WilmerHale achieved a significant appellate victory for Norfolk Southern Corporation and a number of its current and former officers and directors when the US Court of Appeals for the Second Circuit affirmed the dismissal of a putative securities class action arising from the February 2023 train derailment in East Palestine, Ohio.
In an order issued on February 27, 2026, the Second Circuit affirmed in full the judgment of the US District Court for the Southern District of New York, which had dismissed claims brought under Sections 11 and 15 of the Securities Act of 1933. The appellate court agreed that the plaintiffs failed to plead any actionable misstatements or omissions in connection with various senior note offerings by Norfolk Southern.
The case, In Re: Norfolk Southern Corporation Bond/Note Securities Litigation., was brought by a putative class of bond investors who alleged that Norfolk Southern, certain of its officers and directors, and underwriters of bonds made materially misleading statements regarding the company’s safety practices in offering materials issued in the years before the derailment. Plaintiffs claimed that the statements misrepresented the safety of Norfolk Southern’s operations and failed to disclose operational decisions that allegedly increased safety risks
The district court, in a decision by Judge Lewis A. Kaplan, issued an order dismissing the amended complaint in its entirety, adopting the majority of Norfolk Southern’s arguments. The Court held that the company’s statements concerning safety were either nonactionable “puffery” or not adequately alleged to be false, among other things.
On appeal, Plaintiffs abandoned most of their claims and challenged only seven statements relating to safety. Following oral argument in February, a unanimous Second Circuit panel affirmed the district court’s decision in its entirety. The court held that four of the challenged statements—general assertions that safety was “core” to Norfolk Southern’s business or a “way of life” at the company—were too vague and generalized to be material as a matter of law. The court further rejected plaintiffs’ argument that such statements should be treated differently because of the company’s role as a common carrier transporting hazardous materials, explaining that the importance of safety does not transform generalized statements into actionable statements under the securities laws.
As to the remaining three statements, the court concluded that plaintiffs failed to allege adequately that they were false. The panel noted that plaintiffs did not allege, for example, that Norfolk Southern lacked the training programs, safety messaging, or board-level safety committee described in the offering materials.
The Second Circuit’s decision reinforces well-established principles limiting potential liability under the securities laws for generic corporate statements, even when safety and operational integrity are central to a company’s business. The ruling brings Norfolk Southern a step closer to resolving litigation stemming from the East Palestine derailment, provides important guidance for future event-driven securities litigation, and confirms that the securities laws do not impose potential liability for vague, aspirational corporate statements.
WilmerHale represented Norfolk Southern and the individual defendants throughout the litigation and on appeal. The WilmerHale team was drawn from the firm’s Securities Litigation and Enforcement Practice, drawing on deep experience defending complex securities class actions on behalf of issuers and their officers and directors in federal courts nationwide, across a wide-range of industries. The team was led by Partners Michael Bongiorno and Tamar Kaplan-Marans, and included Special Counsel Peter Spaeth, Counsels Sofie Brooks and Denise Tsai, Senior Associate Trena Riley, and Associate Liz Bedrick.