The Law Offices of Frank R. Cruz Reminds Investors of Looming Deadline in the Class Action Lawsuit Against Norfolk Southern Corporation (NSC) - Seite 2

Then, on February 23, 2023, the National Transportation Safety Board (“NTSB”) issued a preliminary report on the derailment, stating it was 100% preventable. And on March 7, 2023, the NTSB announced that it had opened a special investigation into safety practices at Norfolk Southern because the Company had suffered five significant accidents since December 2021, three of which resulted in Company employee deaths.

On March 14, 2023, Ohio Attorney General Dave Yost filed a complaint against Norfolk Southern alleging trespass, nuisance, negligence, open dumping, and water and discharge violations in connection with a series of Norfolk Southern train derailments.

On March 15, 2023, Norfolk Southern’s stock price fell to a low of less than $203 per share – 19% below the price prior to the East Palestine train derailment, thereby injuring investors.

The complaint filed in this class action alleges that throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, Defendants failed to disclose to investors that: (1) Norfolk Southern’s Precision Scheduled Railroading (“PSR”), including its use of longer, heavier trains staffed by fewer personnel, had led to Norfolk Southern suffering increased train derailments and a materially increased risk of future derailments; (2) Norfolk Southern’s PSR was part of a culture of increased risk-taking at the expense of reasonable safety precautions due to Norfolk Southern’s near-term focus solely on profits; (3) Norfolk Southern’s PSR rendered Norfolk Southern more vulnerable to train derailments and train derailments with potentially more severe human, financial, legal, and environmental consequences; (4) Norfolk Southern’s capital spending and replacement programs were designed to prioritize profits over Norfolk Southern’s ability to provide safe, efficient, and reliable rail transportation services; (5) Norfolk Southern’s lobbying efforts had undermined Norfolk Southern’s ability to provide safe, efficient, and reliable rail transportation services; (6) Norfolk Southern’s commitment to reducing operating expenses as part of its PSR goals undermined worker safety and Norfolk Southern’s purported commitment to an injury-free workplace because Norfolk Southern’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 (a/k/a hotboxes) and acoustic sensors; (7) Norfolk Southern’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 Norfolk Southern, its workers, its customers, third parties, and the environment; (8) Norfolk Southern 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 Norfolk Southern train carrying hazardous and toxic materials; and (9) as a result, Defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis at all relevant times.