||Norfolk Southern Corporation
||United States District Court for the Southern District of Ohio
||The Hon. Michael H. Watson
||October 28, 2020 and March 3, 2023
NSC investors may receive additional information about the case by clicking the link "Submit Your Information" above. If you are a member of the class described below, you may no later than May 15, 2023 move the Court to serve as lead plaintiff of the class, if you so choose.
A class action lawsuit has been filed on behalf of those who purchased or acquired Norfolk Southern Corporation (“NSC”) (NYSE: NSC) common stock between October 28, 2020 and March 3, 2023, both dates inclusive (the “Class Period”).
mon stock between July 29, 2020 and April 27, 2022, both dates inclusive (the “Class Period”).
For several years leading up to the beginning of the Class Period, NSC took a number of measures which put profits and executive compensation over safety. For example, in October 2018, NSC adopted “Precision Scheduled Railroading” or “PSR” which was purportedly aimed at producing better service at a lower cost. In actuality, the company sought to increase revenues by cutting operating costs including reducing staff, running fewer, heavier, faster trains and optimizing the company’s networks in order to increase efficiency. NSC also began tying executive compensation to achieving PSR goals. For example, in 2021, multiple NSC executives received millions of dollars in cash bonuses for reducing costs by achieving “record performance for train length and weight.” Industry critics have warned that this type of compensation system incentivizes executives to cut costs at the expense of safety and also leads to longer and more dangerous trains which “have greater damage done, greater, larger pileups, fires and so on.” At the same time, NSC and its lobbyists played a key role in defeating an Obama-era safety rule that was used following a number of oil train accidents, including the “ECP Brake Rule” which was ultimately repealed in 2018.
On February 3, 2023, a Norfolk Southern Railway Company freight train derailed 38 railcars in East Palestine, Ohio, leaving behind what the Associated Press called “a mangled and charred mass of boxcars and flames.” The derailed equipment included 11 tank cars carrying hazardous materials that subsequently ignited, fueling fires that damaged an additional 12 non-derailed railcars.
On February 6, 2023, responders engaged in a controlled detonation and burn of the vinyl chloride, spewing massive volumes of chemicals into the vicinity. The chemicals released from the derailment entered the air and water of the surrounding residential areas, the closest of which were only 1,000 feet from the site of the accident. Following this news, the price of NSC stock fell on February 6, 2023, closing at $246.46 per share – down $5.66 per share from its closing price of $252.12 per share on Friday, February 3, 2023.
Then, on February 8, 2023, after lifting a previously issued evacuation order, Ohio Governor Mike DeWine stated that NSC was “the one who created the problem. It’s their liability. They’re the ones who ought to pay for it.” Following their return, numerous residents reported hazardous air quality and other health and environmental concerns. In response, the price of NSC stock fell on February 9, 2023, closing at $238.98 per share – down $7.64 per share from its closing price of $246.62 per share on February 8, 2023. Thereafter, NSC’s stock price continued to drop in response to several other reports and public officials who spoke out about NSC’s liability for all of the harm and damage it had caused.
On March 4, 2023, another NSC freight train derailed near Springfield, Ohio. Finally, on March 6, 2023, NSC announced a 6-part plan to improve operational safety that included, among other things, adding about 200 temperature sensors along its tracks, reviewing the temperature levels that set off alarms for train crews, and adding more acoustic sensors that analyze vibrations for potential problems. Following this news, the price of NSC stock fell again on March 6 and March 7, 2023, closing at $215.18 per share – down $13.21 per share from its closing price of $228.39 on Friday, March 3, 2023.
The complaint alleges that, throughout the Class Period, Defendants made false and/or misleading statements and/or failed to disclose that: (1) NSC’s PSR, including its use of longer, heavier trains staffed by fewer personnel, had led to NSC suffering increased train derailments and a materially increased risk of future derailments; (2) NSC’s PSR was part of a culture of increased risk-taking at the expense of reasonable safety precautions due to NSC’s near-term focus solely on profits; (3) NSC’s PSR rendered NSC more vulnerable to train derailments and train derailments with potentially more severe human, financial, legal, and environmental consequences; (4) NSC’s capital spending and replacement programs were designed to prioritize profits over NSC’s ability to provide safe, efficient, and reliable rail transportation services; (5) NSC’s lobbying efforts had undermined NSC’s ability to provide safe, efficient, and reliable rail transportation services; (6) NSC’s commitment to reducing operating expenses as part of its PSR goals undermined worker safety and NSC’s purported “commitment to an injury-free workplace” because NSC’s PSR plan prioritized reducing expenses through fewer personnel, longer trains, and less spending on safety training, technology, and equipment such as hot bearing wayside detectors and acoustic sensors; (7) NSC’s rail services were, as a result of its adoption of PSR principles, more susceptible to accidents that could cause serious economic and bodily harm to NSC, its workers, its customers, third parties, and the environment; and (8) NSC had failed to put in place responsive practices and procedures to minimize the threat to communities in the event that these communities suffered the derailment of a NSC train carrying hazardous and toxic materials.
A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member’s claim is typical of the claims of other class members, and that the class member will adequately represent the class. Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. Filling out the online form above or communicating with any counsel is not necessary to participate or share in any recovery achieved in this case. Any member of the purported class may move the court to serve as a lead plaintiff through counsel of his/her choice, or may choose to do nothing and remain an inactive class member.
If you wish to discuss this action or have any questions concerning this notice or your rights or interests with respect to these matters, please contact Kessler Topaz Meltzer & Check, LLP: Jonathan Naji, Esq. (484) 270-1453 or via e-mail at firstname.lastname@example.org. If you would like additional information about the suit, please click on the link "Submit Your Information" above and fill out the form as promptly as possible.