Norfolk Southern has agreed to pay $600 million in a class-action lawsuit settlement related to a fiery train derailment in February 2023 in eastern Ohio.
The company said Tuesday that the agreement, if approved by the court, will resolve all class action claims within a 20-mile radius from the derailment and, for those residents who choose to participate, personal injury claims within a 10-mile radius from the derailment.
Norfolk Southern added that 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, which could include healthcare needs, property restoration and compensation for any net business loss. 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.
The company said that the settlement doesn't include or constitute any admission of liability, wrongdoing, or fault.
East Palestine homeowner Christina Dilworth returned home in January after living in a hotel for eight months following the derailment.
She says the settlement announcement is bittersweet.
“i wasn’t expecting it this quick but I’m optimistic," Dilworth said.
Attorney Jayne Conroy says there are roughly 100,000 people in the class action lawsuit.
“It's with mixed emotions that we deal with these things we are thrilled to be able to start to work through and get the residents compensated. But this never should have happened," Conroy said.
Conroy says the money will help families who lost property values, compensate businesses for losses in 2023, medical costs and future checkups.
"It’s going to depend exactly on the issues they’ve been dealing with," Conroy said.
Professor Andrew Pollis with Case Western Reserve University says that typically, the dollar amount will go down if the number of people opting out of the class action goes up.
“Anybody who’s dissatisfied with what they anticipate their level of recovery will be out of this pot of money can say no thank you and proceed to file a separate lawsuit on their own," Pollis said.
Anna Doss owns the Marathon gas station near the tracks in Downtown East Palestine. She says her business took a hit last year.
“I’m thrilled to death because I’m really struggling to keep inventory and product on my shelves," Doss said.
She's now hoping to make some repairs and clean up the exterior.
Dilworth just wants all of her grandchildren to visit. She says the settlement money would help her sell and relocate.
“It’s kind of lonely here without the kids coming so if I can move to a place where they would visit yeah that would help me," Dilworth said.
The settlement is expected to be submitted for preliminary approval to the U.S. District Court for the Northern District of Ohio later in April 2024. Payments to class members under the settlement could begin by the end of the year, subject to final court approval.
Norfolk Southern has already spent more than $1.1 billion on its response to the derailment, including more than $104 million in direct aid to East Palestine and its residents. Partly because Norfolk Southern is paying for the cleanup, President Joe Biden has never declared a disaster in East Palestine, which is a sore point for many residents. The railroad has promised to create a fund to help pay for the long-term health needs of the community, but that hasn’t happened yet.
Last week, federal officials said that the aftermath of the train derailment doesn't qualify as a public health emergency because widespread health problems and ongoing chemical exposures haven't been documented.
The Environmental Protection Agency never approved that designation after the February 2023 Norfolk Southern derailment, even though the disaster forced the evacuation of half the town of East Palestine and generated many fears about potential long-term health consequences of the chemicals that spilled and burned.
The contamination concerns were exacerbated by the decision to blow open five tank cars filled with vinyl chloride and burn that toxic chemical three days after the derailment.
The head of the National Transportation Safety Board said recently that her agency's investigation showed that the vent and burn of the vinyl chloride was unnecessary because the company that produced that chemical was sure no dangerous chemical reaction was happening inside the tank cars. But the officials who made the decision have said they were never told that.
The NTSB's full investigation into the cause of the derailment won't be complete until June, though that agency has said that an overheating wheel bearing on one of the railcars that wasn't detected in time by a trackside sensor likely caused the crash.
The EPA has said the cleanup in East Palestine is expected to be complete sometime later this year.
Shares of Norfolk Southern Corp., based in Atlanta, fell about 1% before the opening bell Tuesday.
