Residents of East Palestine, Ohio, are currently contesting a $600 million settlement related to a devastating train derailment that occurred in February 2023. These residents have filed a motion with the court to overturn a recent ruling that requires them to secure an $850,000 bond as they pursue an appeal for increased compensation and greater transparency regarding the environmental contamination resulting from the incident.
Despite the settlement being approved in September, approximately $300 million remains inaccessible due to the appeal. The residents are urging the 6th Circuit Court of Appeals to eliminate the bond requirement, which they believe places an unfair financial burden on them as they seek to address their claims from the derailment and subsequent fire.
Attorneys representing the class-action suit against Norfolk Southern have cautioned that continuing the appeal may lead to added administrative costs, potentially impacting how personal injury payments are managed. They have indicated that about $18 million has already been allocated for handling such expenses.
During the accident, eleven freight cars carrying hazardous materials derailed in East Palestine, resulting in the evacuation of local residents. In a drastic move, authorities released and incinerated toxic vinyl chloride from five rail cars to prevent an uncontrolled explosion, which caused clouds of toxic smoke to billow into the air.
David Graham, the attorney for the residents disputing the settlement, asserts that his clients believe the compensation offered does not sufficiently address potential long-term health repercussions, such as a heightened risk of cancer. He emphasized the necessity for clarity on the findings uncovered by their legal team during the investigation to adequately assess health risks.
“We’re not intimidated, and we’re not going anywhere,” Graham stated, underscoring their determination to continue their legal battle.
Although the federal Environmental Protection Agency (EPA) has indicated that toxic chemical levels have not been detected in the area since shortly after the derailment, residents remain concerned. Some local physicians involved in researching the health effects of the incident highlight their worries about the potential consequences of long-term exposure to even low levels of contaminants.
Meanwhile, the class-action attorneys have opted not to share their expert’s findings from the community, citing confidentiality agreements as part of the settlement terms.
In the interim, the company overseeing the settlement has begun disbursing $120 million for personal injury claims, with many residents left waiting for notifications regarding their individual compensation amounts.
Class-action lawyers earned $162 million in fees for their involvement in the case, assuring residents last summer that individuals living within two miles of the crash site could receive as much as $25,000 for injuries. However, accepting these funds means they forfeit their rights to pursue future legal claims related to health issues.
Additional complications arose after many railcars derailed and released their hazardous contents into the environment. The subsequent decision to ignite and release vinyl chloride was later criticized as unnecessary by investigators.
The primary compensation for property damage, which could be as high as $75,000 per household, has been stalled due to the appeal. Residents located further from the derailment site are set to receive smaller payments, sometimes totaling only a few hundred dollars.
Some residents who have received compensation determination letters reported discrepancies, with amounts varying significantly, sometimes falling thousands below earlier estimates. Others have affirmed that their payments matched the anticipated figures. During community meetings, class-action attorneys highlighted the maximum potential payouts, but the official payment calculation method was not revealed until after the settlement received judicial approval.
According to the posted settlement formula, individuals who resided or worked in the town during the disaster and did not return until following the evacuation lifting on February 8, 2023, will qualify for full payment. Payment amounts will decrease for individuals moving to the area after the incident, with several other factors also influencing final compensation.
No responses were provided by the representatives of Kroll, the settlement administrator, on Tuesday, nor was an attorney available to comment before Wednesday.
The East Palestine derailment stands as the most catastrophic rail incident in over a decade, igniting calls for regulatory reform. A rail safety bill that was introduced in Congress has yet to pass. The rail industry promised initiatives, such as enhancing trackside inspections, to prevent future derailments, yet significant improvements in safety records are still lacking.
