Norfolk Southern to pay $600 million in settlement for eastern Ohio train derailment incident

Norfolk Southern has reached a settlement agreement to pay $600 million in a class-action lawsuit related to a fiery train derailment that occurred in February 2023 in eastern Ohio. The agreement, pending court approval, will cover all class action claims within a 20-mile radius of the derailment and personal injury claims within a 10-mile radius for those residents who opt to participate.

Individuals and businesses affected by the derailment will have the flexibility to utilize the compensation from the settlement for various purposes such as addressing healthcare needs, property restoration, and any net business loss suffered. Residents within a 10-mile radius of the incident also have the option to receive additional compensation for past, current, or future personal injuries resulting from the derailment.

Notably, Norfolk Southern clarified that the settlement does not imply any admission of liability, misconduct, or fault on their part. The proposed settlement is anticipated to be presented for initial approval to the U.S. District Court for the Northern District of Ohio in April 2024, with payments to class members potentially commencing by the end of the year upon final court endorsement.

Having already allocated over $1.1 billion towards response efforts following the derailment, including $104 million in aid to East Palestine and its residents, Norfolk Southern’s commitment to addressing the aftermath remains steadfast. However, the absence of a disaster declaration by President Joe Biden for East Palestine, an issue of contention among residents, points to ongoing concerns within the community. The railroad pledged to establish a fund for the community’s long-term health needs, although this initiative is yet to be realized.

Despite concerns raised post-derailment, federal officials did not categorize the incident as a public health emergency, citing the lack of documented widespread health issues or sustained chemical exposures. The EPA refrained from granting such a designation even after the evacuation of half of East Palestine following the derailment, which prompted worries about potential health implications from the spilled and burned chemicals, notably vinyl chloride.

In a recent statement, the National Transportation Safety Board indicated that its investigation traced the derailment’s likely cause to an overheating wheel bearing on a railcar, a detail that a trackside sensor failed to detect in time. The decision to vent and burn the vinyl chloride, later deemed unnecessary, raised further questions about communication breakdowns regarding the chemical’s safety.

While the NTSB’s comprehensive investigation is slated for completion in June, the EPA expects the cleanup in East Palestine to conclude later this year. Meanwhile, shares of Norfolk Southern Corp. experienced a 1% decline before trading began on Tuesday, noting ongoing repercussions from the derailment incident.