Did you lose money on investments in Norfolk Southern? If so, please visit Norfolk Southern Corporation Shareholder Class Action Lawsuit or contact Peter Allocco at (212) 951-2030 or pallocco@bernlieb.com to discuss your rights.
NEW YORK, March 17, 2023 (GLOBE NEWSWIRE) — Bernstein Liebhard LLP announces that a securities class action lawsuit has been filed on behalf of investors who purchased or acquired the common stock of Norfolk Southern Corporation (“Norfolk Southern” or the “Company”) (NYSE: NSC) between October 28, 2020 and March 3, 2023, inclusive (the “Class Period”). The lawsuit was filed in the United States District Court for the Southern District of Ohio and alleges violations of the Securities Exchange Act of 1934.
On Friday, February 3, 2023, eastbound NSR general merchandise freight train 32N derailed 38 railcars in East Palestine, Ohio, about a mile from the Ohio-Pennsylvania border, leaving behind what the Associated Press called “a mangled and charred mass of boxcars and flames.” Train 32N was made up of 2 head-end locomotives, 149 railcars, and 1 distributed power locomotive. Although no formal regulatory definition exists, 150 cars is the Federal Railroad Administration’s threshold for classifying a train as “very long.” Train 32N was being operated by just three Norfolk Southern personnel that day: a conductor, an engineer, and a conductor-in-training.
Even though the train was not officially classified as a hazardous material train, which would have required the Company to post and display notification of its cargo, the consist (i.e., the group of rail vehicles which make up a train) included 20 placarded hazardous materials tank cars transporting liquids, flammable liquids, and flammable gas. Among the hazardous materials being transported were vinyl chloride, ethylene glycol monobutyl ether, ethylhexyl acrylate, isobutylene, and butyl acrylate. The derailed equipment included 11 tank cars carrying hazardous materials that subsequently ignited, fueling fires that damaged an additional 12 non-derailed railcars.
According to a subsequent preliminary investigative report about the accident by the National Transportation Safety Board (“NTSB”), the derailment occurred after a wheel bearing on a hopper car (a type of railroad freight car used to transport loose bulk commodities such as coal, ore, and grain) overheated and failed. In this instance, the hopper car contained plastic pellets, and the combination of the hot axle and plastic pellets started an initial fire. Video surveillance from a business 20 miles out of East Palestine showed the axle had been on fire for at least 20 miles before the derailment occurred.
Plaintiff alleges that Defendants made materially false and misleading statements throughout the Class Period. Specifically, Plaintiff alleges that Defendants failed to disclose, among other things: (a) that Norfolk Southern’s Precision Scheduled Railroading (“PSR)”, including its use of longer, heavier trains staffed by fewer personnel, had led to the Company suffering increased train derailments and a materially increased risk of future derailments; (b) that Norfolk Southern’s PSR, including its use of longer, heavier trains staffed by fewer personnel, was part of a culture of increased risk-taking at the expense of reasonable safety precautions due to the Company’s near-term focus solely on profits; and (c) that Norfolk Southern’s PSR, including its use of longer, heavier trains staffed by fewer personnel, rendered the Company more vulnerable to train derailments and train derailments with potentially more severe human, financial, legal, and environmental consequences.
On February 21, 2023, the EPA issued a unilateral administrative order requiring Norfolk Southern to pay for all cleanup actions at the site. EPA Administrator Michael Regan said at a press conference that day in East Palestine that the agency was using its power under the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”) to force the Company to act. “Norfolk Southern will pay for cleaning up the mess that they created and for the trauma that they’ve inflicted on this community,” Regan said. “If the company fails to complete any actions as ordered by EPA, the Agency will immediately step in, conduct the necessary work, and then force Norfolk Southern to pay triple the cost.”
According to the National Transportation Safety Board, the wheel bearing passed three hot bearing detectors prior to the derailment, with the temperature increasing each time. However, the hot bearing detectors would not have notified the crew to stop and inspect the wheel bearing until it recorded a temperature 170 degrees or higher, per Norfolk Southern rules. “It wasn’t until it was 253 degrees Fahrenheit above ambient temperature that [the crew] got a notification that they needed to immediately stop and inspect the hot axle and possibly set out the car.”
Before the market opened on March 6, 2023, the Company announced a 6-part plan to improve operational safety that included, inter alia, adding about 200 temperature sensors along its tracks where existing sensors are at least 15 miles apart, reviewing the temperature levels that set off alarms for train crews, and adding more acoustic sensors that analyze vibrations for potential problems.
On this news, the price of Northern Suffolk common stock declined $5.97 per share to close at $222.42 per share on March 6, 2023.
If you wish to serve as lead plaintiff, you must move the Court no later than May 15, 2023. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. Your ability to share in any recovery doesn’t require that you serve as lead plaintiff. If you choose to take no action, you may remain an absent class member.
If you purchased or acquired Norfolk Southern common stock, and/or would like to discuss your legal rights and options please visit Norfolk Southern Corporation Shareholder Class Action Lawsuit or contact Peter Allocco at (212) 951-2030 or pallocco@bernlieb.com.
Since 1993, Bernstein Liebhard LLP has recovered over $3.5 billion for its clients. In addition to representing individual investors, the Firm has been retained by some of the largest public and private pension funds in the country to monitor their assets and pursue litigation on their behalf. As a result of its success litigating hundreds of lawsuits and class actions, the Firm has been named to The National Law Journal’s “Plaintiffs’ Hot List” thirteen times and listed in The Legal 500 for ten consecutive years.
ATTORNEY ADVERTISING. © 2023 Bernstein Liebhard LLP. The law firm responsible for this advertisement is Bernstein Liebhard LLP, 10 East 40th Street, New York, New York 10016, (212) 779-1414. Prior results do not guarantee or predict a similar outcome with respect to any future matter.
Contact Information:
Peter Allocco
Bernstein Liebhard LLP
https://www.bernlieb.com
(212) 951-2030
pallocco@bernlieb.com
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