Residents who are contesting the $600 million settlement related to the catastrophic train derailment in East Palestine have petitioned a court to overturn an order mandating them to secure an $850,000 bond to pursue their appeal for increased financial compensation and detailed information regarding the contamination resulting from the disaster.
Approximately $300 million of the settlement funds remains inaccessible due to the ongoing appeal, even though a judge sanctioned the agreement back in September. The residents, who have withheld their consent to the settlement, are appealing to the 6th Circuit Court of Appeals to alleviate the burden of this significant financial requirement as they seek claims connected to the February 2023 incident involving a train derailment and subsequent fire.
Attorneys involved in the class-action lawsuit against Norfolk Southern indicated that the appeal could incur substantial administrative expenses while allocating personal injury compensations to residents who lived or worked within a 20-mile radius of the derailment site. Despite this, a provision of $18 million has already been allocated for covering related costs.
The incident involved a freight train derailment in the Ohio village near the Pennsylvania border, during which 11 cars carrying hazardous substances were involved. Area residents were ordered to evacuate the vicinity, and several days afterward, authorities, fearing a potential uncontrolled explosion, chose to intentionally release and ignite toxic vinyl chloride from five of the railcars, leading to plumes of flames and black smoke filling the air.
Attorney David Graham, representing the concerned residents, emphasizes that they are committed to continuing their legal efforts, contending that the settlement fails to offer adequate compensation for potential future health repercussions. These residents harbor fears that the contaminants could contribute to the development of cancer and other serious health issues, and they seek clarity on the findings from the lawyers who investigated to assess their risks better.
“We’re undeterred and are here to stay,” said Graham.
While the federal Environmental Protection Agency has stated that no toxic chemical levels have been detected in the community since shortly after the derailment, residents and certain doctors engaged in health impact studies express unease about the long-term effects of ongoing exposure to low chemical concentrations.
In a separate matter, class-action attorneys have opted not to share information regarding what their testing expert discovered during a visit to the community, citing confidentiality provisions included in the settlement agreement.
Despite the ongoing appeal process, the company responsible for managing the settlement has commenced the distribution of $120 million for personal injury claims. Many residents have been in anticipation for months, awaiting official communications regarding their respective compensation amounts.
The class-action attorneys, who received $162 million in fees for their involvement, assured residents last summer that individuals living within a two-mile radius of the site would receive up to $25,000 for personal injuries. However, accepting such payments would result in residents forfeiting their rights to initiate lawsuits in the future if health complications arise.
During the disaster, a total of dozens of railcars derailed, leading to the release of toxic substances and igniting fires. The situation escalated three days later when officials decided to intentionally breach five tank cars of vinyl chloride to incinerate the contents — a procedure that later investigations deemed unnecessary.
Main compensation payments for property damages, which could reach $75,000 per household, are currently stalled due to the appeal. The settlement amounts are designed to decrease progressively based on the distance from the disaster site, with some residents on the outer fringes receiving as little as a few hundred dollars.
Some individuals have reported online that their determination letters revealed compensation amounts that were often considerably less than originally promised last summer, while others stated amounts aligned precisely with earlier communications.
The class-action attorneys consistently highlighted the highest potential compensation during community meetings, yet the definitive formula outlining settlement distribution was not made public until after the deal was confirmed.
According to the official formula available online, for residents to qualify for full compensation, they must have returned to their homes prior to the lifting of the evacuation order on February 8, 2023. Those who returned the following day would only attain half of the potential settlement amount they could have otherwise claimed.
No responses were received from representatives of the Kroll company, which is overseeing the settlement payouts, as of Tuesday, and a spokesperson for the attorneys involved stated that no one was available for inquiries until Wednesday.
The East Palestine derailment ranks as one of the most severe railway accidents in the past decade, generating calls for regulatory changes. A proposed railway safety bill in Congress, however, stalled without approval. Although the railroad industry has promised potential reforms—such as augmenting trackside detection systems to detect flaws before they cause derailments—these changes have yet to showcase meaningful improvements in railway safety records.
