on the railroad retirement tax issue i'd like that by cameras or five minutes for rebuttal there are two important issues in this case regarding the whistleblower should lower statute the issue on appeal and also the railroad retirement packs act application to the l a judgments which is the issue on the cross appeal and if the court would indulge me i would like to focus on the packs issue first  under the internal revenue code it's clear that judgments for personal physical injuries are not taxable they're not taxable income it's equally clear that under fica if it's not income it's not wages right long line of cases that say that but hold wages in other words is a subset of income so if it's not taxable income it can't be deemed wages physical personal injury awards are not subject to fica withholding taxes the railroad retirement  act reversed a compensation fight over first to wages but the internal revenue service his own regulations provide that the definition of compensation under the r r t a is the same regulations income is the big circle if we're talking about venn diagrams fica wages is a smaller circle within that big circle and are r t a compensation is a smaller circle within the fica circle of wages in other words because r t a compensation can only be limited by the act to something smaller than wages under fica if something is not fica wages are not subject to fica taxes it cannot be subject to r t a taxes and that's the case with awards for personal physical injuries in other words regulations under the railroad retirement tax act can't expand the definition of compensation and they are beyond the scope of what would be considered wages  you can only limit it unless expressly limited  so in other words the railroads in the united states argument that no compensation means something more than wages under fica and therefore it comprehends payments on personal injury wards it is not possible under the statutory and regulatory structure and it's really important to keep this in mind the f b i l a has been around for over one hundred years the social security act and the railroad retirement act and fica have been around for many many decades in all of that time no one has ever thought argued considered said that payments on at the l a judgments are subject to withholding of the r t a never been an issue until around two thousand and thirteen when the railroad starts making that argument for the first time in a case in nebraska in a case in iowa and then eventually in missouri in the mickey case and then in the eastern district of missouri and  there's been no change in the regulation there hasn't been any notice by the i r s saying well we're reinterpreting the regulation which you couldn't do because it already has a regulation that says that compensation under the r t a is a limited subset of wages under fica and certainly more limited that income it's never there's no evidence of the i r s issuing a letter to the railroads stating that you've been paying all of these judgments geale of millions upon millions of dollars in fact taxes on these things nothing no explanation for why suddenly in two thousand and thirteen everything changes and this is a critically important issue because there are thousands of at the i like at the l a cases and the court i'm sure recognizes that the at the l a's or medial statute intended to protect railroad workers and provide them full compensation for their injuries quote in thousands of these cases railroad employs all are arguing for the full amount of the compensation that's due them without any knowledge of the fact that the judgment may be deemed to be taxable compensation and some amounts going to be taken out so that the employee doesn't get the full amount of what the jury has determined is his or her wast from the railroads negligence but here we're talking about lost wages right it's not it's not just lost wages are gone it's lost during a earning capacity that's brought about by the injury right so if we take a different example the surgeon who suffers from somebod negligence and his hands or her hands are not damaged and cannot perform surgery and even more that's a capital loss in a sense of that of the surgeon can't perform that sort of work anymore and earn what that surgeon could've earned from the point of the injury  walk so that's really the nature of the kind of the compensation that's being awarded but even if it is in the nature of lost wages here is what you could have burned up until the point time that you stop working for the railroad and then what you could burn in the future  congress has made clear in section one hundred four eight to that even if that's part of the award for us personal physical injury it's all exempt from income and there's any number of reasons for why congress would have made that decision is now claiming is effective these judgments is important because the a circuit model jury instructions fifteen point seventy three following the scream court's decision and leap halt says that when you're making a claim for lost wages tax amount yet when i finally get collection on that judgment now they are saying well we're going to take up more taxes again that doesn't make any sense it's double taxation it's it doesn't make any sense and nobody is expecting that the supreme court certainly wouldn't have ruled in leap old bad lost wages has to be determined by net after tax amounts if there was any inkling that well in fact payments on these things are going to be subject taxes here's another important point assume for the sake of argument that instead of the railroad paying part of the hundred forty thousand forty five thousand dollars judgment that mr los received this now that really puts an end to the question because it's a simple proposition it's one that the i r s itself has stated in a number of its publications that we point out in our brief that is not subject to income taxation it's not leaves the employ of the real now it's important also to keep in mind that although we're only talking about three thousand dollars in this case we can be talking about a substantial amount of money in other cases  around thirteen thousand dollars and mickey it was well over forty thousand dollars in the county kids if a railroad employee has suffered an extremely serious injury and received an award