# U ni te d S ta te s Co ur t of A pp ea ls

For the Eig hth Circu it

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No. 1 6- 35 74

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Uni on Paci fic Rai lro ad Co m pa ny, in i ts own cap aci ty and in it s ca pa ci ty as

su cces so r to Uni on Paci fic Rai lro ad Co m pa ny

ll ll ll ll ll ll ll ll ll ll l Pla in ti

ff - App el la nt

v.

Uni te d S ta te s o f Am eri ca

ll ll ll ll ll ll ll ll ll ll l Defe nd

an t - Ap pe ll ee

----- ----- ----- ----- ----- -----

Ass oc ia ti on of Am eri can Rai lro ad s

ll ll ll ll ll ll ll ll ll ll l

Amicu s o n Beh al

f o f Ap pe ll an t(s )

__ __ __ __ __ __

App eal fro m

Uni te d S ta te s Di st ric t Co ur t

fo r th e Dis tri ct of Ne br as ka - Om ah a

__ __ __ __ __ __

Su bm it te d: Ju ne 6, 2 01 7

Fil ed : Au gu st 1, 2 01 7

__ __ __ __ __ __

Befo re WOL LMAN, ARNOLD, and GRUENDER, Circu it Ju dg es

.

__ __ __ __ __ __

ARNOLD, Circu it Ju dg e.The Uni on Paci fic Rai lro ad Co m pa ny s eek s a refu nd of ab ou t $7 5 m il li on in

t a xe s th at it pa id th e fed eral go ve rn m en t fro m 19 91 to 20 07 un de r th e Rai lro a d

Ret ire m en t Tax Act. UP m ai nt ai ns th at th e RRTA di d no t req ui re it to pa y ta xe s whe n

it pa id em

pl oyees i n s t o c k or m ad e wha t are cal le d rat ifi cat io n pa y m en ts to un io nm em be r em pl oyees. The di st ric t co ur t reject ed th e refu nd req ue st s an d g r a n t e d

su m m ary jud gm en t t o t he go ve rn m en t. We reve rs e an d re m an d.

Anyon e who ha s earn ed a pa y ch eck in th is co un try i s pr ob ab ly fam i l i a r w i th

th e Fed eral In su ran ce Co nt rib ut io ns A c t

, if no t by na m e th en by effe ct

. The FICA

req ui res em

pl oyers to wit hh ol d a ta x equ al to a pe rcen ta ge of a n e m pl oyee's wag es

.

26 U.S.C. § 31 02 (a). In ad di ti on

, an em pl oyer m us t pa y a sh are of th e ta x. 26 U.S.C.

§ 31 11 (a). The se ta xe s fu nd so ci al -s ecu rit y an d m ed ic are be ne fit s. Se e Uni te d St at es

v. Qua li ty St or es , Inc

. , 13 4 S . Ct. 1 39 5, 1 39 9 (2 01 4)

.

Rai l carr ie rs an d th ei r em

pl oyees are no t su bjec t to FICA ta xa ti on ; in st ead

, th ey

pa y a so m ewh at di ffer en t ta x un de r th e RRTA. Se e 26 U.S.C. §§ 32 01

, 32 21 (a)– (b ).

As it s na m e su gg es ts

, RRTA ta xe s fu nd be ne fit s un de r th e Rai lro ad Ret ire m en t Act.

Se e BNS F Ry. Co

. v. Uni te d St a t e s

, 7 75 F.3 d 74 3, 75 0 (5 th Ci r. 20 15 ); 45 U.S.C.

§§ 23 1– 23 1v

. Co ng res s fir st en act ed ve rs io ns of th e RRTA an d th e RRA in 19 34 to

st ab il iz e th e rai lro ad in du st ry 's pri va te pe ns io n pl an s du rin g th e Dep res si on

. Co ur ts

st ru ck do wn th at st at ut e, se e R.R. Ret. Bd. v. Alt on R.R. Co

. , 29 5 U.S. 33 0, 36 2

(1 93 5)

, an d it s 19 35 rep la cem en t, se e Alt on R.R. Co

. v. R.R. Ret. Bd.

, 16 F. Su pp

. 95 5,

95 8– 59 (D.D.C. 19 36 ), bu t Con gr es s's 19 37 ve rs io n s ur vi ve d. To da y , th e RRA an d

RRTA res em

bl e bo th a so ci al welf

are pl an a n d a pr iv at e pe ns io n pr og ram ; on e ti er

of be ne fit s an d ta xe s co rres po nd s to wha t on e wou ld ex pe ct to rece i v e f ro m an d to

pa y fo r so ci al se cu rit y an d m ed ic are, whi le th e ot he r ti er ti es be ne fit s to earn in gs an d

care er s erv ic e. His qu ie rd o v . His qu ie rd o , 43 9 U.S. 5 72 , 57 4– 75 (19 79 ).

