Norfolk Southern agrees to pay $600 million to settle Ohio derailment lawsuit

[April 10, 2024]  By David Shepardson and Clark Mindock
 
WASHINGTON (Reuters) -U.S. railroad operator Norfolk Southern has agreed to pay $600 million to settle a class action lawsuit over a February 2023 East Palestine, Ohio train derailment that spilled toxic chemicals, according to the company and court documents.

General view of the site of the derailment of a train carrying hazardous waste, in East Palestine, Ohio, U.S., March 2, 2023. REUTERS/Alan Freed/File Photo

The agreement in principle, which is still subject to court approval, would cover claims from residents and businesses in the city and impacted surrounding communities.

It will also provide compensation "for past, present and future personal injuries resulting from exposure to the chemicals involved", the lawyers bringing the action against Norfolk Southern said in a joint statement.

The train caught fire and released more than a million gallons of hazardous materials and pollutants, sparking concerns abut U.S. rail safety.

Jayne Conroy, a lead attorney representing the class, said the proposed settlement is "much larger than any derailment settlement in the United States".

The agreement will resolve all class action claims within a 20-mile radius of the derailment and, for those residents who choose to participate, personal injury claims within a 10-mile radius, court documents show.

Conroy estimated there are just under 100,000 class members who will be eligible to receive funds from the settlement, including up to 25,000 residents who live within 10 miles and another roughly 72,000 living within 20 miles of the crash site.

Norfolk Southern is not admitting liability or wrongdoing.

Some details still need to be finalized, including setting an allocation formula and how to efficiently process claims and distribute funds. The lawyers suing Norfolk Southern hope to get initial payments distributed by the end of 2024, they said.

Claims will consider factors including location relative to the derailment, household membership, the length of any displacement, and exposure to contaminants, the lawyers said.

Last year, Norfolk Southern agreed to compensate homeowners around East Palestine, Ohio who have had to sell their properties at a reduced value.

In addition to the class action, Norfolk Southern also faces lawsuits filed by shareholders, the state of Ohio and the U.S. Justice Department.

In May 2023, a U.S. Senate committee approved bipartisan rail safety legislation that tightens rules on trains carrying explosive substances like the Norfolk Southern-operated train, but further action has stalled.

(Reporting by David Shepardson and Clark Mindock in Washington and Abhinav Parmar in Bengaluru; Editing by Sriraj Kalluvila and Jan Harvey)

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