Labaton Sucharow LLP Announces Securities Class Action Lawsuit Filed Against Norfolk Southern Corporation and Related Parties

Labaton Sucharow LLP (“Labaton Sucharow”) announces that, on May 16, 2023, it filed a securities class action lawsuit (the “Complaint”) on behalf of its clients Ohio Carpenters Pension Fund and City of Pontiac Reestablished General Employees’ Retirement System against Norfolk Southern Corporation (“Norfolk Southern” or the “Company”) and related parties (collectively, “Defendants”). The action, which is captioned Ohio Carpenters Pension Fund v. Norfolk Southern Corporation, No. 23-cv-04068 (S.D.N.Y.), asserts claims under Sections 11, 12(a)(2), and 15 of the Securities Act of 1933, on behalf of all persons and entities that purchased or otherwise acquired Norfolk Southern senior notes (the “Senior Notes”) pursuant, or traceable, or both, to materials issued in connection with offerings conducted by the Company on or around August 18, 2020, May 3, 2021, August 16, 2021, February 15, 2022, June 2, 2022, and January 26, 2023 (the “Offerings”). The Offerings are listed below:

Defendants include officers and directors of the Company as well as underwriters which participated in the Offerings.

Norfolk Southern is a major rail transportation company primarily focused on the transport of raw materials, intermediate products, and finished goods across the Southeast, East, and Midwest United States. In 2019, the Company adopted a “Precision Scheduled Railroading” (“PSR”) strategy, which was designed to increase revenues and decrease costs by enacting hyper-efficient operational changes like reductions in staff, tighter schedules, and longer trains that can stretch up to miles in length.

The Complaint alleges that materials issued in connection with the Offerings (the “Offering Materials”) were negligently prepared and, as a result, contained untrue statements of material fact or omitted to state other facts necessary to make the statements made not misleading and were not prepared in accordance with the rules and regulations governing their preparation. Specifically, the statements contained in the Offering Materials were materially false and misleading when made because the Offering Materials touted the Company’s focus on safety and environmental protection while failing to disclose the following adverse facts that existed at the time of the Offerings that were later disclosed to the public: (1) the PSR strategy had led to increased train derailments and an increased risk of future derailments; (2) the PSR strategy was part of a culture of increased risk-taking at the expense of reasonable safety precautions due to the Company’s near-term focus on profits; (3) the Company was more vulnerable to train derailments; (4) Norfolk Southern’s capital spending and replacement programs were designed to prioritize profits over the Company’s ability to provide safe, efficient, and reliable rail transportation services; (5) the Company’s lobbying efforts had undermined its ability to provide safe, efficient, and reliable rail transportation services; (6) the PSR strategy undermined worker safety and the Company’s purported “commitment to an injury-free workplace” because the Company’s PSR plan prioritized reducing expenses through fewer personnel, longer trains, and less spending on safety training, technology, and equipment; (7) the PSR strategy rendered Norfolk Southern more susceptible to accidents that could cause serious economic and bodily harm; and (8) the Company failed to put in place responsive practices and procedures to minimize the threat to communities in the event that these communities suffered the derailment of a Norfolk Southern train carrying hazardous and toxic materials. The undisclosed adverse facts and circumstances detailed above made an investment in the Senior Notes speculative or risky, and presented known trends, uncertainties, and risks that required disclosure in the Offerings Materials which were not disclosed, including adverse trends and risks related to the safety of Norfolk Southern’s operations.

These failures, false representations, and other undisclosed issues were revealed to the market through public revelations on February 3, 2023 when a Norfolk Southern freight train carrying several hazardous materials derailed in East Palestine, Ohio. Many of these derailed cars burned for days after the accident while releasing toxic gases. Residents within a 1-mile radius of the derailment site were immediately ordered to evaluate the area and agencies from Ohio, Pennsylvania, and West Virginia initiated emergency response operations. Subsequently, the National Transportation Safety Board, the Environmental Protection Agency and the Federal Railroad Administration launched investigations into Norfolk Southern’s safety practices. As a result of these and other revelations related to Norfolk Southern’s lack of operational safety, the market value of the Senior Notes declined well below their issuance prices.

If you purchased or acquired Senior Notes pursuant and/or traceable to the Offering Materials and were damaged thereby, you are a member of the “Class” and may be able to seek appointment as Lead Plaintiff. Lead Plaintiff motion papers must be filed no later than July 17, 2023. The Lead Plaintiff is a court-appointed representative for absent members of the Class. You do not need to seek appointment as Lead Plaintiff to share in any Class recovery in this action. If you are a Class member and there is a recovery for the Class, you can share in that recovery as an absent Class member. You may retain counsel of your choice to represent you in this action.

If you would like to consider serving as Lead Plaintiff or have any questions about this lawsuit, you may contact Francis P. McConville, Esq. of Labaton Sucharow, at (212) 907-0650, or via email at fmcconville@labaton.com. You can view a copy of the complaint online here.

Plaintiffs Ohio Carpenters Pension Fund and City of Pontiac Reestablished General Employees’ Retirement System are represented by Labaton Sucharow, which represents many of the largest pension funds in the United States and internationally with combined assets under management of more than $3 trillion. Labaton Sucharow’s litigation reputation is built on its half-century of securities litigation experience, more than seventy full-time attorneys, and in-house team of investigators, financial analysts, and forensic accountants. Labaton Sucharow has been recognized for its excellence by the courts and peers, and it is consistently ranked in leading industry publications. Offices are located in New York, NY, Wilmington, DE, and Washington, D.C. More information about Labaton Sucharow is available at www.labaton.com.

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