UP is a rai l carr i e r t h a t i s ob li ga te d to pa y RRTA ta xe s. Dur in g th e ti m e at

is su e, UP pa id em

pl oyees in co m

pa ny st oc k in ad di ti on to a m on et ary sa la ry

. UP pa id

-2

-RRTA ta xe s on th e st oc k pa y m en ts

, bu t no w it as ks th e go ve rn m e nt to refu nd th e

m on ey be cau se

, it sa y s, th e RRTA di d no t req ui re it to m ak e t h os e pa y m en ts

. The

go ve rn m en t di sa gr ees

, arg ui ng th at em pl oyers who pa y em

pl oym en t ta xe s un de r th e

FICA are ob li ga te d to pa y ta xe s on st oc k pa y m en ts

, an d th e In te rn al Rev en ue Serv ic e,

by reg ul at io n, tre at s th e FICA an d th e RRTA th e sa m e on th is m at te r. Se e 26 C.F.R.

§ 31 .32 31 (e)– 1( a)(1 ). The di st ric t co ur t ag reed wit h th e go ve rn m en t's in te rp ret at io n

of th e st at ut es an d reg ul at io ns at is su e, so i t gr an te d su m m ary jud gm en t in th e

go ve rn m en t's fav or an d de ni ed UP's m ot io n fo r su m m ary jud gm en t, whi ch jud gm en ts

we rev ie w de no vo

. Dun ha m v. Por tf ol io Reco ver

y Ass oc s., LLC

, 66 3 F.3 d 99 7, 10 00

(8 th Cir . 20 11 ).

Gen eral ly, whe n Co ng res s au th or iz es an ag en cy to is su e reg ul at io ns

in te rp ret in g a st at ut e th at th e ag en cy en fo rces

, we de fer to th e ag en cy 's in te rp ret at io n

of an a mb i g u ou s st at ut e so lo ng as th e in te rp ret at io n is reas on ab le

. W e m us t fir st

de te rm in e whe th er th e st at ut e is am bi gu ou s, an d if no t, we ap pl y th e st at ut e as

writ te n; if it is am

b ig uo us

, we m

us t de ci de whe th er th e ag en cy 's in te rp ret at io n is

reas on ab le

. Enc in o Mo to rc ar s, LL C v. Na va rr o , 13 6 S . Ct. 2 11 7, 2 12 4– 25 (20 16 ).

Beg in ni ng

, as we m

us t, wit h th e st at ut or y te xt

, se e Hen s o n v

. Sa nt an de r

Co ns ume r USA In c.

, 13 7 S. Ct

. 17 18

, 17 21 (2 01 7)

, we se e th at th e RRTA ta x is ba se d

on an em pl oyee's "co m

pe ns at io n," whi ch is ge ne ral ly de fin ed as "an y fo rm of m on ey

rem un erat io n pa id to an in di vi du al fo r s e r v i c e s r e n d ered as an em pl oyee to on e or

m or e em pl oyers." 26 U.S.C. § 32 31 (e)( 1) . On t he ot he r ha nd , th e FIC A lev ie s a t ax

on an em pl oyee's "wag es ," wh i c h a r e "al l rem un erat io n fo r em

pl oym en t, in cl ud in g

th e cas h va lu e of al l rem

un erat io n (in cl ud in g be ne fit s) pa id in an y m ed iu m ot he r th an

cas h." 26 U.S.C. § 3 12 1( a). It se em s to us th at th e FICA swe ep s m or e br oa dl y th an

th e RRTA: The FICA ex pr es sl y m en ti on s th e cas h va lu e of rem un erat io n no t pa id in

cas h, su ch as pa y m en ts in pr op ert y

, whe reas th e RRTA do es no t. And th e de te rm in er

"al l" qu al ifi es "re m

un erat io n" in th e FICA de fin i t i o n

, ap pe ari ng to m ak e

-3

-"re m

un erat io n" un li m it ed

, whe reas th e wor d "m on ey " qu al ifi es "re m un erat io n" in th e

RRTA.

