Is Norfolk Southern 'making it right' after Ohio derailment? New lawsuit adds to doubts

Norfolk Southern began making promises to East Palestine, Ohio, soon after its train derailed and caught fire in February 2023. The railroad said it would ''make it right'' after five tank cars of vinyl chloride were intentionally burned, sending up a huge black plume of smoke that spread more toxic chemicals over homes, schools and farms.

A lawsuit filed by the school district Wednesday adds to doubts about the railroad's commitment after plans for a student wellness center and athletic complex stalled. Some residents also point to Norfolk Southern's attempts to force other companies to help pay for its $600 million class-action settlement and its agreement to abandon a training center for first responders that was meant to help the village recover.

''I think a lot of empty promises were made,'' said lifelong resident Krissy Ferguson. She recently moved her family away to Poland, Ohio, saying her home in East Palestine still doesn't feel safe.

Of course, not everyone feels exactly the same way. East Palestine 's people remain deeply divided: While some complain about lingering respiratory problems, rashes and other unexplained symptoms that raise long-term health concerns, many others say they feel fine and want to put the disaster behind them.

''From the village's perspective, Norfolk Southern is meeting the expectations outlined in our agreements,'' a village spokeswoman said. ''That's all we can say at this time.''

East Palestine and the railroad announced a $22 million settlement in January that included $13.5 million already paid to the town and formalized the railroad's additional $25 million pledge to renovating the village's park. Without offering explanations or details, the joint statement said both sides agreed the promised training center isn't feasible.

Norfolk Southern estimates that it has committed more than $115 million to help residents and communities in the area recover, including $1.1 million paid to the school district. The railroad said it has paid every invoice it received from the schools with proper documentation. That total doesn't include the class-action settlement or the more than $1.1 billion the railroad has spent on the cleanup.

Lawsuit says promises were broken

But the school district isn't satisfied. Its lawsuit accuses the railroad of failing to reimburse the schools for using its buildings during the disaster and abandoning construction of the community wellness center and athletic complex. The district lost more than $1 million in state and federal funding last year alone as enrollment dropped. Property and income tax revenues have dropped as well, leaving future school finances uncertain.

''To abruptly walk away, it says a lot about what a corporation can do to a community,'' Superintendent James Rook said.

The schools' center, with an estimated price tag of $30 million, was meant to offer health and wellness care and job training for students, the lawsuit said. Norfolk Southern even hired an architect and construction firm to design it, and the district set up a community steering committee to suggest ideas. But the project stalled, and Rook said the railroad largely quit returning the district's calls this year.

Rook said the wellness center was supposed to be the centerpiece of Norfolk Southern's commitment to fixing the mess. ''People were very excited, still are, about the potential of it," he said.

The district is seeking reimbursement for at least $300,000 in additional expenses on top of the cost of the center as well as compensation for lost revenue.

''Norfolk Southern hasn't even begun to scratch the surface in terms of reimbursing the true costs of this disaster to the East Palestine Board of Education and the students that it serves,'' said attorney Ashlie Case Sletvold.

Norfolk Southern says it remains committed

The railroad insists there has been no change in its commitments. The derailment became the worst North American rail disaster in a decade after the officials blew open the vinyl chloride tanks, forcing evacuations as the plastic ingredient burned, generating new chemicals that later fell to the ground. The National Transportation Safety Board found the venting was unnecessary.

Norfolk Southern maintains its www.nsmakingitright.com website, based on the phrase former CEO Alan Shaw repeated in testimony to Congress and in community meetings and interviews. Shaw was fired last fall for having an inappropriate consensual relationship with a railroad executive.

''From the outset, we have been clear about our commitment to do right by the community in East Palestine. We remain focused on taking meaningful action that aligns with community priorities," a railroad statement said.

Current CEO Mark George said after taking over that Norfolk Southern will follow through on all its promises, and he's visited East Palestine several times.

Lingering frustrations

But residents like Misti Allison say it doesn't feel like ''making it right'' when the railroad refuses to pay for cost overruns beyond its $25 million pledge to the park project. She said people are also mourning the loss of the training center for first responders, which would have brought jobs to town and helped firefighters throughout the region prepare to handle rail disasters.

''Now that Alan Shaw is gone and there is a new CEO in place, all the board cares about is getting those shares as high as possible and to be able to make it right for their shareholders," Allison said. ''And if the East Palestine community is a casualty in that, then so be it. This is yet another example of putting profits over people.''

Most of the class-action payments remain on hold because of appeals, adding to frustration in the village. Some personal injury payments have been trickling out, but many residents have complained about the amounts. The court system is the reason for those payment delays, but many blame the railroad nevertheless.

The village's leaders are trying to build on the positives, said Barb Kliner, a retired chief financial officer for a different school district, but she said "the feeling among the people that I associate with and the older folks in town is just kind of disappointment.''

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Funk reported from Omaha, Nebraska and Seewer reported from Toledo, Ohio.