Judge in $6 Billion 3M Settlement Issues Order to Stop Litigation Funding

A federal judge has barred attorneys and claimants involved in 3M’s $6 billion settlement with U.S. military servicemembers from any third-party litigation funding agreements.

District Judge M. Casey Rodgers in the U.S. District Court for the Northern District of Florida said in an order late last month that it is “important that [claimants] are not exploited by predatory lending practices.”

Rodgers also ordered attorneys to disclose any funding agreements made by the 250,000 or so claimants before or after the settlement was made to resolve the multi-district litigation case – one of the largest in U.S. history – over 3M’s Combat Arms Earplug products. Plaintiffs claimed the earplugs were defective and led to hearing damage.

The judge’s order was issued Aug. 29. 3M’s settlement announcement, which the company said was not an admission of liability, was made the same day.

Related: 3M to Pay $6 Billion to Settle Military Earplug Lawsuits

“Settlements of this size and nature have often attracted the attention of third-party litigation funding entities intending to prey on litigants, including settlement participants seeking litigation funding pending the receipt of potential settlement funds,” Rodgers said, adding that these arrangements often include unreasonable fees and interest rates.

Counsel has 30 days from Aug. 29 to disclose any third-party litigation funding arrangements to a court-appointed settlement administrator, who will have “no obligation to negotiate repayment of any third-party litigation or settlement loan.”

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