Manufacturer Sues Norfolk Southern for Derailment that Closed His Businesses

He sued the railroad for $500 million.

In this photo taken with a drone, portions of a Norfolk Southern freight train that derailed the previous night in East Palestine, Ohio, remain on fire at mid-day, Feb. 4, 2023.
In this photo taken with a drone, portions of a Norfolk Southern freight train that derailed the previous night in East Palestine, Ohio, remain on fire at mid-day, Feb. 4, 2023.
AP Photo/Gene J. Puskar, File

A business owner with companies near where a Norfolk Southern train derailed and caught fire in February has sued the railroad for $500 million, saying most of his eastern Ohio companies have remained closed and he hasn't been able to reach a financial settlement with the railroad.

Edwin Wang filed his federal lawsuit Tuesday. It comes amid government lawsuits against Norfolk Southern and a class action case on behalf of residents who have complained about the derailment's impact on East Palestine, Ohio.

Wang's companies make specialized ceramic fiber insulation products for steel mills. The wholesale part of his business, CeramSource, was able to reopen last month in a new location just over the nearby Pennsylvania border. But contamination concerns and the costly equipment Wang can't afford to replace have kept his other companies closed. Before the derailment spilled chemicals on his property, Wang's companies employed close to 50 people and had plans to expand.

Norfolk Southern declined to comment on the lawsuit, but spokesman Thomas Crosson said the railroad is "actively supporting businesses in their recovery efforts." That includes reaching confidential settlements with 11 businesses and offering $1.8 million to 55 others.

The railroad's CEO has also apologized for the derailment and pledged to make things right. As part of that, the railroad has committed nearly $102 million to the community, and has been working to clean up the mess left behind by the derailment. The EPA is monitoring those efforts.

The railroad told investors last month that costs associated with the derailment had reached nearly $1 billion and are expected to climb as the lawsuits are resolved. In addition to the lawsuits, the company is working out details of three long-term funds it pledged to create to help East Palestine recover.

Wang's lawsuit blames the derailment on Norfolk Southern having cut its workforce in recent years and its decision to rely more on longer, heavier trains. Railroad unions have also alleged that those changes β€” as well as similar ones made in the rest of the industry β€” made railroads riskier. The company has defend its overall safety record and said the operational changes only made it more efficient. But it also pledged to improve safety and become the example in the industry.

Norfolk Southern's actions before and after the derailment compounded the damage, Wang asserts in court documents that call the derailment an "unmitigated disaster of unimaginable portions with terrible consequences."

The National Transportation Safety Board has said an overheated bearing on one of the railcars likely caused the derailment, but it won't issue its final report until sometime next year.

Atlanta-based Norfolk Southern is one of the nation's largest railroads and operates roughly 20,000 miles of track in the eastern United States.

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