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On December 19, 2022, the NAM filed an amicus brief urging the 7th Circuit to stay or enjoin ongoing mass tort litigation against a manufacturer’s solvent parent to allow the manufacturer to resolve its overwhelming tort liabilities through bankruptcy. Debtor Aearo Technologies LLC sought chapter 11 relief and, on the same day, requested, under relevant provisions of the Bankruptcy Code, a stay or injunction of all pending and future actions seeking to hold Aearo and 3M (its parent) liable for alleged injuries related to military earplugs manufactured by the companies. Litigation over the earplugs’ alleged defective design and marketing has become the largest multidistrict litigation in history, with over 290,000 claims. The bankruptcy court denied Aearo’s request, finding that the Bankruptcy Code only authorized it to enter orders to protect the “debtor, not non-bankruptcy co-debtors like 3M. The bankruptcy court further determined that a stay of pending litigation and an injunction against future actions were unwarranted because, ultimately, under the terms of their funding agreement, 3M will fully fund any liability incurred by Aearo” related to the earplugs. The instant appeal followed.

Our brief argues that bankruptcy, unlike MDL, is well equipped to resolve mass-tort lawsuits of this magnitude in an efficient manner. Further, unlike in the MDL context, bankruptcy promotes global resolution of a company’s liabilities, by sweeping in even future claims based on injuries that have not yet manifested. We urge the 7th Circuit to clarify that a bankruptcy court can and should do what is necessary and appropriate to enable a bankruptcy proceeding’s success—including staying parallel mass-tort litigation against a related entity whose liabilities redound to the debtor.