WHITE PLAINS, N.Y. (Legal Newsline) — An Ohio Carpenters pension fund that purchased interests in Norfolk Southern is claiming the company failed to disclose its safety issues.
Ohio Carpenters Pension Fund and City of Pontiac Reestablished General Employees' Retirement System, individually and on behalf of all others similarly situated, filed a complaint May 16 in the U.S. District Court for the Southern District of New York against Norfolk Southern Corporation, Morgan Stanley & Co., LLC, Wells Fargo Securities, Goldman Sachs & Co., and others alleging violation of federal securities laws.
The plaintiffs, according to their class action, acquired Norfolk Southern senior notes. They allege Norfolk failed to disclose material safety risks for its "Precision Scheduled Railroad (PSR)," which the company adopted in 2019 to increase revenues and decrease costs through operational changes. The plaintiffs further allege Norfolk's PSR included reducing staff, tighter schedules and longer trains with heavier packed cargo.
They claim the company's "offering materials" referred to in its SEC 2020 Exchange Offer and Registration Statement were false and misleading and touted Norfolk's safety and environmental protections while failing to disclose its PSR strategy led to increased train derailments and undermined worker safety by spending less on safety training, technology and equipment.
The suit is part of litigation the company faces after a derailment in East Palestine, Ohio.
The plaintiffs seek seeks monetary relief, trial by jury, interest and all other just relief. They are represented by Francis McConville and Guillaume Buell of Labaton Sucharow LLP in New York City.
U.S. District Court for the Southern District of New York case number 1:23-CV-04068