Norfolk Southern agrees to $600 million settlement for East Palestine train derailment

The company whose freight train derailed in East Palestine, Ohio, causing a massive chemical spill last year has reached a $600 million settlement agreement with residents. 

Norfolk Southern on Tuesday announced an agreement in principle to resolve a class action lawsuit brought by residents and businesses impacted by the derailment. If accepted by the court, the settlement will provide financial payments to members of the community and includes a voluntary program to compensate individuals for past, present and future injuries resulting from exposure to toxic chemicals, attorneys for the plaintiffs said. 

"This is another promise kept by Norfolk Southern to make it right for the people of East Palestine and the surrounding communities," the company said in a statement.

The settlement agreement would resolve all class action claims within a 20-mile radius of the derailment, and personal injury claims in a 10-mile radius. 

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It comes after Norfolk Southern already pledged more than $100 million in community assistance to East Palestine and surrounding areas in Ohio and Pennsylvania.

"This resolution comes shortly after the one-year anniversary of the disaster and will provide substantial compensation to all affected residents, property owners, employees and businesses residing, owning or otherwise having a legal interest in property, working, owning or operating a business for damages resulting from the derailment and release of chemicals," said attorneys Seth Katz, Elizabeth Graham, Jayne Conroy and T. Michael Morgan, who are representing the plaintiffs.

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"We thank the Judge overseeing the litigation, the Honorable Benita Pearson, for her diligence and guidance, holding the parties to strict deadlines to reach a resolution or prepare the case for trial," said the attorneys," they added.

The derailment of a Norfolk Southern train at the Ohio-Pennsylvania border on Feb. 3, 2023, resulted in millions of gallons of toxic chemicals being spilled into the environment.

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The disaster led to many residents on both sides of the border abandoning their homes and suffering from various ailments. The Atlanta-based railroad has been making payments to residents forced to relocate but announced in December that the financial aid would stop on Feb. 9.

So far, Norfolk Southern has committed $104 million to the East Palestine community, including $21 million in direct payments to residents and $50 million in investments in the area over the next decade. 

The company released its preliminary first quarter 2024 financial results on Tuesday, announcing $3 billion in operating revenues. The report said the settlement agreement and other costs increased its operating expenses by $691 million. 

Norfolk Southern previously reported a $1.1 billion hit last year due to expenses stemming from the incident, but still made $2.9 billion.

Norfolk Southern Corp. shares were down 1.27% in pre-market trading Tuesday morning. 

FOX Business' Breck Dumas, Louis Casiano and Reuters contributed to this report.