NS Settles East Palestine Class Action (UPDATED, 5/23)

“The final truckload of impacted soil has been removed from the derailment zone and transported offsite, which will substantially reduce heavy truck traffic on East Taggart Street and throughout the village. The next phase of site remediation will include backfilling excavated areas and continued assessment of soil and creek sheens and sediments. All site work has been, and will continue to be, supervised and approved by the US and Ohio Environmental Protection Agencies and Unified Command.” Norfolk Southern photo.

A federal judge has signed off on the $600 million class action settlement over Norfolk Southern’s (NS) Feb. 3, 2023 East Palestine derailment, according to an Associated Press (AP) report.

Preliminary approval for the settlement came late on May 21, so now lawyers involved in the case will “return to the community to answer more questions about the deal Atlanta-based NS agreed to this spring,” according to the report.

“Our pitch to the community is please give us time to explain why we think this is fair,” said Mike Morgan, one of the lead attorneys for the plaintiffs.

According to the AP report, Morgan said the settlement will “resolve claims against the railroad and other defendants in the lawsuit, such as the railcar owners and chemical manufacturer that made the vinyl chloride released and burned after the derailment.”

On April 9, 2024, NS announced reaching a $600 million “agreement in principle,” subject to court approval, to resolve the consolidated class action lawsuit resulting from the derailment. The agreement will resolve all class action claims within a 20-mile radius from the derailment and, for residents who choose to participate, personal injury claims within a 10-mile radius from the derailment.

NS said the agreement, whose financial impact was included in the railroad’s 1Q24 results (preliminary numbers released simultaneously) “does not include or constitute any admission of liability, wrongdoing, or fault. It was reached through extensive negotiations with court-appointed class counsel and with the expert assistance of former federal district judge Layn Phillips, a nationally renowned neutral mediator.”

The agreement was submitted for preliminary approval to the U.S. District Court for the Northern District of Ohio in late April. “Subject to final court approval, payments to class members under the settlement could begin by the end of this year,” NS noted. “Actual allocations and payments to households, businesses and individuals will be determined by court-appointed class counsel. Class members will soon receive additional details about the settlement, including the contact information for a Settlement Administrator to whom they can direct any questions and information regarding a Claims Assistance Center in East Palestine.”

The agreement, NS added, “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. This could include healthcare needs and medical monitoring, property restoration and diminution, and compensation for any net business loss. 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.”

“This settlement furthers the work Norfolk Southern has done to make it right in East Palestine and the surrounding communities” the company said. It is “another promise kept by Norfolk Southern to make it right for the people of East Palestine and the surrounding communities.”

In March 2023, NS said, it “made commitments to address three long-term concerns of residents: drinking water, home values, and healthcare. Already, the company has announced programs for drinking water and home value assurance. The company is going further through this comprehensive settlement—providing additional, significant monetary relief to individuals, including for healthcare, and to help qualifying local businesses continue to rebuild and grow.”

NS pointed to its contributions since the derailment:

• $104 million in community assistance to East Palestine and the surrounding areas in Ohio and Pennsylvania, including $25 million for a regional safety training center, $25 million in planned improvements to East Palestine’s city park, $21 million in direct payments to residents, and $9 million to local first responders.
• $4.3 million to support upgrades to drinking water infrastructure.
• $2 million for community-directed projects.
• $500,000 grant for economic development.
• Ongoing support to the community through the Family Assistance Center and programs such as the Interim Value Assurance Program.