Ohio businessman sues Norfolk Southern for up to $500M after derailment

Federal lawsuit alleges train crash and release of toxic compounds harmed businesses

An Ohio businessman has filed suit against Norfolk Southern asking a federal court to award him up to $500 million in compensation for damages done to his businesses when a train operated by the Atlanta-based company derailed in February.

In a suit filed Tuesday in the U.S. District Court for the Northern District of Ohio, Edwin Wang contends that the accident in East Palestine, which released toxic chemicals, forced the closure of his main business for months and what he says is the termination of two other businesses.

The Feb. 3 incident involved rail cars carrying pollutants, oil and hazardous substances. Some cars spilled their loads into a ditch that feeds a stream. Three days later, government officials and the Atlanta-based railroad decided to burn toxic vinyl chloride from cars that had toppled.

They feared that the chemical had built up pressure and was threatening to cause an uncontrolled explosion that could have blasted shrapnel across the town.

Officials at Norfolk Southern said they do not comment on pending litigation.

The February rail disaster has upended the town of East Palestine, which hugs the Pennsylvania border, and also led to federal and state investigation and litigation against Norfolk Southern. In its third quarter earnings report made public last month, Norfolk Southern said the company had tallied $966 million in expenses for the East Palestine derailment, including $803 million in the first half of the year.

In the suit, Wang says that the company “prioritized profits over safety and actively lobbied to block reasonable safety precautions.” The railroad’s response to the derailment “compounded the harm,” the complaint said, and the incident damaged the finances of Wang’s companies, perhaps fatally.

Wang owned CeramSource, a wholesaler of critical protective parts for steel mills, that was located next to the site of the Feb. 3 derailment.

The company was shuttered for nearly nine months, and has only recently relocated to Beaver Falls, Penn. Two other companies he owns, specialty ceramic manufacturers CeramFab and WYG Refractories, have remained closed “because of the level of contamination on the properties, the risks to the employees, and the uncertainty of future operations because of the contamination and continued remediation issues,” said a spokeswoman for Wang.

Because of the cost of setting up those facilities, “moving CeramFab and WYG like CeramSource is not an option,” she said.

The crash spilled chemicals onto his properties. Later when Norfolk Southern oversaw a controlled burn of other chemicals in the crippled train, that spread more contamination, the suit argues, creating extreme heat which forced toxic contaminants into and through the walls of his buildings.

Wang argues in his suit that the financial impact was not limited to the immediate physical damage. In his filing, he contends that the derailment, the resulting national spotlight and the continued impacts on the area, also eroded the confidence of both existing customers and potential future customers.

“There is a palpable taint on everything now related to East Palestine,” Wang said in a statement. “It comes up in every sales call with every customer. Some customers do not want existing products from East Palestine because of a perceived contamination risk.”

Wang says that more than $150 million in damage has been done to his companies thus far. But in the complaint, he alleges that damages would rise above $500 million if he is forced to permanently close CeramFab and WYG, he said.

In late October, the U.S. Environmental Protection Agency ordered Norfolk Southern to continue cleaning up creeks in East Palestine. At the time, EPA Administrator Michael Regan visited East Palestine, and the agency said 98% of the excavation of the derailment site has been completed.

Norfolk Southern has been working to clean up the derailment site in East Palestine since the EPA issued a Superfund order requiring the railroad to remove spilled substances and contaminated soil from the site.

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