Norfolk Southern Corporation (NSC) has announced a tentative settlement of $600 million in a class-action lawsuit resulting from the February 2023 freight train derailment in East Palestine, Ohio. The settlement was described as aimed at providing “finality and flexibility for the class members”, allowing them the freedom to utilise their compensation to deal with potential adverse effects from the derailment.
The corporation highlighted its other “contributions” towards rectifying the situation in East Palestine, comprising of community assistance, improvements to drinking water infrastructure, community-directed projects, along with a grant for economic development. The company heralded the settlement as “another promise kept by [NSC] to make it right for the people of East Palestine and the surrounding communities”, while emphasizing that the agreement “does not include or constitute any admission of liability, wrongdoing, or fault.”
In conjunction with the announcement of the settlement, NSC also released its preliminary first-quarter results. The impact of the significant $600 million settlement, which led to an overall uptick in the company’s operating expenses and operating ratio, was accounted for in this financial report.
The freight train derailment which is central to this lawsuit took place on February 3, 2023. A multitude of complaints were filed in its aftermath, primarily from individuals and businesses adversely affected by the incident. US District Judge Benita Y. Pearson consolidated 31 of these suits in April 2023.
This settlement updates an ongoing legal journey for NSC that includes suits filed not just by those directly affected, but also by Ohio Attorney General Dave Yost and the US Department of Justice (DOJ). Both sued NSC over the derailment, with Yost seeking injunctive relief, civil penalties, redress for “damages to [Ohio’s] natural resources,” a declaratory judgment, and reimbursement of state EPA response costs, while the DOJ sought relief under the Clean Water Act.
Days after the derailment, chemicals from the incident were found in waterways adjacent to the Ohio River, as reported by the Ohio Department of Natural Resources (ODNR). As a direct result, the US Environmental Protection Agency (EPA) ordered NSC to manage and finance cleanup operations ensuing from the incident.
For the $600M settlement to be finalized, approval from the US District Court for the Northern District of Ohio will be required. If approved, the settlement would “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.”