The following is a rushed transcript and may contain errors. A proofread version will be made available as soon as possible.

Maximillian Alvarez:

Welcome everyone to the Real News Network podcast. I’m Maximillian Alvarez. I’m the editor in chief here at The Real News, and it’s so great to have you all with us. It’s been three years this week since a Norfolk Southern bomb train carrying toxic chemicals derailed in the small town of East Ade Ohio. On the frigid night of February 3rd, 2023, three days later, Norfolk Southern pressured local authorities to make the disastrous and completely unnecessary decision to vent five giant carloads of vinyl chloride into a ditch and set it on fire, releasing a massive black death plume into the air exposing residents in East Palestine in the surrounding areas to deadly toxins in one of the worst industrial disasters in US history. Now as you guys know, I’ve been interviewing and filming with residents in and around East Palestine pretty much nonstop for the past three years, and it’s been frankly one of the most devastating stories that I’ve ever covered.

The people there have had their lives forever turned upside down. They and their families are still getting sick. Many have been financially ruined. They have been abandoned by their government and by Norfolk Southern and forgotten by the public. And as Katya Schwank details in a blockbuster new report for the Lever, residents are still waiting for the restitution that they were promised from the $600 million settlement that Norfolk Southern agreed to pay to resolve residents class action lawsuit over the derailment. As Schwank reports, east Palestine residents are still waiting on restitution from the settlement, which was touted as historic by the deep pocketed lawyers who negotiated it. Nearing the three-year anniversary of the derailment, the railroad lawyers and myriad companies involved in the settlement have all been paid. While many residents have yet to receive anything, the settlement has been mired by delays in scandal. Many checks first promised in 2024 have yet to arrive the class action lawyers who have already collected their $180 million cut of the total face allegations in court that they misled clients into accepting poultry sums.

The private equity backed company responsible for doling out cash to residents has allegedly misallocate over $17 million and wrongly denied thousands of claims all while carving out millions in fees from the settlement. As a result, payouts have been delayed for months, leaving residents in the dark about when or if they will see any kind of justice for a disaster that upended their lives and whose long-term impacts on the town and their health remain unknown as the Trump administration acts as regulations meant to prevent chemical and climate disasters and companies like Norfolk Southern Face reduce scrutiny for corporate negligence. Civil cases like this take on an evermore central role in whatever process remains for accountability, but at least in East Palestine, that system is leaving residents behind. To dig into all of this, I’m honored to be joined today on the Real News Podcast by Katya Schwank herself, reporter for the Lever, and author of this blockbuster new report, which is titled The Derailment That Never Ended. Katya, thank you so much for joining me today on The Real News, and thank you so much for this vital report. I wanted to ask you to pick up where I left off from the passage that I just read. Please break down for listeners what the hell has happened or not happened with this supposedly historic settlement over the East Palestine train derailment and chemical disaster.

Katya Schwenk:

Yeah, thank you so much for having me on. And I think trying to understand how badly this settlement has failed residents in the town to understand what really went wrong here I think is such an important story to tell. And in telling it, I came to understand quite a lot about just how our system is really set up to fail people in East policy. But so I guess we can start with sort of the way the settlement deal was struck. Originally, the settlement was announced in April, 2024. This is just over a year after the derailment itself happened, and that’s a very quick timeline for a settlement in this kind of case. That doesn’t necessarily mean that it was bad or that it was less than it could have been, but I think it’s important to recognize how fast this deal was struck and the fact that the lawyers who made this deal had a big incentive to make a quick deal with Norfolk Southern to not take the case to trial.

And that’s because they get paid at the time that any kind of deal is made. And in this case, I think many of us saw the headlines, many of us who weren’t following class Action lawsuit after the Dement closely. I may have seen these headlines of $600 million Norfolk Southern has agreed to pay. It’s obviously we made a lot of money, but what was missing was that 180 million of those $600 million, which is meant to go to residents of East Policy and surrounding towns, anyone within a 20 mile radius of the Norfolk Southern train that derailed there was supposed to get a cut of this check, but 180 million, about a third is going to the lawyers who negotiated from Wall Street. So that’s just to begin with. And then after that, I looked at what has happened to the rest of that money, and it really is the tale of justice that has been, I really think robbed for people in East Palestine.

