Norfolk Southern agrees to pay $600m for Ohio toxic train derailment
Norfolk Southern has agreed to pay $600m in a class-action lawsuit settlement related to a fiery train derailment in February 2023 in eastern Ohio.
The company said the agreement, if approved by the court, will resolve all class action claims within a 20-mile radius from the derailment and, for those residents who choose to participate, personal injury claims within a 10-mile radius from the derailment.
About 50 cars of the freight train – which had roughly 150 cars and three locomotives – derailed on the outskirts of East Palestine, near the Pennsylvania state line, with some cars transporting hazardous materials. An evacuation covered 1,500 to 2,000 of the town’s approximately 4,800 to 4,900 residents.
Norfolk Southern said on Tuesday that individuals and businesses will be able to use compensation from the settlement in any manner they see fit to address potential adverse impacts from the derailment, which could include healthcare needs, property restoration and compensation for any net business loss. Individuals within 10 mile of the derailment may, at their discretion, choose to receive additional compensation for any past, current, or future personal injury from the derailment.
The company said that the settlement does not include or constitute any admission of liability, wrongdoing, or fault.
The settlement is expected to be submitted for preliminary approval to the US district court for the northern district of Ohio later in April 2024. Payments to class members under the settlement could begin by the end of the year, subject to final court approval.
Norfolk Southern has already spent more than $1.1bn on its response to the derailment, including more than $104m in direct aid to East Palestine and its residents. Partly because Norfolk Southern is paying for the cleanup, Joe Biden has never declared a disaster in East Palestine, which is a sore point for many residents. The railroad has promised to create a fund to help pay for the long-term health needs of the community, but that has not happened yet.
The plaintiffs’ attorneys said the deal is the result of a year of intense investigation of the derailment, and should provide meaningful relief to residents.
“This resolution comes shortly after the one-year anniversary of the disaster and will provide substantial compensation to all affected residents, property owners, employees and businesses residing, owning or otherwise having a legal interest in property, working, owning or operating a business for damages resulting from the derailment and release of chemicals,” said Seth A Katz of Burg Simpson Eldredge Hersh & Jardine, PC.
Last week federal officials said that the aftermath of the train derailment did not qualify as a public health emergency because widespread health problems and ongoing chemical exposures have not been documented.
The Environmental Protection Agency (EPA) never approved that designation after the February 2023
Norfolk Southern derailment even though the disaster forced the evacuation of half the town of East Palestine and generated many fears about potential long-term health consequences of the chemicals that spilled and burned. The contamination concerns were exacerbated by the decision to blow open five tank cars filled with vinyl chloride and burn that toxic chemical three days after the derailment.
The head of the National Transportation Safety Board (NTSB) said recently that her agency’s investigation showed that the vent and burn of the vinyl chloride was unnecessary because the company that produced the chemical was sure no dangerous chemical reaction was happening inside the tank cars. But the officials who made the decision have said they were never told that.
The NTSB’s full investigation into the cause of the derailment will not be complete until June, though that agency has said that an overheating wheel bearing on one of the railcars that was not detected in time by a trackside sensor probably caused the crash.
The EPA has said the cleanup in East Palestine is expected to be complete sometime later this year.
Shares of Norfolk Southern Corp, based in Atlanta, fell about 1.3% before the opening bell on Tuesday.