Looking Back and Looking Forward: What Has Happened in the Year Since the East Palestine Train Derailment

by Shari Domow Bacsardi and Dillon Redding and Joshua Wabnik

Shari B. Domow Bacsardi is a partner in Womble Bond Dickinson’s capital markets practice group. Domow Bacsardi represents lenders and lessors in all aspects of equipment finance transactions with an emphasis on transportation assets, including aircraft (corporate and commercial), rail equipment, locomotives and railcars, vessels (barges and tankers) and specialty assets.

Dillon A. Redding is Of Counsel at Womble Bond Dickinson’s capital markets practice group. Redding also represents lenders and lessors in equipment finance transactions with an emphasis on transportation assets, such as aircraft, rail equipment, vessels and other assets.

Joshua Wabnik is an associate in the Womble Bond Dickinson’s Capital Markets group. His practice focuses on commercial finance transactions including equipment finance transactions.

In the year since the East Palestine train derailment, rail safety has been a hot button issue in the United States. After the East Palestine derailment dominated news headlines in late February and March of 2023, there seemed to be a consensus among government and industry decisionmakers that changes had be made in the rail industry.

In the year since the East Palestine train derailment, rail safety has been a hot button issue in the United States. After the East Palestine derailment dominated news headlines in late February and March of 2023, there seemed to be a consensus among government and industry decisionmakers that changes had be made in the rail industry. We wrote last year about potential changes, both regulatory and within the rail industry, that could arise as a result of the tragedy. However, while rail industry and government actors have both taken some steps to improve rail safety in the months that have passed since March 2023, the significant industry-shifting reforms that many predicted have thus-far proven slow to develop. In this article, we will provide a survey of the actions taken by the railroad industry and the government since the East Palestine derailment, along with our predictions regarding additional actions to be taken by the government and Class I railroads.

On February 3, 2023, 38 railcars derailed on a Norfolk Southern rail line near East Palestine, OH. Eleven of the derailed cars contained hazardous chemicals, including vinyl chloride, a flammable gas. In the aftermath of the derailment, several of the derailed railcars caught on fire. The fire continued for several days and, when temperatures began to rise in a railcar carrying vinyl chloride, East Palestine residents close to the derailment site were evacuated and the derailed cars were set ablaze in a controlled burn in an effort to prevent a massive explosion. The explosion released large amounts of smoke and waste into the atmosphere. Although the area surrounding the derailment was cleared for residents to return soon after the controlled burn subsided, many residents complained of health issues upon their return home. In the months and weeks since, Norfolk Southern has invested heavily in the East Palestine community, offering a “community support fund” for residents affected by the derailment, reimbursing first responders and businesses for damages incurred as a result of the derailment, and creating a compensation plan for residents whose homes lost value due to the incident. Despite this investment, Norfolk Southern remains the subject of several lawsuits from governmental agencies, East Palestine residents and businesses, all seeking additional funds related to the fallout from the derailment.

Government Actions

Since the East Palestine derailment, the U.S. Department of Transportation (the DOT) has taken several steps to improve rail safety across the country. In 2023, the DOT deployed a “historic” amount of funding for infrastructure related programs throughout the U.S., many of which are aimed specifically at increasing rail safety. Through the first ever Railroad Crossing Elimination Program, the DOT awarded $570 million to either eliminate or provide safety improvements to more than 400 railroad crossings across 32 states. Moreover, through the Consolidated Rail Infrastructure and Safety Improvements program, the DOT awarded $1.4 billion to 70 different projects, each of which aims to make rail travel safer, more efficient and/or more reliable. For example, the DOT pledged more than $201 million to be used for the design, acquisition and construction of six railroad crossings in California, aiming to remove seven existing at-grade crossings and replace them with new grade-separated crossings.

In addition to the actions taken by the DOT, the Federal Railroad Administration (the FRA) has taken several affirmative steps to ensure that railroads are complying with existing safety regulations. Firstly, the FRA conducted several focused inspection programs over the course of 2023, including a review focused on tank cars that transport hazardous materials. The FRA also completed field work for a program focused on assessing routes taken by high hazard flammable trains (HHFTs). Although the train that derailed near East Palestine was not a HHFT, as the train was not carrying enough hazardous material to meet the current HHFT definition, increased HHFT inspections should play a large part in preventing future derailments. In addition, there has been some discussion, in connection with potential new legislation, of a broadening of the definition of HHFT to include more trains, although the extent to which the definition would be broadened is not clear at this time.

In connection with the HHFT route assessment program, the FRA inspected more than 40,000 railcars, more than 76,000 miles of track, and thousands of wayside detectors across 25 different railroads. The FRA also conducted an additional assessment of the safety, culture, practices and regulatory compliance of Norfolk Southern, the owner of the railcars that derailed in East Palestine. In the coming months and years, the FRA plans to conduct a similar assessment for each Class I railroad. Finally, the FRA has continued to press all Class I railroads to join the Confidential Close Call Reporting System, in hopes of enabling railroad employees to better identify and prevent safety issues. As of today, Norfolk Southern has committed to joining a pilot test of this program, but no other Class I railroad has taken definitive action.

