Some East Palestine derailment settlement payments should go out even during appeal of the deal

People who lived near the disastrous East Palestine derailment last year should still be able to receive personal injury payments even while the bulk of their $600 million class action settlement with Norfolk Southern railroad remains on hold during an appeal.

A spokesperson for the attorneys who represented residents said provisions of the deal will allow those personal injury payments to go forward while an appeal challenging whether the settlement is adequate and fair moves forward. It’s not clear how much of the settlement fund will be used up by those payments because the attorneys haven’t provided those details. A federal judge approved the settlement last month.

The lawyers haven’t provided any breakdown of how many of the roughly 55,000 claims they received are for injuries and how many are for property damage, nor have they said how much each person will receive. Only 370 households and 47 businesses opted out of the deal.

Residents who lived within 10 miles (16 kilometers) of the train crash that happened near the Ohio-Pennsylvania border in February 2023 were eligible to receive up to $25,000 apiece as long as they gave up the right to sue later if someone develops cancer or any other serious health condition.

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The property damage portion of the settlement provides larger payments of up to $70,000 per household for those living within two miles (3.2 kilometers) of the derailment, with payments decreasing the further away people lived, up to 20 miles (32 kilometers) out.

About the only payment that is relatively certain is the $162 million in legal fees the judge approved as part of the settlement. That won’t change unless the deal is overturned on appeal.

Residents don’t really know exactly how much they will receive. Their claims are still being reviewed, and any settlement they get will be reduced by the amount of aid they accepted after the derailment when Norfolk Southern paid to relocate families and compensate some people for lost wages and damaged belongings. Plus, some lawyers who aren’t representing the overall class are still demanding to collect a percentage of any settlement some residents receive.

At least $18 million has been consumed by administrative expenses, though the class lawyers now say that total will grow by at least $825,000 because the claims administrator will have to handle the personal injury payments separately from the property payments.

The initial appeal notice filed by the Rev. Joseph Sheely in the case was divisive in East Palestine, with some residents upset that their settlement checks will be delayed making threats. Then Sheely came forward publicly and said in interviews that he wanted no part in the appeal even though he was one of the small group of residents who questioned the deal this summer, casting doubt about the future of the appeal.

On Tuesday, four other area residents came forward and put their names on a notice saying they intend to appeal. They might face also complaints from their neighbors that they are just being greedy, but their lawyer, David Graham, said they are willing to take the heat to help ensure the deal is fair and addresses the town’s needs.

“We’ve got good people who have stepped forward in the face of adversity and persecution that they know they’re going to likely receive. And they stepped up to file this appeal,” Graham said.

The plaintiffs’ lawyers filed a motion Monday asking the judge to order Sheely to post an $850,000 bond before his appeal could move forward. That may be moot now that the notice of additional appeals has been filed, but it’s not clear whether the lawyers will ask all of the appellants to post a bond.

Those who object to the deal say they felt rushed to accept it without ever receiving a full accounting of the contamination they were exposed to when tank cars full of hazardous chemicals spilled their contents or when officials decided to needlessly blow open five tank cars of vinyl chloride and burn that plastic ingredient. Some doubt the Environmental Protection Agency’s assurances that their town is safe, and the plaintiffs’ attorneys never disclosed what their own expert discovered when he tested for dioxins and other dangerous chemicals around East Palestine.

The plaintiffs’ lawyers reiterated in their motion Monday that even if residents feel like they have inadequate information about the dangers they face because of questions about the EPA response or the testing data the agency reports or the cleanup, they should be able to trust the lawyers because of the research they did and the experts they consulted.

Graham said that the personal injury payment in particular seems woefully inadequate. He said residents will quickly rack up medical bills bigger than that payment if they develop any kind of serious health problems.

The railroad has agreed in a separate federal settlement with the government to pay $25 million for 20 years of medical exams for residents, but that did didn’t include any money for treatment of any illnesses that develop. That deal hasn’t yet received final approval.