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Norfolk Southern reaches $310M settlement of fed probes into Ohio wreck

Kelly Yamanouchi, The Atlanta Journal-Constitution on

Published in Business News

Atlanta-based Norfolk Southern has agreed to a more than $310 million settlement of federal investigations into its fiery derailment of a train carrying hazardous materials in East Palestine, Ohio, more than a year ago.

The settlement reached with the U.S. Environmental Protection Agency and U.S. Department of Justice comes after EPA Administrator Michael Regan last year said Norfolk Southern would be held accountable for its actions.

“No community should have to experience the trauma inflicted upon the residents of East Palestine,” Regan said in a written statement Thursday. The agreement “delivers on this commitment, ensures the cleanup is paid for by the company, and helps prevent another disaster like this from happening again.”

The consent decree is to resolve all claims and investigations into the East Palestine derailment by the Justice Department and EPA, which in March 2023 filed a lawsuit against Norfolk Southern alleging the Feb. 3, 2023, wreck unlawfully polluted waterways.

President Joe Biden issued an executive order last September promising to hold the railroad responsible for the derailment and the burning of hazardous chemicals in East Palestine.

Regan’s statement on Thursday said: “Because of this settlement, residents and first responders will have greater access to health services, trains will be safer and waterways will be cleaner.”

The settlement includes a $15 million civil penalty, $235 million for “all past and future costs” for ongoing cleanup efforts, a $25 million community health program for medical exams and mental health services for up to 20 years, about $30 million for monitoring of groundwater and drinking water, about $6 million for waterway remediation and $175,000 for damages to natural resources, according to the federal government.

 

The agreement is subject to public comments for 30 days and to approval by the U.S. District Court for the Northern District of Ohio.

“From day one, it was important for Norfolk Southern to make things right for the residents of East Palestine and the surrounding areas,” said Norfolk Southern CEO Alan Shaw in a written statement. “We will continue keeping our promises and are invested in the community’s future for the long-haul.”

In addition to paying for the cleanup, Norfolk Southern is also agreeing to make safety improvements, including installing more devices to detect overheated wheel bearings to prevent derailments. The company said it expects to spend $244 million on safety initiatives through 2025 as part of its previously-announced “six-point safety plan” and other investments.

The total financial impact of the settlement to Norfolk Southern is already included as part of the $1.7 billion in charges for the response to the East Palestine derailment recorded by the end of the first quarter of this year, according to the company.

Last month, Norfolk Southern announced a separate $600 million settlement agreement to resolve a consolidated class action lawsuit filed against the railroad by residents in the area and others after the derailment.

Norfolk Southern said it also continues to pursue insurance reimbursements and claims.


©2024 The Atlanta Journal-Constitution. Visit at ajc.com. Distributed by Tribune Content Agency, LLC.

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