(Lisbon) Morning Journal, wire report

The federal government agreed to a $15 million fine for Norfolk Southern over the disastrous Feb. 3, 2023, train derailment in East Palestine, and the railroad promised to pay more than $300 million to complete the efforts to improve safety that it announced after the crash and address community health concerns

The settlement comes two days after a federal judge signed off on the railroad’s $600 million class action settlement with residents whose lives were disrupted.

In addition to the civil penalty, Norfolk Southern agreed to reimburse the EPA an additional $57 million in response costs and set up a $25 million health care fund to pay for 20 years of medical exams in the community. The railroad will also pay $25 million to $30 million for long-term monitoring of drinking water and groundwater.

FEDERAL AGREEMENT

Many East Palestine residents said they feel the settlement announced Thursday by the Environmental Protection Agency and Justice Department doesn’t do nearly enough to a company that just reported a $527 million profit in the fourth quarter of last year and $53 million in the first quarter after the derailment costs. The railroad’s CEO received $13.4 million in total compensation last year.

“Honestly, no amount can ever make this right, but it should be at least enough to hurt them a little bit. I’m sure that’s not going to hurt their bottom line at all,” Jami Wallace said.

EPA Administrator Michael Regan said the fine is the largest allowed under the Clean Water Act, and the railroad agreed to continue paying all of the cleanup costs. Plus, he said, Norfolk Southern committed to meaningful safety improvements

But the railroad won’t face criminal charges, and the settlement won’t add anything to Norfolk Southern’s roughly $1.7 billion in total costs related to the derailment because the Atlanta-based company was already anticipating those costs.

Neither this federal settlement nor the class action settlement seems like enough to Krissy Ferguson.

“Slaps on the wrist. A $15 million fine? And I can never go back to my home again?” Ferguson said.

But resident Misti Allison said it is encouraging to see the investigations and lawsuits against the railroad start to wrap up, and the cleanup is expected to be done sometime later this year.

“I think this is a great step, but let’s continue to make sure the community is made whole,” Allison said.

CLASS ACTION SETTLEMENT

U.S. District Court Judge Benita Pearson in Youngstown on Wednesday granted preliminary approval to the $600 million settlement between the railroad and plaintiffs, opening the door for the claims process to begin.

Once the claims process is complete awards will be determined, and checks could be sent out as early as the end of this year or the beginning of 2025.

The settlement is meant to compensate residents who live or work within 20 miles of train derailment and intentional vent-and-burn of 1.1 million pounds of vinyl chloride. Businesses within 20 miles also are eligible class members.

The settlement is structured by three classes — those who live or work closest to where the train derailed and those who live 10 to 20 miles away and business owners within 20 miles who can prove financial losses from the rail disaster.

Residents within the 10 miles will also be able to file personal injury claims for potential health ailments suffered as a result of the derailment and chemical release.

Residents must opt-in the settlement before individual settlement amounts are decided. Residents also must opt-out if they do want to participate in the class action settlement and reserve the right to sue Norfolk Southern on their own at a later date.

Residents are likely to receive nowhere near millions once the funds are divided based on an allocation formula. A copy of a proposed claim form filed with the court listed how much a class member likely will get in property damages from the settlement — 0-2 miles from derailment, $70,000; 2-4 miles, $45,000; 4-7 miles, $30,000; 7-10 miles, $15,000; 10-15 miles, approximately $500; and 15-20 miles, $250.

WHAT’S LEFT

Pearson still has to decide the amount the attorneys who brokered the deal are to receive from the $600 million. In a motion, the lawyers requested “no more than 27% of the total monetary recovery” and “costs and expenses up to 3% of the fund.” If granted the high end of that request, the attorneys could pocket $180 million — $162 million in legal fees and $18 million in other expenses.

The remaining federal investigation is the National Transportation Safety Board’s probe into the cause of the derailment. That agency plans to announce its conclusions about what went wrong that night at a hearing June 25 in East Palestine.

The NTSB has said previously the derailment was likely caused by an overheating bearing that wasn’t caught in time by the trackside detectors the railroad relies on to spot mechanical problems. The head of the NTSB also said that the five tank cars filled with vinyl chloride didn’t need to be blown open to prevent an explosion because they were actually starting to cool off even though the fire continued to burn around them.

The railroad is still working to resolve a lawsuit Ohio filed against it after the derailment.

Stephanie Elverd with the (Lisbon) Morning Journal contributed to this report.