For an investor, one method of doing research is court documents, because companies get sued on a regular basis. Every large company has a law department and they are also have retainers to the larger law firms that are known nationally. One of the good things for investors, unlike Public Relations outside the court which is design to ensure the company is a favorable light, inside the court truth must be told. However, when it comes to paying for actions, who is responsible needs a court to decide and how much?

In an article by Josh Funk of the Associated Press, in 2023 a train derailed near the town of East Palestine, Ohio and toxic chemicals were released into the environment. Who should pay and how much?

The train carrying the load was Norfolk Southern and it is looking for 2 other companies to share the cost of a $600 million payment. The other two companies are: GATX Corp who owns the railcar and OxyVinyls which made the chemicals in the railway car.

The train derailed and Norfolk is responsible for the derailment because its job is to maintain the railway line and run the train properly. However, similar to most railways, the railway does not own most of the cars it hauls, and that means everyone involved in shipping hazardous chemicals bears some responsibility for ensuring their safety under federal regulations.

GATX which owns railway cars and rents or leases to companies says it compiled with all the relevant regulations for taking care of its railway cars. If there was a problem, NS should have spotted the problem, repaired it and sent GATX the bill for the repairs.

OxyVinyls which made the chemical inside the car, noted NS runs the railway, they are responsible for the safety. The train company operated and inspected the train and was responsible for delivering the cargo safely. NS says they relied on information from OxyVinyls on what to do with the chemicals when the derailment happened. What happens in a fire? how do they handle the chemicals.

Linking to dividend paying stocks, given there are only a few railway companies and they are not building more tracks for new players, railways are often seen as a good long term investment. Most of the railways although there is some overlap tend to have a near monopoly over a portion of the country. Most of the time, railways are doing a good job of moving freight back and forth across the country at very competitive prices. Lawsuits allow you to understand how the railways have evolved and actually operate.

There are more questions than answers, till the next time – to raising questions.