EAST PALESTINE, Ohio — While a motion to reduce or eliminate an $850,000 appeal bond is still being reconsidered in the Sixth Circuit Court of Appeals in Cincinnati regarding the $600 million settlement between Norfolk Southern and residents impacted by the 2023 train derailment, attorneys continue to fight about legal fees in the other appeal filed against the settlement.

That appeal is disputing the distribution of the legal fees only and was filed by T. Michael Morgan of Morgan & Morgan after taking issue with how the $180 million awarded to the attorneys who worked on the deal was divided and that co-lead counsel ultimately decided how it would be allocated. Morgan & Morgan also took issue with the attorney fees being paid out almost immediately while class members (residents) are forced to wait until all appeals are exhausted to receive any compensation.

Morgan & Morgan filed a brief with the Sixth Circuit in March arguing against the “quick-pay” provision which allowed the legal fees of $162 million plus an additional $18 million for expenses to be wired into an account that was then allocated to all the attorneys who worked the case. Morgan & Morgan received their cut on Oct. 7, 2024, days after final approval was granted on Sept. 25.

In the brief, Morgan & Morgan argued Jude Benita, Pearson of Younstown’s U.S. District Court “erred by permitting the lawyers to receive their fees while their clients are forced to wait until all appeals are exhausted.”

“No class counsel should enjoy millions of dollars — including some that might not belong to them — while a large group of their injured clients are left wondering whether they’ll ever receive compensation,” the brief continued. “Nor should a small group of lawyers have the unconstrained power to decide the fortunes of dozens of other law firms who poured their time, energy, and resources into working up the class settlement.”

Morgan & Morgan argued that “lead counsel has an incentive to undercompensate non-lead counsel” and that “the courts should explain to the uncompensated class members why their attorneys should benefit from their misfortune before they get anything.”

Mr. Paul D. Clement, an attorney representing the class co-lead counsel, equated Morgan’s complaint to nothing more “than sour grapes.”

“At the end of the day, Morgan is simply upset that co-lead class counsels’ methodology did not give him special treatment and reward him with higher pay for less work,” Clement wrote. “Morgan may now regret how many fewer hours his firm contributed in relation to the other firms, but approving an allocation that reflects that objective disparity does not constitute an abuse of discretion.”

As far as the quick-pay provision, Clement insisted that “Morgan lacks standing to appeal the approval of a settlement provision that causes him no injury, and, in fact, benefits him” as his firm was immediately paid while class members continue to wait.

Residents will not receive their allotted portion of the settlement for property damage, also known as direct payments of up to $70,000 per household, until the appeals process plays out. In Ohio, that process can take years.

Zsuzsa Troyan, Tamara Freeze, Sharon Lynch, Carly Tunno and Joseph Sheely appealed the settlement and were ordered to pay a bond of $850,000 — with each appellant responsible for one-fifth or $170,000 — as a financial guarantee to cover court costs if the appeal is lost.

A motion to reconsider reducing or eliminating that bond all together is yet to be ruled on by Sixth Circuit.

As for the personal injury damages which were open to residents within 10 miles or less of the derailment, the distribution of those funds has been slow. Eight months after final approval, many residents are still waiting to receive payments that were initially promised to be paid out within 30 days after final approval.