Both the DOT and the FRA have stated their ongoing commitment to the issuance of safety advisories regarding best practices for railroad operators and to lobbying efforts for increased rail regulation. For example, since the East Palestine derailment, advisories have been issued regarding long trains, train makeup, tank car covers, tank car types, hot bearing detectors and roadway maintenance. As part of these advisories, and as we noted last year, the FRA and DOT continue to urge railways to adopt DOT 117 compliant railcars. As of September of 2023, DOT Survey results indicated that 6,914 DOT-117 and DOT-117R tank cars were projected to be built or retrofitted in 2023. These results indicate a continued commitment by the rail industry to put DOT-117 complaint railcars into use, in accordance with DOT and FRA policy. The 2015 Fixing America’s Surface Transportation (FAST) Act requires owners of tank cars that carry Class 3 flammable liquids to place all such tank cars in compliance with DOT-117 requirements by 2029 and, as such, it is unlikely that demand for DOT-117 or DOT-117R railcars will subside anytime soon.

Actions Taken by Industry Actors

In addition to the actions taken by governmental actors, the rail industry itself has taken several steps to improve freight rail safety in the time since the East Palestine derailment. Class I railroads have increased the frequency of hot bearing detectors across “key routes” and have lowered the temperature threshold for what constitutes an overheated bearing in efforts to identify possibly defective bearings before failure occurs. In addition, members of the Association of American Railroads are working to develop uniform recommendations to identify bearings that may cause issues in the future. These steps are particularly important in light of the East Palestine disaster, as an overheated bearing was the cause of the derailment. In another effort to improve railcar safety, the Association of American Railroad’s Tank Car Committee issued new recommendations for bottom valve protection requirements to better ensure the safety of tanks cars (many of which carry hazardous and/or flammable material). This said, such recommendations are not binding on the members of the Association of American Railroads, and there are no incentives for adoption nor deterrents for non-adoption.

Class I railroads have also committed to increasing the ability of first responders to respond to train related incidents. Class I railroads trained more than 35,000 first responders in 2023 and have greatly increased the amount of first responders with access to software that provides real-time information on railcars, their contents and any requirements for safe handling of the contents of railcars. Under the current system, the State of Ohio was not informed of the presence of the train that derailed near East Palestine, as the train was not categorized as a HHFT. Using the new software, it is likely that first responders throughout the state would have been aware of the train’s presence and able to track the train as it made its way through the state.

Increase in Derailments

Despite these actions, derailments rose for the top five largest railroads in the first 11 months of 2023 as compared to the first 11 months of 2022. In March 2023, two major train derailments occurred within 12 hours, one Canadian Pacific train derailing outside of Wyndmere, ND, releasing hazardous materials in the process, and one Union Pacific train derailing in San Bernadino, CA. Also, in March 2023, a BNSF Railway train derailed outside of Raymond, MN, spilling ethanol and corn syrup, catching on fire and causing Raymond to be evacuated. Finally, in November of 2023, a CSX train derailed in Rockcastle County, KY, resulting in a large spill of hazardous molten sulfur chemicals. This derailment happened soon after a similar CSX derailment in Atlanta, GA. It is possible that 2023 may prove to be an outlier (according to the American Association of Railroads, the train accident rate per million train-miles has dropped 23% since 2000 and, in that same period, the hazardous materials train accident rate has fallen 73%). However, should 2024 see a similar level of derailments, it could suggest a growing trend that will continue to garner increased attention by lawmakers.

What Can We Expect Moving Forward?

Immediately after the East Palestine derailment, there was initially strong bipartisan support for the Bipartisan Railway Safety Act, a major piece of legislation that would impose several reforms on the rail industry. Today, the act has stalled in Congress and has yet to be put up for a vote in the Senate. This delay is partially due to lobbying from the rail industry, which opposes key provisions of the bill, such as an increase the required number of workers on trains, an expansion of hazmat transportation operating requirements, and a broadening of required manual inspections. The Association for American Railroads has claimed that such changes are unnecessary and will not meaningfully contribute to increased rail safety. Finally, partisan gridlock in Congress and the 2024 election cycle have likely contributed to the slow-down in regulatory activity. Despite these barriers, we predict that there could soon be a renewed push to pass the Bipartisan Railway Safety Act and, thus, a renewed drive from railcar owners and purchasers to ensure that railcars are DOT-117 compliant. The increase in derailments in 2023 and the lack of interest shown by Class I railroads in helping to develop the Confidential Close Call Reporting System are two factors that make this a strong possibility.

We also expect that railcar financing sources will continue to focus increased attention on ensuring that railcar lessees are responsible for government mandated modifications (both during the term of the lease and, in some cases, shortly after the return of the railcars upon the conclusion of the lease term), in the event that significant or costly modifications are required by any future legislation.

We also predict that the FRA and DOT will continue to aggressively pursue rulemakings dealing with train safety. Notably, we expect these agencies to continue pushing for the “two-crew rule” (a rule that address minimum requirements for train crews), rules expanding hazardous material notifications and, possibly, new/enhanced certification programs for signal and dispatch railroad workers. As noted above, we expect these rulemakings to continue to face significant resistance from the rail industry, due to the potential high cost and inefficiency of implementing reforms.


In the year following the East Palestine derailment, private and governmental actors have begun to take incremental steps to improve rail safety. The FRA and DOT have increased rail safety related spending in an effort to decrease the potential for rail-related incidents in the future. The rail industry has also taken several steps to operate more safely, including expanding detection programs for potentially faulty railcar parts and first responder resources and training. Despite these positive steps, the push to implement sweeping reforms appears to have stalled, at least until the conclusion of the 2024 election season. Nevertheless, we expect to eventually see a renewed push by Congress to pass the Bipartisan Railway Safety Act, a push that will continue to hasten the rise of DOT-117 compliant railcars.”

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