Norfolk Southern reaches $600 million settlement in East Palestine train derailment lawsuit

Norfolk Southern announced Tuesday that it had agreed to a $600 million settlement to resolve a string of lawsuits the railroad faced after last year’s train derailment in East Palestine, Ohio, a resolution that lawyers say could help thousands of affected residents.

The settlement will resolve all class-action claims by people and businesses who were within a 20-mile radius of the derailment site and personal injury claims within 10 miles, according to a court document summarizing the deal. The deal was reached after three days of mediation overseen by a former federal judge.

“More than a year after the derailment in East Palestine, Norfolk Southern has agreed to compensate the residents and businesses affected by the incident,” said Jayne Conroy, one of the lead attorneys for the people who sued. “The derailment and subsequent fire never should have happened, but the upcoming months will bring financial compensation to those impacted.”

Conroy said her team’s research indicates the final settlement is significantly larger than any previously reached for a derailment.

The Feb. 3, 2023, derailment upended life in the small town and surrounding communities. Thirty-eight rail cars came off the tracks, including 11 carrying hazardous materials. Emergency crews decided to burn several cars carrying dangerous vinyl chloride, sending a plume of thick black smoke billowing above the region and leaving residents worried about long-term health effects from chemical exposure.

“This is another promise kept by Norfolk Southern to make it right for the people of East Palestine and the surrounding communities,” the railroad said in a statement. The company said the settlement did not amount to an admission of wrongdoing.

A federal judge in Ohio consolidated 31 lawsuits over the incident into a single case last year. Residents alleged that they had suffered health and financial harms as a result of the derailment, and a complaint alleged that Norfolk Southern’s negligence led to the incident.

The settlement requires approval by a judge, but Norfolk Southern said payouts could begin by the end of the year. The railroad said covered residents and businesses will be able to use their share of the settlement funds however they see fit to address the impacts of the derailment.

Conroy said it won’t be known exactly how many people will benefit from the settlement until a process of allocating funds has taken place, but said she expects it will be “many thousands.” She said individuals will have a chance to present information about their own harms to the legal team to claim a share of the money.

Conroy said the final agreement was the product of “hard fought” negotiations with the railroad.

“While we’re pleased that this has occurred a little more than a year after the derailment occurred, it felt slow to us,” she said.

Norfolk Southern had previously agreed to $104 million in aid to the community. The $600 million settlement will be in addition to that sum.

The National Transportation Safety Board is in the final stages of its investigation into the derailment, which put renewed attention on the safety of freight railroads and the hazardous loads they carry. Investigators found that a bearing on one of the train’s wheels had overheated, causing it to come off the tracks. A trackside detector caught the problem, but the warning came too late for the train’s crew to stop safely.

Lawmakers in Washington vowed to pass stricter railroad safety standards following the derailment, including rules for the detectors and stiffer penalties for violations of federal regulations. But those efforts have stalled in the face of lobbying by the railroad industry.

Last week, the Federal Railroad Administration issued a new rule generally requiring a minimum crew of two on freight trains, a measure that officials said would boost safety.