Page:BNSF Railway Company v. Michael D. Loos.pdf/19

2 train yard. 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. Loos was unable to earn because of the injury BNSF’s negligence caused.

Then a strange thing happened. BNSF argued that the lost wages portion of Mr. Loos’s judgment represented “compensation” to him “for services rendered as an employee” and was thus taxable income under the Railroad Retirement Tax Act (RRTA). 26 U. S. C. §3201 et seq. In much the same way the Social Security Act taxes other citizens’ incomes to fund their retirement benefits, the RRTA taxes railroad employees’ earnings to pay for their public pensions. And BNSF took the view that, because Mr. Loos owed the IRS taxes on the lost wages portion of his judgment, it had to withhold an appropriate sum and redirect it to the government. The company took this position even though it meant BNSF would owe corresponding excise taxes. See 26 U. S. C. §3221. It took this position, too, even though no one has identified for us a single case where the IRS has sought to collect RRTA taxes on a FELA judgment in the 80 years the two statutes have coexisted. The company even persisted in its view after, first, the district court and, then, the Eighth Circuit ruled that Mr. Loos’s award wasn’t subject to RRTA taxes. Even after all that, BNSF went to the trouble of seeking review in this Court to win the right to pay the IRS.

What’s the reason for BNSF’s tireless campaign? Is the