There are a myriad of things that went wrong in distributing these settlement checks. For one, the lawyers hired a private company Kroll to distribute the checks. This is a company that I found was backed by private equity. It was outsourcing much of its work to people in workers in India with little oversight in order to reduce its costs. This contributed to huge problems with its claims review process. So it was denied wrongly denied hundreds of claims of people in East Palestine. It was handling the money, it was charging millions of dollars in fees to the settlement. So this is another chunk of money that Cruel is going to pay back some of this money, but not all of it. So the lawyers take a big cut, this third party company takes a big cut. There are other companies they write about that are taking a big cut.

Everyone is sort of jostling to get their cut of this money that really should be going to residents, and that may have been an insufficient amount to begin with. Meanwhile, this is barely makes a dent in Norfolk Southern’s profits. And I think the last thing that’s really important to understand about the way this class action lawsuit and the settlement has failed people is the way that information about the health effects and health consequences of the derailment was handled by the class action lawyers and was concealed from the people of East Palestine. And as part of this lawsuit, lawyers brought in these third party experts that did lots of testing. They tested the air in East Palestine, they tested the soil, they tested the water, they tested people’s wells, I believe. But all of that information that was collected by these experts remains sealed in court documents.

People have still have not been able to access this information even though it could provide a critical look into what the health consequences may be of the derailment. And I think that all of this has contributed to a real failure of people, a sense that justice is never coming. People are still waiting on their checks, people are getting checks that are much lower than they were promised by their attorneys. And people are still asking what you know about the health consequences of the derailment. And yeah, I think it’s just such an important story to tell and to continue to talk about. Now that we’re coming up on for your anniversary,

Maximillian Alvarez:

I want to talk about the health effects piece for a second because there’s no way that you can report on this story without hearing dozens and dozens if not hundreds of heartbreaking, infuriating stories from residents about how they’re still getting sick, their kids are getting sick, their parents are getting sick, they’re having to leave their homes, they can’t go back into their home without getting sick. They’re stuck paying a mortgage on a home that they can’t be in. I mean, I’ve heard so many versions of this same horrifying story at the same time, people three years later are still saying, I don’t know how safe it is to be in my home.

Norfolk Southern hasn’t tested inside my home, the EPA or the CDC, the people who showed up to test inside my home told me it was fine, and then they got sick and ran away. I mean, this is the kind of kafkaesque reality that working people in this area have been living in for three years now. And like you said, even the research that has been done is not made available to the people who are the subjects of that research. And this plays a critical piece in the class action settlement, which you write about in this piece, you actually say quote, for East Palestine residents, whether or not to opt into the personal injury payout was an agonizing decision. I wanted to ask if you could unpack that and explain why from the perspective of residents, what was really hanging in the balance when folks were deciding whether or not to opt into this lawsuit, let alone, I mean, setting aside the kind of just BS that has transpired after the settlement and getting people their actual payments.

Katya Schwenk:

Yeah, no, it’s so important. It’s such an important part of this story. So in order for people, residents of East Policy and people within 10 miles of the derailment site, in order for them to get another cut of money called the personal injury payout by the Class Action lawyers, in order to get the money that they were owed from the settlement, they had to sign away their claims against Norfolk Southern sign away their right to sue Norfolk Southern in the future for any health conditions that were to develop. So if someone were to get cancer a decade, two decades down the line, if they signed up for this settlement now, they would not be able to sue Norfolk Southern, even though Norfolk Southern legally would have to pay, would owe them the costs of their medical bills, owe them damages for the impact that it had on their lives.

So I think people were really, they were faced with this impossible decision of you can have this money now only if you agree to never sue Norfolk Southern down the line to never if you were to develop a serious illness later on. And the lawyers really wanted people to sign up for the settlement because that was how if the deal didn’t go through, then they wouldn’t get their money either. And so they were very invested in telling people, you’re not going to get cancer. The health risks are very low. They brought in an expert, a third party expert to tell residents this, to try to convince them to sign away their right to sue Norfolk Southern. But it seems to, I think many people, and I talk to people, both residents outside scientists who’ve been in the town, that much of this was misinformation on the lawyer’s part to try to convince people that the risk to their health was low, when in fact they didn’t have the evidence to prove that.

