WilmerHale Achieves Significant Securities Class Action Victory for Norfolk Southern

WilmerHale Achieves Significant Securities Class Action Victory for Norfolk Southern

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Clients across a range of industries turn to WilmerHale for sophisticated representation in high-stakes class action litigation.
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WilmerHale has defended clients in hundreds of class, derivative, shareholder and individual actions alleging securities fraud, breach of fiduciary duty and other corporate misconduct.

On February 27, 2025, WilmerHale obtained a major victory for Norfolk Southern Corporation and several of its current and former executives and directors by securing a motion to dismiss in a putative class action in which Plaintiffs alleged violations of Sections 11 and 15 of the Securities Act of 1933. The decision effectively closes the case.

The litigation stemmed from a derailment in East Palestine, Ohio, on February 3, 2023, involving a Norfolk Southern train carrying hazardous materials. Plaintiffs alleged that Norfolk Southern made materially false and misleading statements by claiming a strong commitment to safety while implementing hazardous cost-cutting measures in operations and staffing. They claimed Norfolk Southern’s adoption of precision scheduled railroading in 2019 increased the risk of accidents and derailments and that the company failed to disclose allegedly illegal conduct relating to safety issues.

Norfolk Southern moved to dismiss on various grounds, including that the challenged statements were too general to be actionable and Plaintiffs had not identified any misleading statements by omission. The company also argued it had adequately disclosed the risk of a catastrophic derailment involving hazardous materials.

Magistrate Judge Sarah Cave recommended the Court deny the motion to dismiss in principal part. However, Judge Lewis Kaplan of the Southern District of New York issued an order dismissing the amended complaint in its entirety, adopting the majority of Norfolk Southern's arguments. The Court held that the company’s statements concerning safety were either nonactionable “puffery” or not adequately alleged to be false. Judge Kaplan also rejected Plaintiffs' argument that Norfolk Southern failed to disclose an increased rate of accidents during the Class Period.  The Court further held that Plaintiffs did not allege plausibly that Norfolk Southern violated any law or regulation.

The WilmerHale team representing Norfolk Southern in the securities litigation includes Mike Bongiorno, Tamar Kaplan-Marans, Peter Spaeth, Denise Tsai, Jeremy Adler, Ripley Shiarella, Samuel Frizell and Matthew Lewis.

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