Norfolk Southern has agreed to a monumental $600 million settlement to resolve lawsuits stemming from a devastating train derailment in Ohio last year. The announcement, made public on Tuesday, outlines the significant financial compensation to be disbursed to individuals and businesses impacted by the incident, pending approval by an Ohio federal court.
If greenlit, this settlement would mark a historic moment, setting a new benchmark for railroad disaster compensations in North America. The proposed sum eclipses the $343 million fund established following the tragic 2013 Lac-Mégantic accident, underscoring the gravity of the Ohio derailment and its repercussions. Norfolk Southern estimates that total costs associated with the derailment could soar beyond $1 billion, a staggering figure reflecting the scale of the incident.
Over 30 lawsuits filed against Norfolk Southern were consolidated by a federal judge in April 2023, setting the stage for this comprehensive settlement. The agreement seeks to address class-action claims within a 20-mile radius of the derailment site and personal-injury claims within a 10-mile radius, though certain specifics are still being finalized, including the methodology for allocating funds based on proximity to the disaster zone.
The settlement will go towards compensating residents for various damages, including evacuation costs, property devaluation, and disruptions from environmental cleanup efforts. Moreover, businesses that suffered losses in 2023 due to the derailment, along with individuals facing health-related expenses, stand to benefit from the financial relief.
In addition to unveiling the settlement details, Norfolk Southern also disclosed its preliminary first-quarter financial results, reporting a profit of 23 cents per share on railway revenue totaling $3 billion. Notably, the earnings exclude expenses linked to the East Palestine settlement and initiatives aimed at streamlining management ranks. The company is slated to release its complete quarterly report on April 24, with shares already experiencing a modest uptick in Tuesday’s trading.
Despite this significant development, Norfolk Southern remains entangled in legal proceedings, facing lawsuits from the state of Ohio and the U.S. Environmental Protection Agency.
Crucially, Norfolk Southern reiterated that the settlement does not constitute an admission of liability or wrongdoing, reaffirming its stance amidst ongoing legal battles and public scrutiny. The East Palestine derailment, which occurred on February 3, 2023, left a lasting impact on the community, prompting nationwide attention and underscoring the imperative of stringent safety protocols within the railroad industry.
Source:The WallStreet journal