of ten million dollars as his damages from bad award on that entire ten million dollars in addition we have the recently in that did medicare surtax of zero point nine percent on income over two hundred thousand dollars or two hundred fifty thousand dollars or filing jointly now that's potentially that to that tax also because the taxation statute pax's as of the time of payment at the rates that are in a fact at the time of the payment subject to the higher camps that are in effect in time of payment even though if all were portion of that amount were allocated to the unique phrase credible compensation say five years ago when the employee was working for the railroad the rates back then would have been the caps would have been lucky or there wouldn't have been a medicare surtax the employee wouldn't have had those taxes withheld from his pay if bad judgment were made to him paid to him in the form of regular employment compensation during the time he was working for the relevant so the stats of the statutes are so disparate in terms of the benefits of the taxes the benefits and the taxes are so far apart from each other in terms of how they operate one can't just say even disregarding the statutory regulatory language that just because you might receive a retirement benefit you must pay railroad retirement packages because the taxes that are and mr close in this case is in title to payment in full the judgment that he received from the jury in this case now moving on to unless you're honest at any particular questions on that moving on briefly to whistleblower act the issue there is when the statute provides that the employee has a right of action if his terminations do in whole or in part to protect that activity and the railroads attempt at a justification for the termination has to be by clear and convincing evidence whether the railroad can get a summary judgment as happened in this case on their claims just because they happen to have evidence on their side that shows a plausible explanation for the t because the statute uses that phrase in whole or in part and this court has understood that to mean discriminatory action has to be a contributing factor only not the cause for the terminations just a contributing factor that very generous pro employee at the l a based causation standard is such bad so long as the employee produces substantial evidence of a discriminatory retaliatory mode of on the part of the railroad then the district court cannot enter summary judgment just because the judge believes the railroad and not the employee as under the way that is a decision that must be left to the jury to decide and in this case the jury gave mr low's everything that he asked for for exactly l a damages so that would tend to indicate that the jury may well have believed mr llosa side of the story regarding the whistleblower statu the court i'm arguing on behalf of b n s f and the federal government safety act appeal my colleague will handle the tax related questions i just to start off with what mr losed his counsel and with the standard in the eighth circuit for proving a violation employee who repeatedly failed to meet a corporate choir many of his job which is full time attendance for six years yet as dept discipline mr lowe's for attendance violations his attendance got so bad that in april twenty ten before mr first step in a disciplinary progression that ultimately led to his dismissal the plaintiff here only has to show that it's a contributing factor right correct it doesn't have lower standard than other retaliation  doesn't have to be for instance a motivating factor what about this argument though that coover i think is the name was similarly situated and he was allowed to use the i o n code to avoid an absence and and when you add to that apparently some evidence of a supervisor saying if you testify at this hearing it's going to be trouble for you why isn't that enough to at but that had he been able to use that he would have had the requisite absences from which he could have then reached the correct level of where he could then be terminated as you know in their progressive system don't just apply and are not under issue have more directly addressed the judge's question on the record we believe and we point this out in our brief doesn't actually support that mr cleaver was allowed to use the iowan code in the way that mr love said that he was that returned fully to work and then able to take up that well for up to ninety a month going for it and definitely i mean also mr cooper and mr lowe's engaged in the same protected activity which is reporting a workplace injury so under th trainmaster and the context of that quote if you look at the site and the appellant's brief and the context of that quote it's actually talking about the investigation of it that mr lewis received and of course it could be bad for him to receive an investigation that it's when he was at the third step in a four step progressive disciplined system but more importantly mr jay was a low level manager who wasn't even involved in the terminations decision so all of that stuff is basically i think spaghetti at wall anybody can point to one or two cut statements that he or she has heard but he hasn't tied it to the ultimate decision i was interested apparently the r another in from some others that there were some retaliatory motive here and that might be probative in another and another case but not here where both before and after mr loss testimony at the two thousand and twelve hearing i consistently disciplined him for attendance violations and by the time that's and that's a good jury our argument but in understand asking i don't mean to be argumentative here but i mean that's they should have done that did issue the notice of attendance on purpose as opposed to us in the state i still don't think that sufficient evidence to show that the n s f was intentionally retaliating on down the line when mr lowe's again violated the attendance policy just one thing following from another and there's no evidence for instance that mr right or mr bailey or mr alvan used the people who were involved in the final decision to dismiss mr lowe's for attendance violations were involved at all and t confirm that railroad retirement taxes are due on or an award and have to be deducted from my judgment but