Portal:Supreme Court of the United States

“ Blending tax bases that Congress kept discrete, the District Court and Loos proffer a scheme in which employees pay no tax on damages compensating for personal injuries; railroads pay the full excise tax on such compensation; and employees receive full credit for the compensation in determining their retirement benefits. ”

“ And I don’t see why we would reach a different result here simply because the victim of BNSF’s negligence happened to be one of its own workers. Of course, as the Court points out, ante, at 11, n. 5, FELA suits may be brought only by railroad employees against their employers. But in cases like ours a FELA suit simply serves in the interstate railroad industry as a federalized substitute for a traditional state negligence tort claim of the sort that could be brought by anyone the railroad injured, employee or not. Inescapably, “the basis of liability under [FELA] is and remains negligence.” ”

“ After all, an employer offers those benefits to attract and keep employees working on its behalf. In that way, these benefits form part of the “quid pro quo” (compensation) the employer pays to secure the “duty or labor” (services) the employee renders. Cf. United States v. Quality Stores, Inc., 572 U. S. 141, 146 (2014) .
But damages for negligence are different. No one would describe a dangerous fall or the wrenching of a knee as a “service rendered” to the party who negligently caused the accident. ”

“ And, unlike the RRTA, that statute continues to include “pay for time lost” in the definition of “compensation” it uses to calculate benefits. 45 U. S. C. §231 (h) (1) . Normally, when Congress chooses to exclude terms in one statute while introducing or retaining them in another closely related law, we give effect to rather than pass a blind eye over the difference. Nor is there any question that Congress knows exactly how to tax a favorable tort judgment when it wants. See, e. g., 26 U. S. C. §104 (a) (2) (punitive damages are not deductible) . ”

“ In his view, echoed by the dissent, “remuneration... for services rendered” means the “package of benefits” an employer pays “to retain the employee.” Brief for Respondent 37; post, at 3–4. He therefore agrees with BNSF that benefits like sick pay and vacation pay are taxable “compensation.” He contends, however, that FELA damages for lost wages are of a different order. They are not part of an employee’s “package of benefits,” he observes, and therefore should not count as “compensation.” Such damages, Loos urges, “compensate for an injury” rather than for services rendered. ”

“ Congress created both the railroad retirement system and the Social Security system during the Great Depression primarily to ensure the financial security of members of the workforce when they reach old age. ”

“ We disagreed. Emphasizing that the phrase “any service... performed” denotes “breadth of coverage,” we held that “wages” means remuneration for “the entire employer-employee relationship”; in other words, “wages” embraced pay for active service plus pay received for periods of absence from active service. Id., at 366. Backpay, we reasoned, counts as “wages” because it compensates for “the loss of wages which the employee suffered from the employer’s wrong.” Id., at 364.
In Quality Stores, we again trained on the meaning of “wages,” reiterating that “Congress chose to define wages... ”

“ Nor does United States v. Cleveland Indians Baseball Co., 532 U. S. 200 (2001) , aid Loos’s argument, repeated by the dissent. See post, at 8. Indeed, Cleveland Indians reasserted Nierotko’s holding that “backpay for a time in which the employee was not on the job” counts as pay for services, and therefore ranks as wages. 532 U. S., at 210. Cleveland Indians then took up a discrete, “secondary issue” Nierotko presented, one not in contention here, i. e., whether for taxation purposes backpay is allocable to the tax period when paid rather than an earlier time-earned period. ”

“ The railroad’s “gambit,” the dissent surmises, is to increase pressure on injured workers to settle their claims. Post, at 3. Contrast with the dissent’s conjecture, BNSF’s entirely plausible account of a railroad’s stake in this dispute. Because the RRA credits lost wages toward an employee’s benefits, see 45 U. S. C. §231 (h) (1) , BNSF posits that immunizing those payments from RRTA taxes would expose the system to “a long-term risk of insolvency.” Tr. of Oral Arg. 4; see Reply Brief for Petitioner 14. ↑ The dissent’s reduction of Nierotko’s significance fares no better. ”

“ Taxes will not attach to other amounts attributed to, say, pain and suffering or medical costs. At trial, of course, a plaintiff ’s damages are what they are, and often juries will attribute a significant portion of damages to lost wages. ”

“ He then cites a provision of the Internal Revenue Code, 26 U. S. C. §104 (a) (2) . This provision exempts “damages... received... on account of personal physical injuries” from federal income taxation by excluding such damages from “gross income.” ”

“ He brought his claim under the Federal Employers’ Liability Act (FELA) , an analogue to traditional state-law tort suits that makes an interstate railroad “liable in damages to any person suffering injury while he is employed” by the railroad “for such injury... resulting in whole or in part from the [railroad’s] negligence.” 45 U. S. C. §51. Ultimately, and again much like in any other tort suit, the jury awarded damages in three categories: $85,000 in pain and suffering, $11,212.78 in medical expenses, and $30,000 in lost wages–the final category representing the amount Mr. ”

“ But nothing like that happened here. BNSF devoted scarcely any of its briefing to Chevron. At oral argument, BNSF’s lawyer didn’t even mention the case until the final seconds–and even then “hate [d] to cite” it. Tr. ”