Bu t th e pa rti es di sp ut e why th e wor d "m on ey " pr eced es "re m un erat io n" in th e

RRTA. UP m ai nt ai ns th at "m on ey " tak es on th e or di na ry m ean in g it ha d at the ti m e

th e RRTA was en act ed si nc e th e RRTA do es no t de fin e it

. Ci ti ng a h an df ul of

di ct io na rie s, UP arg ue s th at "m on ey " m ean t "a m ed iu m of ex ch an ge ." UP no te s th at

"m on ey " can ha ve a m or e res tri ct iv e m ean in g, su ch as refe rri ng on ly to cas h or co in s,

bu t si nc e th e ph ras e "an y fo rm of " pr e c e d e s t h e wor d "m on ey ," th en it se em s th at

Co ng res s in te nd ed th e RRTA to reac h rem un erat io n pa id in an y m ed iu m of ex ch an ge

,

n ot jus t cas h or co in s. To th e go ve rn m en t an d th e di st ric t co ur t, on th e ot he r h a n d

,

"m on ey " do es no t do an y wor k; it is a s u p e rfl ui ty, ak in to it s im po te nc e in ph ras es

li ke "m on ey jud gm en t" or "m on ey da m ag es ." Alt ern at iv el y

, th ey po in t ou t, ci ti ng

th ei r own ha nd fu l of di ct io na rie s, th at "m on ey " can ha ve an ex pa ns i v e m ean in g

rel at in g to cap it al or fin an ce in ge ne ral , e sp eci al ly wh en "m on ey " do es th e wor k of

an ad jecti ve

.

W e th in k th at UP ha s th e be tt er arg um en t. Fi rs t, we are no t co nv in ced th at th e

ex pa ns iv e de fin it io n of "m on ey " th at th e go ve rn m en t ad va nc es refl ect s th e or di na ry

,

co m m on m ean in g of t ha t t erm

. Se e Per ri n v . Uni te d St at es

, 44 4 U.S. 37

, 42 (1 97 9)

.

In fact

, on e of th e di ct io na rie s o n w h i c h th e go ve rn m en t rel ie s no te s th at in it s

"p op ul ar se ns e, 'm on ey ' m ean s an y cu rren cy

, to ke ns

, ba nk -n ot es

, or ot he r ci rcu la ti ng

m ed iu m in ge ne ral us e as th e rep res en ta ti ve of va l u e

. " S e e Bl ack 's Law Dict io na ry

12 00 (3 d ed

. 19 33 ). A nu m be r of co nt em

po rary le ga l au th or it ie s ag ree. UP po in ts to

an in st ru ct iv e cas e de ci de d ne a r t h e ti m e th at th e RRTA was en act ed in whi ch a

te st at rix le ft he r "m on ey " to on e pe rs on a n d he r pe rs on al pr op ert y to an ot he r. In re

Boy le 's Est at e

, 37 P.2 d 84 1, 84 1 (Cal

. Dis t. Ct

. App

. 19 34 ). The tri al co ur t award ed

st oc k t ha t t he de ced en t h ad own ed to th e le ga te e of th e "m on ey ." The ap pe al s co ur t

rev ers ed

, no ti ng th at "[t ]her e i s no do ub t th at th e wor d 'm on ey ' whe n ta ke n in it s

or di na ry an d gr am

m at ic al se n s e d oe s no t in cl ud e co rp or at e st oc ks ," an d no th in g

-4

-in di cat ed th at "m on ey " was u se d " in an y sen se ot he r th an it s or di na ry an d acce pt ed

m ean i n g

. " Id

. at 84 2. The co ur t ex pl ic it ly co ns id ered br oa de r de fin it io ns of m on ey

bu t di d no t ap pl y th em

. Our co ur t, m or eo ve r, ex pl ai n e d d u r i n g t ha t sa m e era th at

"[t ]he so le fu nc ti on of m on ey is as a ne ces sa ry m ed iu m of ex ch an ge in al l co m m erce

whi ch ha s p as se d t he ba rte r st ag e," Emery Bir d T ha yer Dry Go od

s C o. v. Will ia ms

,

10 7 F

. 2 d 9 65

, 97 1 (8 th Ci r. 19 39 ), whi ch se em s in co ns is te nt wit h th e no ti on th at

"m on ey " in it s ord in ary co nt ex t m ean s any pr op ert y wha ts oe ve r. Mo re recen tl y

, th e

Uni te d S ta te s Tax Co ur t s ai d:

A fin al pr ob l e m we ha ve wit h ex te nd in g th e de fin it io n of "m on ey

rece iv ed " in se ct io n 10 01 (b ) to en co m pa ss pr efer red st oc k is it s g r e a t

di ss im il ari ty to m on e y in an y pr act ic al se ns e. Ass um in g wit ho ut

de ci di ng th at th e te rm in cl ud es no t on ly act ua l m o n e y, b ut "m on ey

eq ui va le nt s" as well

, it i s d i f f ic ul t to se e ho w st oc k of an y so rt co ul d

reas on ab ly be v ie wed as s uc h.