that's the position that the railroad is in today and it's unusual because by taking this position the f is put into putting itself in the position where it has to pay substantially more taxes on a judgment substantially more taxes because it is taxed at a much higher rate for the employer side of this contribution than the employer in this case in particular mr low said the ducted from the judgments on three thousand dollars where as there be an s f had to pay its employer side of that contribution to the r system in excess of six thousand dollars we take that position not because it benefits the railroad in this particular case it cost the railroad money in this case and it will cost the railroad money in every other case in which there is an awar for time lost in judgment it takes this position your honour's because it is required to do so by federal law it takes this position because it is entirely consistent with the history regarding the development and structure of the where labor where the railway executive labors association advocated the reason for this change and that was because it would benefit the railroad employs if they got credit by paying taxes for the time that they lost because of personal injury benefits that would in new york to them up on reaching retirement benefits which mr loesch will have because when the taxes were play the regulations and the act requires that the railroad allocate credit to him for that period of time that he was off on personal injury and that increases gets no benefit from this he gets benefit from every month extra time he gets credited with for payment for time lost every court that has looked at this issue virtually every court has looked at this issue said the term compensation is what governs when the tax is due every court that has looked at this as in essence said compensation and collude payments for time lost own judgments the trial court in this case reached that same conclusion the trial court in the cabin case sided with approval by playing of scales will also reach that same conclusion and that is awar judgment which include pray for time loss include compensation under the act plaintiff has cited the regulation in the railroad retirement tax ac says that the term compensation has the same meaning as wages in section thirty one two well except and they omitted this from their brief and i'm glad that counsel has advised the court of this except as specifically limited by the reverend retirement tax act or regulation the i r s administers the tax act or the regulations that they have promulgated under title twenty six includes specifically that compensation is not confined to amounts paid for active service but includes amounts paid for identifiable periods of time during which the employee absence from the active service of the lawyer they have issued regulations and as the regulation promulgated by the commissioner quote the commissioner may provide additional guidance that may be necessary or appropriate in applying the definitions of section thirty one twenty one am thirty two thirty one which we're talking about here and those regulations specifically provide that tax is due identifiable period of time in which the plaintiff is absent from work because of personal injury and again what what is the date of those regulations that regulation i'll have to ask the government a specific day of the regulation but i can tell you your honor record there has been no change of what are we to make of the fact that congress amended the railroad retirement tax act and removed all the specific language that made it clear that this was taxable they removed it in the tax act but they remained in the railroad retirement hacked your honor just redundant but the regulations covered that specific thing so it was not necessary anymore and everybody that's looked at that issue said there  no intent to revise the law as it existed when they looked at this issue and removed that specific language in one thousand nine hundred three and want to just leave it or why not just leave it there good question your honor but we know specifically when i asked to where these lost wages lost pay your opposing counsel said now wait a mentor this this involves a situation where there's going to be lost pay in the future because of injury and try to lump in with the personal injury aspect of this which i think generally is not subject to the tax and correct me if i'm wrong about that is that what we're talking about here is is you know specifically your honor about pray for time los pro piri period of time that may be a loss in the past as it was only in this case and it may be a loss in the future where in fact a jury allocates as they did in this case a specific amount for that wage a loss we can identify it and that's what's taxable if as in a hammock man as in philips and him as in liberty or they don't specify the regs are very clear the entire award is deemed to be tax system that we have you go to congress and get it changed or if you don't think you have to pay the taxes there's a process to appeal through the tax issue and that you were not allowed in this case and you responded the argument that was made that the cannot award and amount that takes into account taxes you're not to consider the taxes on any award and that was limited to federal income tax your honor and that's because section one zero four has a specific exemption for income taxation and that those are not taxable there is no such exemption for the railroad retirement act and i might have to address for just one moment if i could the fica argument the difference between fica and the railroad retirement tax act is under fire an employee gets no credit that benefits him in the future so he pays no taxes on that but the entire system forever of retirement is entirely different and that if you look at the realm of the time aboard website you will find on that website all kinds of publications that have been there for decades advising employees who bothered to look at the website that an award or even a settlement  to railroad retirement taxes your honor and we have attached those to our appendix they have been there they have been there for decades they are aware of that fact and in fact counsel is aware of it too what hasn't occurred in the past for whatever reason and certainly not