FILE - Debris from a Norfolk Southern freight train lies scattered and burning along the tracks on Feb. 4, 2023, the day after it derailed in East Palestine, Ohio. A federal judge has signed off Tuesday, May 21, 2024, on the $600 million class action settlement over last year's disastrous Norfolk Southern derailment in eastern Ohio, but many people who live near East Palestine are still wondering how much they will end up with out of the deal. (AP Photo/Gene J. Puskar, File)

YOUNGSTOWN — Federal Judge Benita Pearson granted preliminary approval to the $600 million settlement between Norfolk Southern and class action plaintiffs, calling the deal “fair, reasonable, and adequate” in court documents Wednesday.

Pearson’s approval now opens the door for the claims process to begin, and residents impacted can decide whether to participate or not. Once the claim process is complete — all of the packets and paperwork collected — awards will be determined and checks could be sent out as early as the end of this year or beginning of 2025.

The settlement is meant to compensate residents who live or work within 20 miles of last year’s Norfolk Southern freight train derailment and intentional vent-and-burn of 1.1 million pounds of vinyl chloride. Businesses within 20 miles are also eligible class members.

“We know many residents, employees and business owners have questions about this process. We want them to know we hear you,” lead counsel Seth Katz, Jane Conroy and T. Michael Morgan said in a joint statement. “Lawyers for the class will be in the community several times over the coming weeks and months to answer questions and assist eligible class members with their claims.”

The settlement is structured by three classes — those who live or work closest to ground zero (where the train actually derailed) and those who live 10 to 20 miles away and business owners within 20 miles who can prove financial losses from the rail disaster.

Awards to those who live 10 miles or closer will be determined by an allocation system that will consider and give weight to certain criteria. Considerations include geographic proximity, household size, number of children in the household, relocation mandates, missed work and length of displacement. Kroll Settlement Administration, LLC was chosen as the settlement administrator who will determine the allocation formula and fixed amounts.

Residents within the 10 miles will also be able to file personal injury claims for potential health ailments suffered as a result of the derailment and chemical release.

Awards will be determined only after all forms have been processed, but residents must opt-in the settlement before individual settlement amounts are decided. Residents also must opt-out if they do want to participate in the class-action settlement and reserve the right to sue Norfolk Southern on their own at a later date. The deadline to file a claim and receive part of the settlement is Aug. 22 with the final approval hearing on or about Sept. 25.

Pearson still has to decide the amount the attorneys who brokered the deal are to receive from the $600 million. In the motion filed last month asking for preliminary approval, the lawyers requested “no more than 27% of the total monetary recovery” and “costs and expenses up to 3% of the fund.” If granted the high-end of that request, the attorneys could pocket $180 million — $162 million in legal fees and $18 million in other expenses.

Residents, on the hand, are likely to receive nowhere near millions once the funds are divided based on the allocation formula. A copy of a the proposed claim form attached to the motion to approve the settlement listed how much a class member will likely get in property damages from the settlement — 0-2 miles from derailment ($70,000), 2-4 miles ($45,000), 4-7 miles ($30,000), 7-10 miles ($15,000), 10-15 miles (approximately $500) and 15-20 miles ($250). Examples given for “potential, average payment amounts based on proximity to East Palestine for individuals that submit a claim for personal injury payment” were $10,000 or lower. The form does state the possibility of a larger payout for “extraordinary claims” for both property and personal injury damages, meaning some awards could be higher.

Informational packets will be mailed out to the public based on most-recent census data to help eligible residents better understand the claims process. More town halls will also be held within the impacted communities and a claims center will be established at the former site of the Norfolk Southern Family Assistance Center located at 191 Rebecca Street. That center will open once the letters are mailed out.

The first legal action against the railroad was filed Feb. 7, 2023, just days after the derailment and, in April of 2023, Pearson ordered that case and 30 others be consolidated into the class-action suit, representing approximately 100 village residents and over 30 East Palestine businesses as well about 40 residents and seven businesses outside of the village in Youngstown’s U.S. Northern District Court.