Norfolk Southern agrees to $310 million federal settlement over Ohio train derailment

• Norfolk Southern has agreed to pay $310 million to settle charges over the East Palestine, Ohio, train derailment that occurred in February 2023, with the majority of that going to cleanup costs.
• The company will pay a $15 million fine for alleged violations of the Clean Water Act as part of the federal settlement.
• Norfolk Southern is estimating it will spend $1.7 billion in total costs associated with the incident.

Norfolk Southern has agreed to pay $310 million to settle charges over a toxic train derailment in East Palestine, Ohio, in February 2023, the company announced on Thursday.

The majority of the settlement is an estimated $235 million to cover all past and future cleanup costs. Per the agreement, the company will also pay a $15 million civil penalty to resolve alleged violations of the Clean Water Act.

The agreement resolves a lawsuit filed in March 2023 by the EPA and the U.S. Department of Justice against Norfolk Southern for allegedly violating the Clean Water Act after the derailment of a freight train carrying hazardous substances ignited a dayslong fire that forced local residents to evacuate and contaminated the soil and waterways.

"We are pleased we were able to reach a timely resolution of these investigations that recognizes our comprehensive response to the community's needs and our mission to be the gold standard of safety in the rail industry," Alan Shaw, president and CEO of Norfolk Southern, said in a statement. "We will continue keeping our promises and are invested in the community's future for the long-haul."

Dustin Franz | Afp | Getty ImagesSmoke rises from a derailed cargo train in East Palestine, Ohio, on February 4, 2023.

The settlement, if approved by the U.S. District Court for the Northern District of Ohio, would require Norfolk Southern to not only "take measures to improve rail safety" but also "pay for health monitoring and mental health services for the surrounding communities," among other actions, the EPA said Thursday. That includes paying an estimated $7 million for remediation projects to curb pre-existing pollution and boost the region's water quality.

"No community should have to experience the trauma inflicted upon the residents of East Palestine," said EPA Administrator Michael Regan in a statement. "Today's enforcement action delivers on this commitment, ensures the cleanup is paid for by the company, and helps prevent another disaster like this from happening again."

Mandel Ngan | Afp | Getty ImagesUS President Joe Biden receives an operational briefing from officials on the continuing response and recovery efforts at the site of a train derailment which spilled hazardous chemicals a year ago in East Palestine, Ohio on February 16, 2024.

Norfolk Southern is estimated to have spent approximately $1.7 billion in total costs associated with the incident. The company said Thursday's settlement won't add to that total figure because it had already set aside money and had been anticipating the cost.

The entire cleanup effort is currently anticipated to conclude on or around November 2024, but that "may change," according to EPA spokesman Remmington Belford.

The resolution with the EPA comes one month after the company agreed to pay $600 million in a class-action lawsuit settlement related to the 2023 derailment.