Norfolk Southern Settles Derailment Suit for $600 Million

Norfolk Southern announced on Tuesday that it agreed to pay $600 million to settle a class-action lawsuit stemming from a February 2023 derailment of a train carrying hazardous materials in East Palestine, Ohio.

The settlement, which must be approved by U.S. District Judge Benita Y. Pearson, includes payments to residents and businesses within 20 miles of the derailment. It also resolves personal injury claims within a 10-mile radius of the derailment.

“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,” Norfolk Southern said in a statement. “This could include health care needs and medical monitoring, property restoration and diminution, and compensation for any net business loss.”

The lawyers representing the victims said the settlement was “a fair, reasonable and adequate result for the community on a number of levels,” including the speed in which the resolution was reached and how much money residents and businesses would receive.

Beth Graham, a lawyer at Grant & Eisenhofer who represented the plaintiffs, said her team has received an “overwhelmingly positive” response from East Palestine and its surrounding area. It’s still unclear exactly how many people would be eligible for compensation, but it will likely be tens of thousands, she said.

“The community as a whole has been grateful and relieved that this is the first step in putting this behind them and getting them some sort of compensation,” Ms. Graham said in an interview.

The derailed train was carrying a variety of cargo, including 700,000 pounds of vinyl chloride, a chemical used to make plastics. Fearing an explosion, officials released the contents of the car carrying the chemical and set them ablaze in the town, sending up huge plumes of smoke and alarming residents.

Hundreds of people were evacuated after the derailment. Many remain concerned about contamination and say they do not trust the assurances they have received from Norfolk Southern and state and federal officials that their town and homes are safe.

After the incident, regulators vowed to double down on rail safety and lawmakers promised to pass legislation to prevent similar disasters. But proposals to improve rail safety have been bogged down in Congress and the number of derailments at the five biggest railroads increased last year.

President Biden traveled to East Palestine in February, where some residents, including the town’s mayor, lamented how long it took him to visit.

Attorneys for the plaintiffs said in a court filing that they would seek approval from Judge Pearson no later than April 19. The settlement is in addition to the more than $100 million Norfolk Southern has already paid to the community, including $21 million in direct payments to residents.

The company said that it was not admitting liability or fault. The settlement was reached after “extensive fact discovery, expert development and three days of mediation,” according to a Tuesday court filing by the company and the plaintiff’s lawyers.

Norfolk Southern is still facing a lawsuit filed by the Ohio attorney general, Dave Yost, for the environmental damage that resulted from the derailment. In a February statement, Mr. Yost said he would not settle the suit “without a detailed understanding of what happened, who is responsible, and how we avoid other communities like East Palestine from being victims to this type of incident.”

The National Transportation Safety Board is investigating the accident but has not yet released its final report.