Not Used

Sunoco v. Trinity Industries addressed this novel issue: whether a railcar lease required the lessee to pay for federally mandated railcar modifications, even though the lessee had taken its railcars out of service before the modifications became mandatory. The Fifth Court reversed a $15.4 million judgment against the lessee.

The contract required the lessee to pay for modifications “required” by a change in “car design, specification, or appurtenances” ordered by a governmental authority. The federal “FAST” Act and related regulations mandated upgrades to certain kinds of tank cars, butthe lessee had already taken its cars out of service after oil-price changes made rail transport uneconomical. It continued paying rent but refused to pay for the modifications, contending the mandate did not apply to parked cars.

The Court held that the federal statute’s phrase “used to transport” is dispositive, and means that “modifications are required only if the railcars are actually being used to transport crude oil.” The court found this reading consistent with the safety purpose behind the mandate, reasoning that “[t]here would be no safety reason to upgrade railcars not in service …” No. 05-24-00468-CV (Tex. App.—Dallas Aug. 31, 2026, no pet. h.) (mem. op.), LPHS represented the successful appellant in this matter.