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 adverse impacts from the derailment, which could include health care needs, property restoration, and compensation for any business loss. Individuals within 10 miles of the derailment may choose to receive additional compensation for any past, current, or future personal injury, reports the AP.
The company said that the settlement doesn't include or constitute any admission of liability, wrongdoing, or fault. The settlement is expected to be submitted for preliminary approval to the US District Court for the Northern District of Ohio later this month. Payments to class-action members could begin by the end of the year. 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 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.
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 likely caused the crash. The EPA has said the cleanup in East Palestine is expected to be complete sometime later this year. The railroad announced preliminary first-quarter earnings of 23 cents per share Tuesday to reflect the impact of the settlement. Railroad CEO Alan Shaw, who's fighting for his job against an activist investor who wants to overhaul the railroad's operations, said Norfolk Southern is "becoming a more productive and efficient railroad. There is still more work to be done to achieve industry-competitive margins."
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