(The following article by Christopher Dinsmore was posted on the Virginian-Pilot website on January 25.)
NORFOLK, Va. — Norfolk Southern Corp., the nation’s fourth-largest railroad, estimates it will have first-quarter pretax costs of between $30 million to $40 million stemming from the Jan. 6 derailment in Graniteville, S.C.
The company said it expects to have adequate insurance to cover potential claims or settlement. The cost estimate doesn’t include any fines or penalties that might be imposed, the Norfolk-based company said in a statement released Monday.
Late last week, a South Carolina law firm, with a national reputation for its aggressiveness, filed a lawsuit against Norfolk Southern and others, seeking relief for people who suffered property damage from the train wreck and chlorine spill.
Besides Norfolk Southern, the suit named Union Tank Car Co., which built and owned the tank car that ruptured; Olin Corp., which produced and shipped the chlorine; and Benjimin Aiken , Mike Ford and James Thornton, the railroad workers who allegedly failed to reset the switch, which caused the deadly accident.
The firm, Motley Rice LLC, filed the suit Friday in the Aiken County Court of Common Pleas. The suit is seeking class-action status naming Jessica Curtis, Shelton Davis and “all others similarly situated” as the plaintiffs.
The suit is one of several filed in Aiken seeking damages for the Graniteville accident, which claimed nine lives and hospitalized about two dozen others. A bout 550 people were treated for chlorine exposure.
“Our community welcomed and trusted the railroad, but now our community is damaged and citizens need immediate help in the clean-up and replacement of their property,” said Joe Rice, a founding member of Motley Rice, in a statement.
Based in Mount Pleasant, S.C., Motley Rice describes itself as one of the nation’s largest plaintiff’s litigation and transportation-disaster firms. Rice orchestrated the $248 billion settlement by tobacco companies with 26 states. The firm filed a $1 trillion class-action suit on behalf of the victims of the Sept. 11, 2001, terrorist attacks against Saudi Arabians who allegedly financed al-Qaida.
Locally, representatives from the firm met last week with residents of Wingfield Pointe, the Chesapeake subdivision built partially atop an illegal dump operated during the 1960s and 1970s.
“The railroad, the tank car company and the manufacturer and shipper of the chlorine all have the obligation to ensure that in working in, and passing through, our community and state they do not harm our property,” said W. Mullins McLeod Jr., a Charleston, S.C., attorney, who is representing the plaintiffs with Motley Rice.
To assist and reimburse Graniteville residents following the accident, Norfolk Southern established a local assistance center in nearby Aiken, S.C.
That center was moved to Graniteville last week as the evacuation of the small mill town ended.
The center has written thousands of checks to the displaced to pay for evacuees’ expenses and has begun turning its attention to property and personal injury claims.
“Our lawyers are reviewing that lawsuit right now,” said Susan Terpay, a spokeswoman for Norfolk Southern.
The Motley Rice suit seeks an immediate cleanup program for everyone in the vicinity of the train accident with property damage. Buildings and houses need to be cleaned, repainted, re-wired and inspected; personal property needs to be cleaned, repaired or replaced, the firm said in its press release.
“This community needs help now,” Rice said as part of the statement.
The release by Norfolk Southern, issued after the markets closed, was its first estimate of the accident’s impact on the company’s finances.
Shares of Norfolk Southern closed Monday at $33.31, down $2.01.
Bloomberg News contributed to this report.