Norfolk Southern reaches $600 million settlement to settle East Palestine derailment suit

Originally Published: 09 APR 24 08:18 ET

Updated: 09 APR 24 10:18 ET

By David Goldman, CNN

New York (CNN) — Norfolk Southern has reached a $600 million settlement that, if approved by a court, will resolve all lawsuits covering thousands of residents within 20 miles of the 2023 East Palestine, Ohio, derailment that spilled more than a million pounds of hazardous chemicals into the soil, water and air.

The rail company said the settlement is intended to offset costs related to the spill that sent a plume of toxic smoke into the air and displaced many residents and businesses. But Norfolk Southern didn’t admit to any liability or wrongdoing as a result of the settlement.

“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,” the company said in a statement. “This could include healthcare needs and medical monitoring, property restoration and diminution, and compensation for any net business loss.”

The settlement of the class-action lawsuit, which subsumed 31 separate cases, also allows residents within 10 miles of the derailment to receive additional compensation.

In a court filing Tuesday, the plaintiffs said they expected to file a motion for the judge to approve the settlement within 10 days. Attorneys representing the claimants said they hope to make the claims process easy and efficient and to begin sending out payments by the end of 2024.

“We believe this is a fair, reasonable and adequate result for the community on a number of levels, not the least of which is the speed of the resolution, and the overall amount of the awards residents can expect, which will be significant for those most impacted by the derailment,” said Seth Katz of Burg Simpson Eldredge Hersh & Jardine, M. Elizabeth Graham of Grant & Eisenhofer, Jayne Conroy of Simmons Hanly Conroy and T. Michael Morgan of Morgan & Morgan, in a combined statement.

Following the February 3, 2023, Norfolk Southern freight train derailment, residents were ordered to evacuate temporarily. State and federal environmental officials say testing shows the air and water in the town is now safe, but some residents still complain of health problems, including burning sensations in their eyes, tingling in their lips, heaviness in their chest and swelling of lymph nodes in their necks and groins.

Since then, the company says it has spent $104 million in community assistance to East Palestine and the surrounding areas, $4.3 million to upgrade the area’s drinking water infrastructure and $500,000 for economic development, among other contributions. East Palestine has a population of 5,000.

But several class-action lawsuits say the company hasn’t done enough to remediate the toxic chemicals released into the area. They also blamed Norfolk Southern for negligence.

The EPA’s latest update on the aftermath of the derailment notes that among several changes in the region’s environment, “deceased fish were observed by response staff in a sulfur run during routine stream monitoring” on April 5. The investigation determined that the fish were killed when swimming through pumps that are diverting water out of the sulfur run, and the EPA required Norfolk Southern to remediate the stream and determine a better plan.

Among the questionable decisions the company made was a massive, controlled burn that released toxic chemicals into the air three days after the derailment. The rail company said there was an imminent risk of an uncontrolled explosion if the chemicals were not released and burned off. The officials on the ground who authorized the controlled burn were told they had only minutes to make the decision before an explosion.

But the chair of the National Transportation Safety Board testified last month at a Senate hearing that the controlled burn was unnecessary.

Shares of Norfolk Southern (NSC) fell 1.5%.

This story has been updated with additional context and developments.

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