Norfolk Southern Says Ohio Toxic Train Derailment Expected to Cost Railroad $387M

Norfolk Southern estimates that a train derailment in February, which led to the release of toxic chemicals near East Palestine, Ohio, will cost the rail company about $387 million, as it faces lawsuits and federal investigations over what appear to be a lack of adequate safety measures.

In a quarterly earnings report issued last month, Norfolk Southern CEO Alan Shaw indicated the $387 million represents both $55 million in cleanup costs to date, and the rest is earmarked for expected costs in the future.

The Norfolk Southern train derailment costs include removing contaminated soil, replacing damaged tracks and do not include the company’s $1.1 billion in insurance coverage according to the report.

On February 3, a massive Norfolk Southern train derailed near Ohio and Pennsylvania borders, resulting in 20 tankers full of toxic chemicals being breached and catching fire. This caused a temporary evacuation of nearly 2,000 local residents, and there have been growing reports of illnesses at the East Palestine train derailment site, as well as a number of animal deaths and concerns about water, soil and air contamination in a wide area around the accident location.

While the crash investigation continues, and health experts evaluate the long-term health risks, Norfolk Southern toxic train derailment lawsuits are being filed by those impacted, including claims for economic damages, medical monitoring and personal injuries.

The accident, and several other recent train derailments, have led to questions about the railroad company’s safety practices and safety culture.

According to the National Transportation Safety Board (NTSB), the derailment was just one of a string of incidents which have raised concerns about how the company operates. The NTSB, which has launched an investigation into Norfolk Southern, indicates it has investigated several significant accidents by Norfolk Southern since December 2021.

These include the death of an employee following an accident with a railroad spike machine while replacing track in Pennsylvania in December 2021; a derailment near Sandusky, Ohio on October 8, 2022; the death of one employee and the injury of another when one Norfolk Southern train struck part of another in Alabama in December 2022; the train derailment accident in East Palestine on February 3; the derailment of a 2.55-mile-long train on March 4 near Springfield, Ohio, and the death of a Norfolk Southern employee near Cleveland on March 7.

Not only does Norfolk Southern face an NTSB investigation, as well as lawsuits over the train accident, but the company is also under investigation by other parts of the government as well.

In March, the U.S. Centers for Disease Control and Prevention (CDC) sent a response team from its Agency for Toxic Substances and Disease Registry (ATSDR), which began interviewing residents about their health concerns and symptoms they have developed since the accident.

On February 10, the U.S. Environmental Protection Agency (EPA) sent a notice to Norfolk Southern, announcing it was considering to make the company pay for the cleanup costs under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA). Since then, EPA officials have said in live interviews that they will definitely require Norfolk Southern to pay for those costs.

The company also faces increasing criticism from Congress and the Department of Transportation over what appears to be a cavalier attitude toward safety in order to maximize profits, resulting in increased pressure for new safety requirements and regulations regarding rail transport of hazardous materials.

In addition, the Ohio Attorney General filed a lawsuit on behalf of the state against Norfolk Southern, seeking to force the company to pay for cleanup of the East Palestine site. The lawsuit cites Norfolk Southern for numerous hazardous waste and pollution law violations at the state and federal level, as well as common law negligence, public nuisance and trespass laws.

It is unclear whether the $387 million detailed in Norfolk Southern’s quarterly earnings report includes estimated legal fees, or whether it includes losses from an inability to use the track in that area, which is a major route between Chicago and the east coast.