that they remain committed to a settlement through the Florida case and categorically reject any bankruptcy-only solution; and
• further mediation proceedings would be unproductive.

So, the Florida Court terminates the formal mediation process—though informal settlement efforts are allowed to proceed—and turns its focus to resolving Daubert and summary judgment motions in the first wave of cases.

–Motion to Reinstate Mediation

On April 27, 2023, Plaintiffs in the Florida case file their Motion to reinstate formal mediation (Doc. 3715), alleging:

• they “recently made a demand of 3M for global resolution” in the Florida case “of the combat arms litigation against 3M in its entirety”; and
• formal mediation efforts in the Florida case “would therefore be of great assistance in achieving a mutually acceptable resolution.”

In response, 3M files an objection (Doc. 3718) saying:

• 3M has repeatedly expressed its desire to reach a global resolution of this litigation through good-faith negotiations:
  • to that end, 3M is fully engaged in an ongoing mediation in Aearo’s bankruptcy that encompasses all issues—not just the subset of issues before the Florida Court;
• Plaintiffs’ invitation to launch a parallel mediation in the Florida case should be denied:
  • Less than four months ago, this Court declared a mediation impasse and terminated the formal mediation effort;
  • From 3M’s perspective, nothing has materially changed since then;
  • Resuming formal mediation, solely at the behest of one party and over opposition of the other, is counterproductive;
• 3M remains committed to continuing discussions—as it has been doing:
  • will continue supporting Aearo Technologies in its mediation efforts; and
  • will continue engaging in the ongoing chapter 11 mediation toward a global resolution of all disputes.

Plaintiffs ask for an opportunity to file a Reply to 3M’s objection (see Doc. 3719).  But the Court:

• denies the Reply request (see Doc. 3720); and
• issues the mediation Order quoted at the beginning of this article.

Conclusion

It’s not every day that a huge company’s CEO/Board Chair is ordered to appear at mediation sessions in-person.

But then . . . the 3M case is not and every-day case.

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