FILE - Portions of a Norfolk Southern freight train that derailed the night before burn in East Palestine, Ohio, Feb. 4, 2023. On Tuesday, April 9, 2024, Norfolk Southern has agreed to pay $600 million in a class-action lawsuit settlement related to a fiery train derailment in February 2023 in eastern Ohio. (AP Photo/Gene J. Puskar, File)

EAST PALESTINE — The law firm appealing the way legal fees were divided among attorneys who helped broker last year’s $600 million settlement between Norfolk Southern and residents impacted by the 2023 train derailment will get the chance to argue its case.

Oral arguments have been set for Oct. 25 at noon in the 6th Circuit Court of Appeals in Cincinnati. The court will assign a panel of three judges from a pool of 16 to hear arguments.

Morgan & Morgan appealed final approval of the settlement, granted last year, disputing the distribution of the legal fees only. The firm believes the $180 million awarded to class counsel — $162 million for fees and $18 million for expenses — was split unfairly and accuses the five law firms put in charge of distributing the fees of exploiting the quick pay provision that allowed the attorneys to receive their cut almost immediately after final approval was granted.

Morgan & Morgan has criticized the quick-pay provision in nearly all appeal documents and initially filed an injunction against distribution of the fees on Oct. 28 with Judge Benita Pearson, who oversaw the settlement in Youngstown’s District Court, ruling against that motion on Nov. 18. Morgan & Morgan then filed a notice of appeal on Dec. 16.

It was through the injunction filed by Morgan & Morgan and Pearson’s subsequent ruling against it that it was first learned the attorneys had already been paid while residents’ payments were put on hold.

A Norfolk Southern freight train rolls past the U.S. Steel's Clairton Coke Works, in Clairton, Pa., Tuesday, Aug. 12, 2025. (AP Photo/Gene J. Puskar)

In her order denying the motion, Pearson referred to Section XIV of the settlement agreement which stated the legal fees were to be paid within 14 days of final approval by wiring the sum from the settlement fund into an escrow account. Morgan & Morgan received an email on Oct. 7 — less than two weeks after Pearson gave her stamp of approval — from lead counsel stating that allocations had been finalized and requesting wire instructions to send Morgan & Morgan its portion of the legal fees.

Meanwhile, the 55,000 residents who made a claim for property damages are waiting for all appeals to play out before they can receive direct payments of up to $70,000 per household.

Those payments were paused indefinitely when five class members — Zsuzsa Troyan, Tamara Freeze, Sharon Lynch, Carly Tunno and Joseph Sheely — appealed the settlement. They believe the settlement did not provide enough money for medical bills and medical treatment for illnesses blamed on the derailment. They have also alleged the class members were provided false and misleading information, expert testimony was ignored and not enough time given to class members to decide whether to opt in or out.

No oral arguments have been set in that appeal, as the 6th Circuit is still weighing the merit and fairness of an $850,000 appeal bond Pearson ordered the five appealing residents to pay in order to proceed. Attorney David Graham has asked the 6th Circuit to significantly reduce or eliminate completely the bond he called a “roadblock”.

“An appeal bond is supposed to cover actual costs — not be used to price people out of the courtroom,” Graham said. “In this case, the bond has effectively shut down the ability of everyday families to challenge a $600 million deal that waived their rights to future claims and the rights of nearly 200,000 households. That’s not how justice is supposed to work.”