NEW YORK, Feb 27 (Reuters) - A federal judge on Thursday

dismissed a lawsuit accusing Norfolk Southern ( NSC ) of causing

hundreds of millions of dollars of losses for bondholders by

concealing safety risks prior to the February 2023 derailment in

East Palestine, Ohio of a train carrying hazardous chemicals.

U.S. District Judge Lewis Kaplan in Manhattan found no proof

to support bondholder claims that Norfolk Southern's ( NSC ) statements

in offering materials about its focus on safety were false, or

that it was "cutting corners" on safety in pursuit of profits.

Kaplan found no duty to disclose that the use of "Precision

Scheduled Railroading," which employs longer and heavier trains

with fewer workers, caused an unspecified increase in the risk

of accidents, or that the Federal Railroad Administration in

2021 found Norfolk Southern's ( NSC ) conductor training inadequate.

He also said Norfolk Southern ( NSC ) was not obligated to

disclose that early improvements in operating metrics under a

business strategy adopted in 2019 would prove unsustainable.

"When an issuer makes a disclosure about a particular

topic, the representation must be complete and accurate," Kaplan

wrote. "Plaintiffs' argument, however, stretches these

principles past their logical breaking point."

The lawsuit led by pension funds in Ohio and Michigan

sought damages for investors who owned $3.95 billion of Norfolk

Southern ( NSC ) senior notes and bonds from seven offerings by the

Atlanta-based railroad between May 2021 and January 2023.

Lawyers for the plaintiffs did not immediately respond

to requests for comment.

Norfolk Southern ( NSC ) said Kaplan's decision reached "the

right result, and we are very pleased with the outcome."

A federal magistrate judge had recommended to Kaplan

last July that the plaintiffs could pursue some of their claims.

The February 3, 2023

derailment

included 38 railcars, and released more than 1 million

gallons of hazardous materials and pollutants into

the environment

.

Last month, Norfolk Southern ( NSC ) said it has incurred $1.44

billion of costs for environmental remediation and monitoring,

community assistance and legal settlements from the derailment,

after accounting for insurance payouts.

The case is Ohio Carpenters Pension Fund et al v Norfolk

Southern Corp Bond-Note Securities Litigation, et al, U.S.

District Court, Southern District of New York, No. 23-04068.