Residents ordered to pay $850,000 bond to appeal Ohio derailment settlement vow not to give up

[January 22, 2025]  By JOSH FUNK

Residents challenging Norfolk Southern's $600 million settlement for the disastrous East Palestinetrain crash have asked a court to reject a judge's order requiring them to put up an $850,000 bond to continue their appeal for higher compensation and more information about the contamination.

Nearly $300 million of the settlement has been on hold because of the appeal even though a judge approved the deal in September. The holdout residents are urging the 6th Circuit Court of Appeals to stop them from having to put up the huge sum to continue with their claims stemming from the February 2023 derailment and fire.

Class-action attorneys who negotiated with Norfolk Southern have said the appeal will add significant administrative costs for the firm disbursing person injury payments to people who lived or worked within 20 miles (32 kilometers) of the derailment site even though $18 million has already been set aside to cover expenses.

The freight train derailment in the Ohio village near the Pennsylvania state line included 11 cars transporting hazardous materials. Area residents evacuated and, days later, officials fearing a possible uncontrolled blast intentionally released and burned toxic vinyl chloride from five rail cars, sending flames and black smoke into the sky.

Attorney David Graham said his clients are pressing ahead with the appeal in the belief that the settlement does not do enough to compensate them for possible future health effects. They worry the contaminants could lead to cancers and other serious ailments in the future, and they want to know what the lawyers uncovered during their investigation so they can better judge the risks.

“We’re not intimidated and we’re not going anywhere,” Graham said.

The federal Environmental Protection Agency has said toxic levels of chemicals haven't been detected in the community since shortly after the derailment, but residents and some of the doctors conducting research on the health effects of the train derailment say they are concerned about the health impacts of prolonged exposure to low levels of chemicals.

Separately, the class action attorneys have refused to disclose what their own testing expert discovered when he visited the community because they agreed to keep that information confidential as part of the settlement.

Even while the appeal continues, the company handling the settlement has begun to distribute $120 million for personal injury claims. Many residents have been waiting months to receive official letters advising the amounts they would receive.

This photo taken with a drone shows portions of a Norfolk Southern freight train that derailed in East Palestine, Ohio, Feb. 4, 2023. (AP Photo/Gene J. Puskar, File)

The class-action lawyers, who received $162 million in fees for their work on the case, promised residents last summer that they would get up to $25,000 per person for personal injuries if they lived within two miles (3 kilometers) of the site. But accepting that money meant that residents were giving up the right to sue later if they do develop health problems.

At the time, dozens of railcars careened off the tracks, spilling their toxic contents and catching fire. The disaster was made worse three days later when officials decided to blow open five tank cars of vinyl chloride and burn their contents, a step investigators later determined was unnecessary.

The main payments of up to $75,000 per household for property damage have been on hold because of the appeal. The amounts people are to receive from the settlement gradually decrease the further they are from the derailment site — down to just a few hundred dollars at the outer edges.

Some residents who have received determination letters about the payments have posted online that they are sometimes thousands less than promised last summer. Others posted that the amounts are exactly as advised.

The class-action attorneys always emphasized the largest possible payments in their meetings in the community, but the official formula dictating how much each person would receive was not available until after the settlement was approved.

The official formula posted online says that to receive a full payment, residents had to have returned to their homes before the evacuation order was lifted on Feb. 8, 2023. If they waited until the next day to return, then they would only be eligible for half the settlement amount they might get otherwise.

Representatives of the Kroll company that is administering the settlement payments didn't respond Tuesday and a representative of the class-action attorneys said they didn't have anyone available to answer questions before Wednesday.

The East Palestine derailment was the worst rail disaster in a decade and prompted calls for reform. A subsequent rail safety bill in Congress stalled and was never approved. The industry promised  some changes like adding more trackside detectors to help spot defects before they can cause derailments, but those haven't yet made a significant difference in railroads' safety records.

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