Norfolk Southern trial seeks Oxy Vinyls, GATX payment for East Palestine settlement

A trial in which Norfolk Southern railroad wants PVC maker Oxy Vinyls LP to pay part of a $600 million settlement related to the East Palestine train derailment began March 31 in U.S. District Court in Youngstown, Ohio.

Atlanta-based NS also wants railcar owner GATX to pay part of that settlement that was reached after the Feb. 3, 2023, derailment led to a controlled release and burn of vinyl chloride monomer feedstock — which was being shipped by Oxy Vinyls to a PVC plant in New Jersey — and the evacuation of a large part of that Ohio village.

In a March 31 email to Plastics News, an Oxy Vinyls spokesperson said the trial "is nothing more than [the railroad's] continued attempt to shift the blame, attention, and financial responsibility for its train derailment, response and vent and burn decision to anyone other than itself."

The spokesperson added that Oxy Vinyls "did not cause the derailment, its tank cars did not breach and it did not make the decision to vent and burn the VCM cars. It was Norfolk Southern's decision not to inform the incident commander of Oxy Vinyls' data-based view that polymerization was not occurring."

The spokesperson also said that at the 2023 National Traffic Safety Board (NTSB) investigative hearing in East Palestine, testimony from multiple witnesses and statements made by Chair Jennifer Homendy “revealed Norfolk Southern and its contractors ignored their own data that demonstrated that the VCM remained stable and was not polymerizing or at risk of creating an explosion.”

In a March 31 email to PN, an NS spokesperson said the railroad “alone has paid the costs relating to the derailment despite ample evidence that other parties share in the responsibility.”

The spokesperson added the trial “is about reinforcing the role shippers and railcar owners play in transportation safety and ensuring everyone responsible pays their fair share. We are asking a jury to hold the defendants accountable/liable for the negligence that caused both the derailment and the vent and burn decision.”

The spokesperson also said that NS's commitment to East Palestine “remains steadfast” and that the verdict in the trial “will have no impact on our promise to do what’s right for East Palestine and the surrounding area. Norfolk Southern’s ongoing commitment to community is unchanged and will continue regardless of the outcome.”

An Associated Press report said the lawsuit won't change the amount residents will receive from the settlement or any payments to the village. Those payments already are established in various settlement agreements. The trial only will affect which company has to pay for the class-action settlement, according to the report.

The report said NS lost a similar lawsuit last year when it tried to require Oxy Vinyls and GATX to help pay for environmental cleanup after the derailment. The cleanup has cost NS more than $1 billion in total. The railroad is making similar arguments in the current trial, the report added.

According to the report, NS believes Oxy Vinyls should pay some of the settlement because the firm provided "inconsistent and inaccurate information" about its VCM before officials decided to release and burn it.

Both GATX and OxyVinyls have said it would be "ridiculous" to hold them responsible for the derailment, according to the report, when NS operated and inspected the train and all the cars and was responsible for delivering the cargo safely.

In January, NS agreed to pay $22 million to the village to settle claims related to the derailment. Officials with the village and with NS said the settlement provides East Palestine with that amount for priorities identified by the village.

According to the NTSB's official account of the accident, part of an eastbound NS train derailed on its main track in East Palestine. Eleven derailed tank cars carrying hazardous materials ignited, fueling fires that damaged another 12 rail cars that did not derail. First responders implemented a 1-mile evacuation zone surrounding the derailment site that affected up to 2,000 residents.

NTSB later ruled that the burnoff was unnecessary. Data from Oxy Vinyls showed the VCM at the site was not polymerizing and as a result was not at risk of causing an explosion.

A highly contentious hearing between NS and NTSB took place June 28, 2023, in East Palestine. At the hearing, NTSB officials criticized NS for a lack of access to data on the train's contents, a malfunctioning sensor that would have detected the overheated bearing and a lack of training for volunteer fire departments, such as the one in East Palestine that responded to the derailment.

NS reached the $600 million settlement during 2024. In an update posted Jan. 24, NS said area residents "can use the compensation in any manner they see fit to address potential adverse impacts from the derailment."

Also during 2024, NS agreed to a $310 million settlement with the U.S. Department of Justice, the U.S. Environmental Protection Agency and the U.S. Department of the Interior to resolve all claims and investigations from the derailment

NS officials added in the Jan. 24 update that the firm has committed $117 million in community support to East Palestine and is spending $15 million to establish a well water monitoring program in the area.