Maximillian Alvarez:

I want all of you listening to just recall the conversations that we’ve had with residents over the years, recall the kind of position that they have been in. Like I said in the intro, people have been financially destroyed by this. People we’ve interviewed have tens of thousands of dollars of medical bills that they can’t pay because they lost their jobs because they got so sick they couldn’t work after the derailment. Stories like that are all over this area of Ohio and Pennsylvania. And so when you are in that desperate of a situation and you are being told you can get a couple thousand dollars that you desperately need now, but you need to sign away your right to claim more damages in the future, and when you develop this cancer or that ailment or whatever, that is the sort of barrel of a gun decision that people have had to make. And on top of that, Katya, you also detail in this the way that the class action dynamic worked to pressure residents to have to buy into this settlement at the risk of the entire thing kind of falling apart. And I wanted to ask if you could sort of explain that a little bit for listeners while we’re on the subject.

Katya Schwenk:

Yeah, absolutely. So when the Class Action lawyers and Norfolk Southern came to a deal came to decide on the settlement, Norfolk Southern demanded that there be a clause basically that if not enough people signed away their rights to sue Norfolk Southern down the line, then the whole deal would fall apart. And you can imagine why Norfolk Southern has an interest in this, because they were worried that people would start getting sick and people have started getting sick, and they would be faced with tons of really costly lawsuits down the line as other companies who have poisoned communities or had poison like Johnson and Johnson with the It’s poisonous baby powder, have faced many, many, many costly lawsuits, and they’re trying to escape this kind of liability. So Norfolk Southern was very concerned that the same thing would happen in East Palestine. And so they got a clause into the settlement that, like I said, would make it so the settlement would fall through if not enough people signed away their rights to sue them.

This created a situation where the lawyers wanted to make sure that many residents, enough residents signed up for this deal so they could get their money. And of course, they were saying, we don’t want this seal to fall apart because so many people in East Palestine and surrounding towns are experiencing financial instability. And I talked to people who a $25,000 check, which is what many people were promised, was a life-changing that is a life-changing amount of money. That is something that’s really hard to turn down. Even if you were to get cancer down the line could be you could sue Norfolk Southern for like a million dollars, right? $25,000 in the scheme of things is actually quite low for the kinds of health risks that people were facing. So there was quite a lot of pressure from the class action lawyers to get people to go along with this. And that led to this sort of campaign of misinformation of telling people that the risks were not in fact high and that they should take the $25,000 check now, or that they would be putting the settlement at risk for everyone involved.

Maximillian Alvarez:

I mean, just to add even more social and human context, what I heard when I imagine you heard the same thing, Katya from a lot of residents was like, it got really ugly in town because people who were wanting their money were pressuring and bullying people who were resisting signing away their rights, even if everyone needs the money. But this class action situation basically had everyone at each other’s throats. And that feels almost by design, because everything that has happened since the derailment has effectively pitted different people in town against one another. And it’s been devastating to the social life of that town. But just imagine you’re living in that town, you know, need the money, but you’re worried that you’re going to have way more healthcare costs in the future. And so you’re trying to make the decision about whether or not to opt into this lawsuit and you neighbors are pressuring and bullying you and treating you terribly to basically get you to sign those rights away because they want their money.

That’s also part of the pressure cooker situation here. And Katia, it’s just, I can’t sit and think about it too long because I get so mad that I don’t know what to do. But the amount of people who have taken advantage of the residents in and around East Palestine, the amount of people who have exploited this situation for their own gain, whether it’s media outlets just parachuting in for a sensationalist story and then leaving, whether it’s politicians, Democrat or Republican, parachuting in making a point of saying, oh, we’re going to help you. We’re going to help you. And then they leave and they don’t do shit. And now even the lawyers that people thought were going to help them get restitution are bleeding them dry and taking their settlement money. And I wanted to ask if you could just talk a little bit more about that situation with the lawyers involved, the sort of third parties that have gotten involved in this. I don’t think your average listener will have any idea about how these cases work. So I wanted to ask if you could just unpack that a little more and talk about how the way that system and the way it’s set up has actually created this monstrous situation where the lawyers are getting paid, but the residents are still waiting for their checks.

Katya Schwenk:

Yeah, no, this is that. I think the very heart of the story that I think it’s important to remember or to think about what residents were hearing from lawyers when they first arrived to town shortly after the derailment. I mean, dozens and dozens of lawyers came in, many from out of state. They were promising money, they were promising justice. One of them, one of the law firms was called East Palestine Justice Giant Banners with that promise everywhere they held a town hall, they brought in Aaron Brockovich, the star, the real life woman who the movie was based on to sort of serve as a figurehead for the cause of maybe the EPA has failed you. Maybe the Biden administration and the Department of Transportation have failed you, but we are here to fight for you and get justice. That was the tagline of every single law firm that swarmed town.

