Biden DOJ Supporting Rail Giant Norfolk Southern's Effort to Block Future Lawsuits

Norfolk Southern—the railroad giant whose train derailed and caused a toxic chemical fire in a small Ohio town earlier this month—has asked the U.S. Supreme Court to throw out a 2017 lawsuit filed by a cancer-afflicted former rail worker, and the Biden administration is siding with the corporation, fresh reporting from The Lever revealed Thursday.

If the high court, dominated by six right-wing justices, rules in favor of Norfolk Southern, it could be easier for the profitable rail carrier to block pending and future lawsuits, including from victims of the ongoing disaster in East Palestine. Moreover, it "could create a national precedent limiting where workers and consumers can bring cases against corporations," wrote two of the investigative outlet's reporters, Rebecca Burns and Julia Rock.

Former Norfolk Southern worker Robert Mallory was diagnosed with colon cancer in 2016. The following year, he filed a lawsuit alleging that his illness stemmed from workplace exposure to asbestos and other hazardous materials and that the rail carrier failed to provide safety equipment and other resources to ensure he was adequately protected on the job.

Although he had never worked in Pennsylvania, Mallory filed his lawsuit in the Philadelphia County Court of Common Pleas because his attorneys were from the state and "he thought he would get the fairest access to justice there," Ashley Keller, the lawyer representing him before the Supreme Court, told The Lever.

As Burns and Rock explained:

Pennsylvania has what's known as a "consent-by-registration" statute—something states have had on the books since the early 19th century—which stipulates that when corporations register to do business in the state, they are also consenting to be governed by that state's courts. Norfolk Southern asserts that being forced to defend the case in Pennsylvania would pose an undue burden, thereby violating its constitutional right to due process.

Even though Norfolk Southern owns thousands of miles of track in the Keystone State, the Philadelphia county court sided with the railroad and dismissed the case. Mallory appealed, and the case wound its way through state and federal courts before landing at the U.S. Supreme Court last year.

The rail carrier is asking the high court "to uphold the lower court ruling, overturn Pennsylvania's law, and restrict where corporations can be sued, upending centuries of precedent," the journalists noted. "If the court rules in favor of Norfolk Southern, it could overturn plaintiff-friendly laws on the books in states including Pennsylvania, New York, and Georgia that give workers and consumers more leeway to choose where they take corporations to court—an advantage national corporations already enjoy, as they often require customers and employees to agree to file litigation in specific locales whose laws make it harder to hold companies accountable."

Unsurprisingly, the American Association of Railroads (AAR) and other powerful corporate lobbying groups such as the U.S. Chamber of Commerce, the National Association of Manufacturers, and the American Trucking Association want to undercut the ability of workers and consumers to file lawsuits in the venue of their choosing. AAR, the rail industry's biggest lobby, filed a brief last September on behalf of Norfolk Southern.

Meanwhile, the U.S. Department of Justice (DOJ) also filed a brief siding with the railroad giant. The Supreme Court is expected to issue a decision in the coming months.

"This is totally insane," The Lever's editor, David Sirota, wrote on social media.

"Wow. Just wow," Pennsylvania Sen. Katie Muth (D-44) tweeted in response to the report. "Sadly, this isn’t that surprising, but WTAF."

"Should Norfolk Southern prevail, the company could use the ruling to challenge other lawsuits on the grounds that they're filed in the wrong venue," The Lever reported, citing Scott Nelson, an attorney with the Public Citizen Litigation Group, which filed a brief backing Mallory. "Such a decision could affect lawsuits filed by residents exposed to hazardous chemicals as the result of accidents in other states," including victims of air or water pollution caused by the recent derailment in East Palestine, five miles west of the Pennsylvania state border.

“[Norfolk Southern] might say, 'You can only sue us in Ohio or Virginia [where Norfolk Southern is headquartered],' even if you were injured at your home in Pennsylvania from an accident that took place five miles away in Ohio," Nelson told the outlet.

In its brief, AAR argued that if the high court rules in favor of Mallory, he and other plaintiffs suing railroads under the Federal Employers' Liability Act (FELA)—a law protecting rail workers injured on the job—"could have a wide range of jurisdictions to choose from."

However, Burns and Rock reported, "groups weighing in on Mallory's side pointed out that 'forum shopping' is the norm for corporations," including when companies with no physical presence in Delaware register in that state to dodge taxes or when firms file bankruptcy cases in states more likely to hand down favorable opinions.

Notably, "Norfolk Southern freely utilizes the Pennsylvania courts to enforce its rights," the Academy of Rail Labor Attorneys, a group of lawyers who represent rail workers, pointed out in a brief. "The railroad certainly is not prejudiced in any way by defending lawsuits in the state. For purposes of jurisdiction, there is no valid reason that a corporation such as Norfolk Southern should be treated differently than an individual within the state."

During oral arguments in the case last fall, Supreme Court Justice Elena Kagan, a liberal appointed by former President Barack Obama, asked Deputy Solicitor General Curtis Gannon why the Biden administration decided to involve itself in this case.

In response, Gannon said, "We pointed out not just that… the excessive availability of general jurisdiction could cause international concerns for trade with the United States and our commercial interests, but also the petitioner had called into question the constitutionality of a federal statute, and so we thought that it was important to make sure that the court's decision here wouldn't implicate the constitutionality of federal statutes."

The Biden administration's contention that Pennsylvania's law amounts to an overreach of state authority and calls into question the constitutionality of a federal statute is nonsensical, Keller, the plaintiff's lawyer, told The Lever.

“The United States relies on consent-by-registration statutes [like the Pennsylvania law] to obtain personal jurisdiction over various foreign entities," said Keller. "If it's unconstitutionally coercive when Pennsylvania does it, why isn't it unconstitutionally coercive when the United States does it?"

Burns and Rock warned that the high court's decision could have implications for future lawsuits as well as pending ones.

At least five class-action negligence lawsuits have been filed in Ohio against Norfolk Southern since the company's February 3 freight train crash in East Palestine.

While progressive advocacy groups and lawmakers have demanded that U.S. Transportation Secretary Pete Buttigieg move immediately to improve rail safety rules in response to that unfolding environmental and public health catastrophe, The Leverreported last week that Buttigieg is actively considering an industry-backed proposal to further weaken the regulation of train braking systems.

Another Norfolk Southern train carrying hazardous materials careened off the tracks on Thursday near Detroit, Michigan. Union leaders and Sen. Bernie Sanders (I-Vt.) have described the recent derailments as the predictable result of Wall Street-backed policies that prioritize profits over safety.

As Sirota, Burns, Rock, and Matthew Cunningham-Cook of The Lever pointed out in a Friday op-ed in The New York Times, the U.S. is home to more than 1,000 train derailments per year and has seen a 36% increase in hazardous materials violations committed by rail carriers in the past five years.

The rail industry "tolerates too many preventable derailments and fights too many safety regulations," the journalists wrote. "The federal government must move quickly to improve rail safety overall."

"It shouldn't take a chemical cloud over a community in the American heartland to compel the government to protect its people," they added. "If we want to get train derailments much closer to zero, the rail industry must evolve."