Norfolk Southern sued by Ohio over ‘entirely avoidable’ East Palestine derailment

Norfolk Southern’s
NSC,
+0.22%
stock, which has dropped 18.6% since the Feb. 3 derailment near the Ohio-Pennsylvania border, fell 1% Tuesday. 

“Ohio shouldn’t have to bear the tremendous financial burden of Norfolk Southern’s glaring negligence,” Yost said in a statement. “The fallout from this highly preventable incident may continue for years to come, and there’s still so much we don’t know about the long-term effects on our air, water and soil.”

Related: What’s next for Norfolk Southern after Senate hearing on East Palestine, Ohio, disaster?

The suit, which was filed in U.S. District Court of the Northern District of Ohio, cites the company’s “escalating accident rate, which has risen 80% in the past 10 years,” according to the statement. “At least 20 Norfolk Southern derailments since 2015 have involved chemical discharges,” the statement added.

“Every day since the derailment, our goal has been to make it right for the people of East Palestine and the surrounding communities,” Norfolk Southern said in a statement in response to the lawsuit. “We are making progress every day cleaning the site safely and thoroughly, providing financial assistance to residents and businesses that have been affected, and investing to help East Palestine and the communities around it thrive.”

In the statement, Norfolk Southern continued: “We are also listening closely to concerns from the community about whether there could be long-term impacts from the derailment.” The company said that representatives met with Yost this week to discuss three additional programs it plans to develop in conjunction with the attorney general’s office and other community leaders and stakeholders.

No one was killed or injured in the Ohio derailment, but the incident has been described as a “PR nightmare” for Norfolk Southern and the rail industry. The derailed cars included 11 tank cars carrying hazardous materials that subsequently ignited, damaging an additional 12 railcars, according to the National Transportation Safety Board, and setting off concerns about the impact on air and water quality and dangers to health in the region.

Related: Norfolk Southern will do ‘everything it takes’ for East Palestine, CEO tells senators

Norfolk Southern acknowledged that many residents are worried about what they will do if health effects related to the derailment are discovered years from now. “We appreciate Ohio Governor Mike DeWine’s leadership and advocacy on this point,” the company said in its statement. “To date, environmental monitoring
continues to show the air and drinking water are safe. To provide an additional level of assurance, we are committed to a solution that addresses long-term health risks
through the creation of a long-term medical compensation fund.”

Last week, Norfolk Southern CEO Alan Shaw was grilled by senators when he provided testimony on the disaster before the Senate Committee on Environment and Public Works.

While safety was the primary focus of the hearing, Shaw was also pressed on Norfolk Southern’s stock buybacks and the company’s use of precision scheduled railroading, which focuses on the movement of individual train cars rather than whole trains.

In his testimony, Shaw vowed to do “everything it takes” for the community affected by the derailment.

Related: ‘Norfolk Southern will pay for the harm it has caused’ in Ohio derailment, says GOP senator

Shaw began his testimony by saying he is “deeply sorry” for the effect that the derailment has had on East Palestine. In prepared remarks, the CEO pointed to his company’s commitment to reimbursements and investments of more than $20 million for the community, including by helping more than 4,200 families through an assistance center it has set up in East Palestine.

In the statement accompanying his lawsuit, Yost noted Norfolk Southern’s repeated vow to make the situation right. “This lawsuit will make sure that Norfolk Southern keeps its word,” he said.