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(Reuters) – By the end of 2023, we should have a much better idea about whether companies facing vast mass torts exposure can use the bankruptcy system to sidestep multidistrict litigation in federal court.
On Wednesday, the 7th U.S. Circuit Court of Appeals granted a petition by 3M Co subsidiary Aearo Technologies LLC to review a bankruptcy court’s decision refusing to block MDL litigation against the parent company despite Aearo’s Chapter 11 bankruptcy.
The 7th Circuit order means that Aearo will not have to first challenge the ruling by U.S. Bankruptcy Judge Jeffrey Graham of Indianapolis in federal district court, which is usually the first stop for bankruptcy appeals. Instead, Aearo can tell the 7th Circuit directly why it believes that more than 200,000 combat veterans should not be permitted to continue litigating their claims against 3M for selling allegedly defective earplugs in an MDL in Pensacola, Florida.
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The 3rd Circuit, as you probably recall, is weighing a parallel case. That court heard oral arguments last month about whether the bankruptcy of a Johnson & Johnson subsidiary can halt nearly 40,000 claims that J&J’s talc products