3M 2007 Annual Report Download - page 81

75
Many of the resolved lawsuits and claims involved unimpaired claimants who were recruited by plaintiffs’ lawyers through
mass chest x-ray screenings. The Company experienced a significant decline in the number of claims filed in 2007 from
prior years by apparently unimpaired claimants. The Company attributes this decline to several factors, including certain
changes enacted in several states in recent years of the law governing asbestos-related claims, and the highly-publicized
decision in mid-2005 of the United States District Court for the Southern District of Texas that identified and criticized
abuses by certain attorneys, doctors and x-ray screening companies on behalf of claimants. The Company expects the
filing of claims by unimpaired claimants in the future to continue at much lower levels than in the past. The Company
believes that due to this change in the type and volume of incoming claims, it is likely that the number of claims alleging
more serious injuries, including mesothelioma and other malignancies, while remaining relatively constant, will represent
a greater percentage of total claims than in the past. The Company has demonstrated in past trial proceedings that its
respiratory protection products are effective as claimed when used in the intended manner and in the intended
circumstances. Consequently the Company believes that claimants are unable to establish that their medical conditions,
even if significant, are attributable to the Company’s respiratory protection products. Nonetheless the Company’s
litigation experience indicates that such claims are costlier to resolve than the claims of unimpaired persons, and it
therefore anticipates an increase in the average cost of resolving pending and future claims on a per-claim basis than it
experienced in prior periods when the vast majority of claims were asserted by the unimpaired.
Plaintiffs have asserted specific dollar claims for damages in approximately 66% of the 3,979 lawsuits that were pending
against the Company at the end of 2007 in all jurisdictions. A majority of states restrict or prohibit specifying damages in
tort cases such as these, and most of the remaining jurisdictions do not require such specification. In those cases in
which plaintiffs choose to assert specific dollar amounts in their complaints, brought in states that permit such pleading,
the amounts claimed are typically not meaningful as an indicator of the Company’s potential liability. This is because (a)
the amounts claimed typically bear no relation to the extent of the plaintiff’s injury, if any; (b) the complaints nearly always
assert claims against multiple defendants with the typical complaint asserting claims against as few as a dozen different
defendants to upwards of 275 different defendants, the damages alleged are not attributed to individual defendants, and
a defendant’s share of liability may turn on the law of joint and several liability, which can vary by state, and by the
amount of fault a jury allocates to each defendant if a case is ultimately tried before a jury; (c) many cases are filed
against the Company even though the plaintiffs did not use any of the Company’s products and, ultimately, are withdrawn
or dismissed without any payment; and (d) many cases are brought on behalf of plaintiffs who have not suffered any
medical injury, and, ultimately, are resolved without any payment or a payment that is a small fraction of the damages
initially claimed. Of the 2,629 pending cases in which purported damage amounts are specified in the complaints, 860
cases involve claims of $100,000 or less, (one (1) of them also alleges punitive damages of $15,000, nine (9) of them
also allege punitive damages of $30,000, and three (3) of them also allege punitive damages of $1,000,000); 186 cases
involve claims between $100,000 and $3 million (thirty-three (33) of them also allege punitive damages of $250,000, one
(1) of them also alleges punitive damages of $1 million, forty-three (43) of them also allege punitive damages of $1.5
million, and 106 of them also allege punitive damages of $2 million); two (2) cases involve claims of $3 million to $7.5
million (one (1) also alleges punitive damages of $350,000 and one (1) of them also alleges punitive damages of $5
million); 21 cases involve claims of $7.5 million; four (4) cases involve claims of $7.5 million to $10 million (four (4) of
them also allege damages of $21 million); 1,540 cases involve claims of $10 million (two (2) of them also allege punitive
damages of $350,000, 1,531 of them also allege punitive damages of $10 million, and one (1) of them also alleges
punitive damages of $15 million); 13 cases involve claims of $10 million to $50 million (one (1) of them also allege
punitive damages of $15 million, five (5) of them also allege punitive damages of $15.5 million, and three (3) of them also
allege punitive damages of $20 million); and three (3) cases involve claims of $50 million (two (2) of them also alleges
punitive damages of $50 million). Some complaints allege that the compensatory and punitive damages are at least the
amounts specified. As stated, the Company's experience and the other reasons cited indicate that the damage amounts
specified in complaints are not a meaningful factor in any assessment of the Company’s potential liability.
As previously reported, the State of West Virginia, through its Attorney General, filed a complaint in 2003 against the
Company and two other manufacturers of respiratory protection products in the Circuit Court of Lincoln County, West
Virginia and amended it in 2005. The amended complaint seeks substantial, but unspecified, compensatory damages
primarily for reimbursement of the costs allegedly incurred by the State for worker’s compensation and healthcare
benefits provided to all workers with occupational pneumoconiosis and unspecified punitive damages.
Employment Litigation
As previously reported, one current and one former employee of the Company filed a purported class action in the District
Court of Ramsey County, Minnesota, in December 2004, seeking to represent a class of all current and certain former
salaried employees employed by 3M in Minnesota below a certain salary grade who were age 46 or older at any time
during the applicable period to be determined by the Court. The complaint alleges the plaintiffs suffered various forms of
employment discrimination on the basis of age in violation of the Minnesota Human Rights Act and seeks injunctive relief,
unspecified compensatory damages (which they seek to treble under the statute), including back and front pay, punitive
damages (limited by statute to $8,500 per claimant) and attorneys’ fees. In January 2006, the plaintiffs filed a motion to
join four additional named plaintiffs. This motion was unopposed by the Company and the four plaintiffs were joined in the
case, although one claim has been dismissed following an individual settlement. The class certification hearing was held
in December 2007. The Company expects a ruling on the class certification in the first half of 2008.