a reason not to enforce the law as written today is that in decades past there was not a recognition apparently or there was no union forstmann of what we now think the law that benefits not the railroads it cost the railroads money but nonetheless we're here today asking that you affirm that this deduction was proper and the railroad must pay its share of taxes and the employee must play his or her share of taxes because that's the mechanism that funds this program again this is irrelevant but it seemed more than passing strange that this law has not been enforced over the years i mean the taxation o is trying to do here which is to comply with what we believe is the correct interpretation of federal tax law there are a number of points that have been discussed already but i just want to emphasize that in order to get to the right conclusion i think for time lost are considered compensation for purposes of the r t a and that that taxes need to be withheld and this court has recognized that as well in the norton case so i don't think that should be too difficult of a leap but the more troubling issue i feel from what i've heard you talking about already so far is this one of four a two exception and that is more complicated but i think it's pretty clear when you look at it in context that the one hundred forty two exception for personal injury awards only applies and we acknowledge that that means that this no part of this award is subject to income tax but but it also be compensation well if that were true what was the point of the jury designating thirty thousand dollars of the award as pay for time lost the jury did that because there is both a benefit and a cost to mr most from that designation he will benefit by having increased retirement benefits when he reaches retirement age but on the other hand he needs to contribute to that system it's not a dollar for dollar match on a direct relationship but there is a there is definitely a relationship between the funding that goes into that program and the benefits that are paid out it's not included in their base lifetime earnings it doesn't affect their social security benefits whatsoever but in this case the mechanism for reporting because this three thousand dollars was designated as time payment for time lost it's going to be reported to the retirement board as credible time it's going to affect his benefits there's no reporting mechanism for them to say oh but wait he didn't pay the taxes on that he's going to get the benefits no matter what and so i think from a logical and from a policy and we believe it's well supported as well in the in the treasury regulation and the statute those two things need to match up would be the best explanation of the  wall judge well mike you're right it should be the employee's decision as to whether to take a deep furred benefit by having an allocation to pay for time lost or whether to take the money now mr loss case this allocation very peculiar to say the least to say that it's up to the railroad to decide whether to give the employee this so called benefit by having this allocation more logically the employee should make that decision by saying i want a specific allocation in time we're not saying they have a choice they're saying they're required to do this right but they haven't been required to do that ever in the decades that preceded two thousand and thirteen and i represent a firm that has go hundreds of that the l a judgments and i've got not paid one hundred percent on every single one of those judgments every single one of them including against be n s f and there's never been withholding for r t a tax purposes so there's they newly concocted argument for i don't know what reason and it's important to keep that in mind judgements have never had taxes withheld from up in the f a l a context up until the railroad try to start doing that's the commonly understood term for paying for money you lost because of the injury that you suffer instead the phrase is specifically pay for time lost and that's a specific provision regarding the railroad retirement act in terms of getting credits under the r r a system for our compensation in specific months to get you up to your minimum years of service in order qualify for the tier two pension and in order to get the maximum amount for your sixty months worth of compensation that's calculated as your average annual compensation for purposes of determining what your tear to pension benefit is so it's a very specific limited term now if the railroad and the employee come to a silent whereby the employee says what part of what i suffered isn't just the money that i'm out of pocket and the fact that i don't have a limb anymore part of what i suffered is that i getting get the few final few months of compensation they gets me to my thirty years of service to qualify me for a disability benefit under tier two i want an allocation to pay for time lost for these particular months to get there under those circumstances arguably that would be taxable because that falls within the definition the statute but that's not what the jury awarded in this case that's not what mr los asked for in this case mr los doesn't want any of that so why should it be foisted upon him just because the jury said you know part of the compensation pikeville to for the fact that you need got destroyed by the railroad is the money you would have earned had he had a good neat during that time period that's wast wages in a sense it's reimbursing him for the loss of the use need basically is what it is it's not pay for time was therefore not under that regimen of taxation if that argument even applied and i'm not necessarily conceding it does let me get back to one point let's look at the statutory language as argument about one up whether one zero for a two applies or not and keep in mind even if there's an overt award of lost wages and a personal injury judgment under one roof or a two it is not taxable income period no matter how designated twenty six u s c section thirty two zero one the tax on employees there is hereby imposed on the income of each employee a tax equal to  personal injury awards are not income according to congress section one of four a two there is no tax imposed under the railroad retirement tax act on satisfaction of the l a charges it's as simple as that