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Norfolk Southern to pay $600 million in Ohio derailment

By MAY ZHOU in Houston | | Updated: 2024-04-10 11:13
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Smoke rises from a derailed cargo train in East Palestine, Ohio, on February 4, 2023. [Photo/Agencies]

Railroad company Norfolk Southern agreed to pay $600 million to settle lawsuits related to a fiery train derailment with toxic materials in February 2023 in eastern Ohio.

If approved by in the US District Court in Ohio, the settlement would cover lawsuits within 20 miles of the derailment, which released toxic smokes into the air and forced many residents and business to leave the area. The settlement also will cover personal injury claims within a 10-mile radius of the derailment.

Norfolk Southern said the settlement doesn't mean an admission of liability, wrongdoing or fault.

"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," the company said in a statement Tuesday. "This could include healthcare needs and medical monitoring, property restoration and diminution, and compensation for any net business loss."

The 2023 derailment of cars containing hazardous materials occurred outside East Palestine, Ohio. It sent fumes and chemicals into the air, which led to roughly 2,000 out of 4,700 local residents to evacuate temporarily.

Some businesses were closed, and residents with homes close to the derailment site and nearby creeks said they were still exposed to chemicals after they returned.

They complained of health problems from the exposure, including burning sensations in their eyes, tingling in their lips, heaviness in their chest and swelling of lymph nodes in their necks and groins, according to CNN.

Since the derailment, Norfolk Southern said in its statement that it has spent $104 million in community assistance to East Palestine and the surrounding areas, including $21 million in direct payments to residents. Another $4.3 million was spent to upgrade the area's drinking water infrastructure, $2 million for community-directed projects, and $500,000 for economic development.

The company estimated in January that the total cost related to the derailment would top $1.1 billion and will continue to grow because of continuing cleanup work and lawsuits. Norfolk Southern's profit for the last quarter of 2023 had fallen 33 percent.

In a court filing Tuesday, the plaintiffs said they expected to file a motion for the judge to approve the settlement within 10 days. Attorneys representing the claimants said they hope to make the claims process easy and efficient and to begin sending out payments by the end of 2024.

"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," representatives from four different law firms said in a joint statement.

The National Transportation Safety Board hasn't finished investigating the accident, but its preliminary report said that a wheel bearing in the final stage of overheat was observed from a surveillance video from a local residence.

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