Several years ago, the KCS Railroad (now Canadian Pacific Kansas City Railroad) retained Jim Lanter, and co-counsel Paul Wickes, to represent it in a lawsuit against Sasol Chemicals (USA), LLC. The railroad constructed a rail car storage yard for Sasol in Louisiana. A dispute arose regarding the amount of rent to be paid by Sasol. The lease provided that rent would be paid annually based on a per track foot calculation. Sasol contended that certain track on the premises should not be included in the calculation, and only paid rent on the amount of track that it claimed should be counted. The difference between the amount billed by KCS and the amount paid by Sasol was approximately $1.6 million per year. Over the length of the lease, that amount would total approximately $39 million.

Before trial, the trial court held that the lease was ambiguous despite KCS’ position to the contrary, and that a trial would be held to determine what constituted “track” as that word was used in the lease rent terms. After a trial, the court determined that the word “track” did not include switch track as contended by Sasol. The KCS appealed the decision to the United States 5th Circuit Court of Appeals.

Today, the Court of Appeals issued an opinion holding that the trial court erred in its ruling, that the lease was not ambiguous, and that the word “track” included all rail track on the leased premises including switch track as KCS contended during trial. The Court of Appeals ordered that the case be sent back to the trial court to award the KCS damages equal to the difference between the amount of rent due and the amount paid by Sasol, that being approximately $9.6 million plus interest.