Norfolk Southern settles East Palestine lawsuit: What to know

EAST PALESTINE ‒ Norfolk Southern has agreed to settle a class-action lawsuit over the Feb. 3, 2023, train derailment for $600 million. The lead attorneys representing the victims said the settlement would be the largest in U.S. railroad history.

The multimillion-dollar deal needs final approval from U.S. District Court Judge Benita Pearson in Youngstown.

The victims' attorneys - Seth A. Katz of Burg Simpson Eldredge Hersh & Jardine; M. Elizabeth Graham of Grant & Eisenhofer; Jayne Conroy of Simmons Hanly Conroy; and T. Michael Morgan of Morgan & Morgan - met with reporters via Zoom on Wednesday to answer questions about the settlement.

The settlement was reached Saturday and made public on Tuesday.

"We think this is an outstanding result," Graham said.

It will take a while for residents and businesses to get money

The attorneys said it will take several months to finalize the settlement and determine an allocation formula for the money. The settlement would cover all residents − as well as businesses that can prove loss − affected by the derailment within a 20-mile radius.

More: 'East Palestine' is a byword now. It didn't have to be that way

Graham said several factors, including distance to derailment and toxic burn, would determine how much an individual or business could receive in the settlement.

"Those near ground zero will receive more than folks who live 20 miles away. That's how the allocation will be designed," she told reporters.

By year's end, Katz said they are hoping the first checks from the settlement can be issued.

Residents, businesses expected to get plenty of notification on settlement information

Before checks, the attorneys said they are planning to make sure all residents and businesses in or around East Palestine are notified of the settlement and eligibility requirements with letters and town hall sessions over the next couple months.

Katz said they will start the information process after Pearson grants preliminary approval for the settlement, which could happen later this month. Conroy said the information part of this process will take months before final approval is possible.

Katz said this settlement does not resolve other lawsuits filed by the state and federal governments against Norfolk Southern. Those lawsuits to recoup clean-up costs and other expenses remain unsettled.

"The $600 million is not going toward clean up. That is a separate issue," Graham added.

Part of the settlement is "opt in" and frees Norfolk Southern from future claims

The attorneys said the settlement will allow residents and businesses to "opt in" and file a personal injury claim for money. However, the claim would release Norfolk Southern from future litigation by the person or business due to the 2023 disaster.

In other words, if a person files a claim, they could not sue Norfolk again if new health issues arise from the derailment or toxic burn.

"Each person can think about their individualized risk and what they want to pursue," Morgan said, "and if they choose not to opt in, then those rights stay. It's a personalized decision, and the community will have to make that decision."

Katz: Clients are "very happy with the outcome"

The attorneys were asked by reporters what their clients − class representatives in the case − thought about the settlement amount. The attorneys said the clients were kept updated and consulted.

"We thank them for the effort that they put in on behalf of themselves and the members of their own community," Katz said. "They are all very happy with the outcome."

A client, Anna Doss, longtime owner of a gas station and liquor store in East Palestine, called the settlement "a step in the right direction." She said she lost a "quarter of her sales" at the gas station because the train crash closed a major access road to her business for 10 months.

"We're still losing. The bounce back has not occured," Doss said in a phone interview. "They just opened that road."

A reporter told Katz that he spoke with East Palestine residents who were not thrilled with the results, saying they didn't think it was enough.

"We understand that perspective," Katz said. "We asked them to be patient and work through the process with us and learn more before casting a final judgment of whether or not this is the right settlement."

Graham said the negotiations with Norfolk Southern are confidential, but she said the settlement was reached through mediation with retired Judge Layn R. Phillips. She said Norfolk Southern offered less; the plaintiffs' attorneys sought more than $600 million.

The settlement, Doss said, "will never compensate for the losses we've incurred with the time and trauma, but there's no more denying it by the railroad company."

Norfolk Southern: "The company made a commitment"

Norfolk Southern declined to comment for this story Wednesday.

However, the Atlanta-based company issued a statement on Tuesday after the settlement was announced. It described the deal as "another promise kept by Norfolk Southern" for the East Palestine community.

"In March 2023, the company made commitments to address three long-term concerns of residents: drinking water, home values, and health care. 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 health care, and to help qualifying local businesses continue to rebuild and grow."

Reach Benjamin Duer at 330-580-8567 or ben.duer@cantonrep.com. On X (formerly Twitter): @bduerREP

This article originally appeared on The Repository: Norfolk Southern settles East Palestine lawsuit; attorneys explain deal