And again, there were so many law firms all sort of fighting each other to get in on this settlement because they knew that they could get a lot of money. They saw millions and millions of dollars in this, and they saw it for themselves. They were like, we can make a lot of money. Our law firm can make quite a lot of money off of this. And it wasn’t just the law firms, but as I write, it was also these other companies that work with law firms on these big valuable cases. One perfected claims is a company that will come in after disasters and partners with law firms and makes money off of signing up people as plaintiffs or signing up people, helping them sign up for a big settlement. Like I mentioned, the company that was eventually in charge of sending out the settlement checks to people reviewing people’s claims, that was another company.

So there are all of these companies on the periphery that when they see this kind of valuable legal case will come in and try to make a buck. And so that’s really what happened. Companies, lawyers, swarming East Palestine, and as I said, the way this works is that when the deal is signed, that’s when the lawyers get paid. That’s when many of these companies get paid. And so after that, they don’t have much interest in making sure people get their checks, that people are getting a fair amount of money, that another company isn’t totally mishandling the tens of millions that they have. And so that creates a situation where, as I was talking to people about it and when I was there, it’s hard not to think of as vultures. They’re kind of coming in trying to get their money and then leaving as soon as they make that happen. So yeah, I mean, it’s really bleak and it’s really a sad thing the way people have been left behind.

Maximillian Alvarez:

It is. And I think vultures is the most accurate term and the even more horrific point here, which you guys at the Lever have been hammering. We here at the Real News have been hammering is like, it’s not just East Palestine. East Palestine is sadly horrifically, not an aberration. Like corporations in the government are turning more and more of the United States into a sacrifice zone, and more and more of us are being effectively set up for sacrifice. If we do nothing about this, our future looks a lot like East Palestine looks right now. And I need people to understand that. And we need to learn from what is happening there about what will happen to you if a train derails in your backyard, if a poking plant explodes in your neighborhood. I mean, if a gas spill or a gas leak happens in your vicinity, this is the playbook that you’re going to be up against.

And so what every East Palestine resident has told me and told you all listening in the interviews we published is Don’t wait till it happens to you, because by then it’ll be too late. Be proactive and take steps to work with your community to make sure that you’re prepared. And I wanted to sort of end on that note, Katya, I know I got to let you go here in a minute, but I wanted to end on the where do things stand now and what can be done about this. And so I know that there are plenty of those questions that we can’t actually answer right now, but I wanted to ask, what can we answer at this moment? What can be done about this horrific situation and what possibly can people listening to this do to make sure that the people in and around East Palestine get some semblance of justice for Christ’s sake?

Katya Schwenk:

Yeah, yeah. Well, I’ll say that I think I really learned from speaking to resonance there about the ways people in East Palestine, many are connecting with other communities that have experienced these kinds of disasters. Places like Coner, Georgia or Roseland, Louisiana. Places where there was similar, and these disasters are, there are a direct result of a total lack of accountability for corporations, a total ineffectiveness of the government, a total failure of them to intervene, but that has not prevented resident peace Palestine from working in solidarity with people in other places that have experienced these kinds of disasters coming together. And to your point earlier about the ways that these lawyers officials really created and fomented this distrust set people against each other in East Palestinians because they know that they knew that that would help their own interests. That if people really banded together, that would be a threat to them.

I think. So I was really inspired by residents who are working against that, who are building these bridges within their community and with other communities affected in this way. That was really inspiring to me. I don’t feel particularly hopeful about the future of transportation regulation or the idea that Norfolk Southern is going to be held accountable by the government, at least I would love to see it. I don’t think we’re in that kind of moment right now, but I think I was really inspired by the strength of the community and just grassroots resistance. That’s sort of what I find most hopeful, and that was the most hopeful thing I encountered in reporting this story. You can read more of our work@levernews.com. We’re going to be continuing reporting on East Palestine and the ways that corporate misconduct, corporate power are impacting all facets of our lives. So yeah.

Maximillian Alvarez:

Alright, gang, that’s going to wrap things up for us today. Thank you so much for listening to this episode of the Real News Network podcast. If you want to hear more important conversations and coverage just like this, then we need you to become a supporter of The Real News now. Share this podcast with people in your circles, your friends, your family, your coworkers. Sign up for the Real News newsletter so you never miss a story, and go to the real news.com/donate and become a supporter today. I promise you guys, it really makes a difference for the Real News Network. This is Maximillian Alvarez signing off from Baltimore. Take care of yourselves and take care of each other.