Norfolk Southern Agrees to $600M Settlement For Ohio Train Derailment

Norfolk Southern has made headlines today by announcing a $600 million settlement over the train derailment in East Palestine, Ohio. This settlement aims to resolve class action lawsuits that were initiated after the incident, which not only upended lives and businesses but also brought to light serious concerns over environmental and health impacts from the leakage of toxic chemicals like vinyl chloride into the community.

The night East Palestine changed

On February 3, 2023, just before 9 p.m., a Norfolk Southern freight train derailed off Taggart Street in East Palestine, Ohio. This derailment sent over three dozen of the train's 149 cars off the tracks, carrying with them dangerous materials like vinyl chloride and butyl acrylate, known for their severe health risks including respiratory problems and potential to cause cancer with long-term exposure.

Residents within a 1-mile radius of the disaster site were urgently evacuated.. In the days that followed, as a precaution and to mitigate the risk of a larger catastrophe, the rail company conducted a controlled burn of the vinyl chloride, a highly flammable gas.

The fallout from the train derailment quickly materialized into legal action, with class action lawsuits emerging over the financial impact of the evacuation and ongoing health worries. 

Despite reassurances from Norfolk Southern and the Environmental Protection Agency about the water's safety, lingering concerns have led some residents to take extra precautions, such as using air purifiers continuously and relying on bottled water for their daily consumption, as reported by NBC Nightly News.

The road to legal resolution

The $600 million agreed upon by Norfolk Southern is earmarked to address a range of damages inflicted by the derailment. This includes healthcare and medical monitoring for those exposed to toxins, compensation for property damage, and recovery of business interruption losses. The settlement's reach extends to a 20-mile radius from the derailment site, encompassing East Palestine and beyond, while personal injury claims specifically focus on a 10-mile radius.

"The agreement is designed to provide finality and flexibility for settlement class members. 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 news release Tuesday.

"This could include healthcare needs and medical monitoring, property restoration and diminution, and compensation for any net business loss," the company stated. "In addition, individuals within 10-miles of the derailment may, at their discretion, choose to receive additional compensation for any past, current, or future personal injury from the derailment."

Attorneys representing the plaintiffs in the East Palestine derailment case filed a motion Tuesday for judicial approval of the settlement by April 19. The legal team, comprising Seth A. Katz, M. Elizabeth Graham, Jayne Conroy, and T. Michael Morgan, expressed confidence in the proposed settlement.

"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.”

The community responds

In East Palestine, feelings about the $600 million settlement are complicated. While some see it as a necessary step, others, like Krissy Ferguson, find it bitter. Ferguson's raw take: "I just feel like we’ve been victimized over and over and over again. We fought and we’re still fighting. And contamination is still flowing down the creeks. People are still sick. And I think people that had the power to fight took an easy way out,” captures the town's tough battle with ongoing contamination and health issues.

Eric Cozza, who lives a mere three blocks from the derailment site, has been hit hard financially and emotionally. The cost of moving and health care, coupled with the loss of community and family unity–over 45 extended family members lived within a mile–has drained his resources.

Cozza told The Independent, "It’s not nowhere near my needs, let alone what the health effects are going to be five or 10 years down the road," echo a common concern in East Palestine: will this settlement be enough for the long haul?

The economic impact is also clear  with major local employers like Threshold Residential feeling the pinch, losing over $100,000 due to business interruption. It’s a sentiment that reverberates through the town, merging personal loss with economic loss, and leaves the community questioning the future even with the settlement.

Assessing the impact

The $600 million settlement, importantly, does not acknowledge any fault or wrongdoing by Norfolk Southern. This amount is a minor portion of the $3 billion in revenue the company reported in the early part of the year.

Last week, federal officials declared that the train derailment's aftermath doesn't reach the threshold of a public health emergency due to the lack of evidence for widespread health issues or continuous chemical exposure.

Both financial and legal observers, as well as the East Palestine community, stand at a critical juncture. The focus now shifts to the execution of the settlement and whether it will comprehensively address the myriad needs of those affected.