3M 2008 Annual Report Download - page 91

85
aspects of the Plan, and the Company to issue a press release to the same effect, and to pay up to $600,000 in
attorney’s fees to the plaintiff’s counsel. On December 30, 2008, the Court issued an order preliminarily approving
the settlement agreement. As a result, the Company will notify all stockholders of the proposed settlement and its
terms and their right to object to the terms of the settlement. The Court also scheduled a final hearing for May 21,
2009 for the purpose of finally determining whether the proposed settlement agreement is fair, reasonable and
adequate. The settlement will be consummated after a final order approving the settlement.
French Competition Council Investigation
On December 4, 2008, the Company’s subsidiary in France received a Statement of Objections from the French
Competition Council alleging an abuse of a dominant position regarding the supply of retro-reflective films for vertical
signing applications in France and of participation in a concerted practice with the major French manufacturers of
vertical signs. The Statement of Objections is an intermediate stage in the proceedings and no final determination
regarding an infringement of French competition rules has been made. 3M will file a response in due course denying
that the Statement of Objections states any valid claim against 3M. It is difficult to predict the final outcome of the
investigation at this time.
Breast Implant Litigation
The Company and certain other companies were named as defendants in past years in numerous claims and
lawsuits alleging damages for personal injuries of various types resulting from breast implants formerly manufactured
by the Company or a related company. The vast majority of claims against the Company have been resolved. The
Company does not consider its remaining probable liability to be material. Information concerning the associated
insurance receivable and legal proceedings related to it follows in the paragraph entitled Breast Implant Liabilities
and Insurance Receivables.
Respirator Mask/Asbestos Litigation
For more than 25 years the Company has defended and resolved the claims of hundreds of thousands of individual
claimants alleging injuries from occupational dust exposures. As of December 31, 2008, the Company is a named
defendant, with multiple co-defendants, in numerous lawsuits in various courts that purport to represent
approximately 2,700 individual claimants, a decrease from the approximately 8,750 individual claimants with actions
pending at December 31, 2007.
The vast majority of the lawsuits and claims resolved by and currently pending against the Company allege use of
some of the Company’s mask and respirator products and seek damages from the Company and other defendants
for alleged personal injury from workplace exposures to asbestos, silica, coal or other occupational dusts found in
products manufactured by other defendants or generally in the workplace. A minority of claimants generally allege
personal injury from occupational exposure to asbestos from products previously manufactured by the Company,
which are often unspecified, as well as products manufactured by other defendants, or occasionally at Company
premises.
In many of these lawsuits and claims, the Company is named as a defendant with multiple co-defendants where no
product the Company manufactured is identified or where the Company is ultimately determined not to have
manufactured the products identified by the plaintiffs. The Company’s vigorous defense of this litigation has resulted
in dismissals of many claims without any payment by the Company, and jury verdicts for the Company in seven of
the eight cases tried to verdict (such trials occurred in 1999, 2000, 2003, 2004 and 2007), and an appellate reversal
in 2005 of the one jury verdict adverse to the Company.
Since approximately 2006, the Company has experienced a significant decline in the number of new claims filed
annually 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 primarily
unimpaired claimants, many of whom were recruited by plaintiffs’ lawyers through mass chest x-ray screenings. 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 claims of persons with malignant
conditions are costlier to resolve than the claims of unimpaired persons, and it therefore anticipates an increase in