Nes tl e Hol di ng

s, In c. v. C.I.R.

, 94 T.C. 80 3, 81 4– 15 (T.C. 19 90 ). In sh or t, "[t ]here are

nu m ero us way s to de fin e 'm on ey s,' bu t di ct io na rie s m os tl y ag ree th at th e te rm refe rs

to a ge ne ral ly acce pt ed m ed iu m of ex ch an ge ." In re Hok ul an i Sq ua re

, In c.

, 77 6 F.3 d

10 83 , 10 85 –8 6 (9 th Cir . 20 15 ).

Seco nd

, a reg ul at io n ad op te d ab ou t fo ur m on th s aft er th e pa ss ag e of th e RRTA

ex pl ai ne d : " T he te rm co mpe ns at io n m ean s al l rem un erat io n in m on ey

, or in

so m et hi ng whi ch m ay be us ed i n l i e u o f m on ey (s cri p an d m erch an di se or de rs

, fo r

ex am pl e), whi ch is earn ed by an in di vi du al fo r se rv ic es pe rfo rm ed as an em pl oyee."

Em pl oyers' Tax

, Em

pl o ye e s ' Ta x, an d Em

pl oyee Rep res en ta ti ve s' Tax Und er th e

Carr ie rs Tax in g Act of 19 37

, 2 Fed

. Reg

. 21 98

, 22 02 (Oct

. 15

, 19 37 ) (co di fie d at 26

C.F.R. § 41 0.5 (1 93 8) ). If m on ey m ean t ei th er no th in g or al l pr op er t y, a s th e

go ve rn m en t as se rts

, th en th ere wou ld be no reas on to no te th at sc rip or m erch an di se

or de rs al so co ns ti tu te d "c o mp e n s a ti on ." Tho se ex am pl es are il lu m in at in g on ly if

"m on ey " h as a m or e res tri ct iv e m ean in g.

-5

-Thi rd

, co ns id er th e st at ut or y co nt ex t. Co ng res s en act ed th e F IC A's pr ed eces so r

i n 1 9 3 5

— th e sa m e y ear whe n Co ng res s m ad e it s se co nd at te m pt in pa ss in g th e

R R TA

. I n th e 19 34

, 19 35

, an d 19 37 ve rs io ns of th e RRTA, Co ng res s ch o s e a

di f fere nt wor d— co m

pe ns at io n— fo r th e RRTA fro m th e on e it ch os e fo r th e

FICA— wag es

. The se di ffer en ces in th e rel ev a n t te rm s cal l to m in d th e of t-c it ed

pr in ci pl e th at di ffer en ces in s t a tu to ry la ng ua ge co nv ey di ffer en ces in m ean in g.

Hen so n

, 13 7 S. Ct

. at 17 23

. And whe n Con gr es s do es no t ad op t ob vi ou s al te rn at iv e

la ng ua ge

, th e na tu ral im

pl ic at io n is th at i t d i d no t in te nd th e al te rn at iv e. Adv oc at e

Hea lt h Ca re Net wo rk v. St ap le to n

, 13 7 S. Ct

. 16 52

, 16 59 (2 0 1 7 )

. C o n gr es s ha s,

m or eo ve r, pr es erv ed th e di st in ct io n. In de fin in g th e te rm "s uc ces so r em pl oyers," th e

RRTA ad op ts th e FICA de fin it io n ex cep t th at Co ng res s su bs ti tu te s "co m pe ns at io n"

(as th e R R TA d e f

i ne s it ) whe re th e FICA sa y s "re m un erat io n." Se e 26 U.S.C.

§ 32 31 (e)( 2) (C)( ii )—( ii i). W e th in k th at Co ng res s di d th is be cau se "co m pe ns at io n,"

whi ch in cl ud es on ly m on ey rem un erat io n, is ne ces sa ril y a su bs et of "re m un erat io n,"

whi ch Co ng res s us es in de fin in g FICA "wag es ." It wou ld m ak e no se ns e fo r Co ng res s

to swap th es e te rm s i f "co m pe ns at io n" m ean t t he same thi ng as "re m un erat io n" an d

"wag es " un de r th e FICA. And fin al ly, th e go ve rn m en t an d th e di st ric t co ur t pr op os e

an in te rp ret at io n th at rai se s a red fla g : Wh en in te rp ret in g a st at ut e, co ur ts typic al ly

do no t pr es um e th at C o ng res s ha s us ed su pe rfl uo us wor ds in it s en act m en ts

.

St ap le to n , 13 7 S . Ct. at 16 59

.

