3M Company

Case Details

Class Period:
February 9, 2017 – May 28, 2019
Date Filed:
July 29, 2019
Case Number:
New Jersey District Court

Case Summary

The complaint charges 3M and certain of its officers and directors with violations of the Securities Exchange Act of 1934. 3M is an American multinational conglomerate corporation that produces a variety of chemical substances and related products. The complaint alleges that during the Class Period, defendants made materially false and misleading statements and/or failed to disclose adverse information regarding 3M's business and operations. Specifically, defendants failed to disclose the extent of the Company's exposure to legal liability associated with 3M's most lucrative product offerings: man-made chemicals known as per- and polyfluoroalkyl substances ("PFAS"). While publicly denying that PFAS cause harm to humans and the environment, defendants concealed and misrepresented: (i) 3M's vast internal evidence dating back decades confirming that PFAS are toxic (which was first publicly revealed in February 2018 by Minnesota's Attorney General); (ii) 3M's decades-long history of suppressing negative information and/or damaging data about PFAS; and (iii) 3M's legal exposure to state, county, and local governments and individuals around the country as a result of its knowledge and intentional concealment of the toxic harm caused by the use of PFAS. These omissions and misrepresentations caused 3M's stock price to trade at artificially inflated prices of as high as $258 per share during the Class Period. On April 25, 2019, 3M announced its first quarter 2019 financial results, acknowledging that the first quarter of 2019 "was a disappointing start to the year for 3M" and disclosing that on top of the "$1.16 per share impact" already recorded in the first quarter of 2018 related to the settlement of a lawsuit brought by the State of Minnesota, 3M had "recorded significant litigation-related pre-tax charges of $548 million, or $0.72 per share" in the first quarter 2019 for additional PFAS liability. 3M also announced that it was cutting 2,000 jobs and trimming fiscal year 2019 capital expenditures, including on manufacturing, in addition to accelerating other cost control reductions it said were already underway. On this news, the price of 3M common stock declined nearly 13%. Then on May 29, 2019, New Hampshire filed two lawsuits against 3M and others for PFAS contamination. New Hampshire's Attorney General said the goal was to recoup damages for the PFAS contamination that had been found in all ten New Hampshire counties, noting that, in towns like Merrimack and Portsmouth, the contamination had put hundreds of families on bottled water. On this news, the price of 3M common stock declined from its close of $163.35 per share on May 28, 2019 to trade as low as $160.50 per share in intraday trading and close at $161.40 per share on May 29, 2019.

Action Details

View Complaint (pdf)

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