BNSF R. Co. v. Loos (17-1042)

argument 17-1042

BNSF R. Co. v. Loos

Supreme Court of the United States 55 min 5 speakers 8 chapters transcribed 5 days ago official recording ↗

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What is the central legal issue in BNSF Railway Co. v. Lowe’s?

John G. Roberts 0:00

Next, in Case 17-1042, BNSF Railway Company v. Lowe's. Ms. Black.

Ms. Black 0:06

Justice Breyers. He'll be back. Okay.

John G. Roberts 0:10

Thank you, though.

Ms. Black 0:12

Thank you, Mr. Chief Justice, and may it please the Court. For three reasons, a payment by an employer to an employee for lost wages under FILA is compensation under Section 3231E1 of the Railroad Retirement Tax Act, or RRTA.

Unknown 0:30

Ms. Bond, before you launch into that, can you tell us why the railroad cares? I mean, if he doesn't, if it's not, he's not subject to the tax, neither is the employer. So what is the state that you have in

Ms. Black 0:44

this? Sure. I mean, although the The respondent argues that the employer is subject on his fallback. But generally, to answer your question, the employer cares because under a system that would credit all lost wage FILA awards to retirement benefits but without any tax burden has a long-term risk of insolvency or instability to the system. So there's a short-term savings to be sure, and generally people don't like to pay taxes anymore. for the sake of taxes, but the entire purpose of this tax act is to fund the retirement benefits for railroad employees, and pensions are good for the railroads. So that's the answer. If I could get to the three reasons. First,

Elena Kagan 1:29

sure, sorry. There's no personal interest in the sense of if we say that it's not, then the railroad doesn't withhold and pay the state. Did you in this case? Yes. You wanted a credit against the award, but did you, in fact, pay anything, any federal taxes beforehand?

Ms. Black 1:50

Yes. So all $9,000 has been paid. The $6,000 portion of the employer share was paid, and $3,000 was withheld from the payment of the FILA award to account for the employee share. And the railroad and the reason why the dispute came up is the railroad wants an offset for the $3,000 that should have been withheld from the railroad employee. So we get to the statutory text, and the first reason is the statutory text and structure make clear that such a payment is for services rendered and that employees need not be an act of service to pay for services rendered. Second, a payment for lost wages under FILA is no different from the workers' compensation, sickness, and disability pay that respondent agrees count as compensation.

Ms. Black 2:38

And third, taxing a payment for lost wages under FILA furthers the RRTA's purpose to fund benefits under the Railroad Retirement Act, or RRA. First, a payment for lost wages under FILA is remuneration paid for services rendered as an employee under subsection E1. A payment for lost wages under FILA compensates the employee because he rendered services up and until the time of injury. Indeed, by definition, an employee cannot recover lost wages under FILA unless he had been rendering services at the time of injury. Additionally, this Court in Narotco and Quality Stores interpreted virtually identical language under the Social Security Act and FICA. There, this Court interpreted the phrase which defined wages for services performed includes all compensation paid for the employment relationship.

Brett M. Kavanaugh 3:36

Your opposing counsel argues that Narotco is discredited, that that case didn't follow the text. We shouldn't follow that methodology here. Can you respond to that?

Ms. Black 3:44

Sure. Respondent argues that it's discredited under Cleveland Indians for the very last portion of Narotco, which has nothing to do with the question here. So the very last two paragraphs of Narotco said – that you credit the amount of lost wages in the period for which they're earned. And then Cleveland Indians came along and the IRS said, yeah, we know that, but we want to credit FICA in the period paid. And so in the opinion for the court, Cleveland Indians said, we recognize that the two should go in tandem, but we're going to defer to the IRS's allocation. And here there's a much more substantive distinction because the employee wants all the benefits under the benefit statute, but none of the ability.

Ms. Black 4:27

But I think your other question went to the discreditedness. I think you mean somehow in 1946, the court wasn't reading the text. That's

Brett M. Kavanaugh 4:36

their argument.