The go ve rn m en t in si st s, ho wev er, th at va rio us no n- cas h ex em pt io ns fro m th e

ge ne ral de fin it io n of "co m pe ns at io n " sh ow th at "m on ey rem un erat io n" m ean s

so m et hi ng br oa de r th an jus t m ed iu m s of exch an ge or els e th e ex em pt io ns wou ld be

su pe rfl uo us

. Wh y wou ld Co ng res s, th e arg um en t go es

, crea te ex em pt io ns fo r

no n- cas h pa y m en ts if th e ge ne ral de fin it io n al read y ex cl ud ed th o s e p a ym en ts ? The

Fi fth Ci rcu it rel ie d on th is arg um en t to co nc lu de th at th e st at ut e is at le as t am bi gu ou s.

Se e BNS F

, 77 5 F.3 d at 75 4– 55

. The go ve rn m en t em ph as iz es th at th e Su pr em e Co ur t

to ok a si m il ar an al y ti cal ta ck whe n in te rp ret in g th e te rm "wag es " un de r th e FICA, so

we sh ou ld do so he re. Se e Qua li ty St or es , 13 4 S . Ct. at 14 00

.

-6

-W e ha ve no qu arre l in ge ne ral wit h th e ap pr oa ch th at th e go ve rn m en t su gg es ts

,

an d we reco gn iz e th at th e Su pr em e Co ur t ha s us ed it —b ut in a di ffer en t co nt ex t. W e

de cl in e to g i ve it an y weig ht he re be cau se it res ts on a fal se pr em is e in th e RRTA

co nt ex t. Non e of th e ex em pt io ns th at th e go ve rn m en t id en ti fie s wil l be ren de red

su pe rfl uo us un de r ou r read in g of th e st at ut e b e c au se each can in cl ud e pa y m en ts

co ns is te nt wit h a m ed iu m -o f-ex ch an ge in te rp ret at io n of "m on ey ." Tak e, fo r ex am pl e,

th e ex em pt io n fo r rem

un erat io n in "q ua li fi e d st oc k op ti on s," 26 U.S.C. § 32 31 (e)( 12 ),

th at th e go ve rn m en t rel ie s on as il lu st rat in g it s po in t. Tha t ex em pt io n sa y s th at

"co m pe ns at io n" do e s n ot in cl ud e an y rem un erat io n on acco un t of a tra ns fer or

di sp os it io n of a sh are of st oc k as th e res ul t of an ex erci se of c e rta in qu al ifi ed st oc k

op ti on s. (The pa rti es he re, by t h e w a y, a g ree th at th e op ti on s in qu es ti on are no nqu al ifi ed st oc k op ti on s.) The g o v e r n me nt co nt en ds th at if, as UP su gg es ts , " m on ey

rem un erat io n" in cl ud es on ly rem un erat io n pa i d in m ed iu m s of ex ch an ge li ke cas h,

th en th e ex em

pt io n fo r qu al ifi ed st o c k o p t io ns ad ds no th in g an d is th eref or e

su pe rfl uo us

. Bu t wha t th is arg um en t om it s is th at cas h p a ym e n t s so m et im es

acco m pa ny th e ex erci se of a st oc k op ti on

, as

, fo r in st an ce, whe n th e nu m be r of sh ares

a n e m pl oyee can acq ui re at ex erci se is no t a who le nu m be r, or if th e rem

un er a t i v e

pr og ram un de r whi ch th e op ti on was tra ns ferr ed gi ve s em p l o ye e s bo nu se s or

ad di ti on al co m

pe ns at io n, in cas h o r ot he r pr op ert y

, at th e ti m e of ex erci se

. The IRS

reco gn iz es th es e po ss ib il it ie s. Se e 26 C.F.R. § 1.4 22 –5 (c). The go ve rn m en t do es no t

di sp ut e UP's co nt en ti on th at m on ey is so m et im es rece iv ed whe n a qu al i f i e d st oc k

op ti on is ex erci se d; in st ead

, it qu es ti o n s w h y C o n gr es s wou ld no t al so ex pl ic it ly

ex em pt no n- qu al ifi ed st oc k op ti on s. W e th in k it i s C on gr es s's pr ero ga ti ve to gi ve

pr efer en ti al ta x tre at m en t to cert ai n ki nd s of op ti on s. The po in t is th at th e ex em pt io n

fo r qu al ifi ed st oc k op ti on s st il l ha s m ean in g ev en if we gi ve "m on ey " it s or di na ry

m ean in g.

T h e go ve rn m en t li ke wis e cal ls ou r at te nt io n to th e ex em pt io n fo r he al th an d

di sa bi li ty in su ran ce, se e 26 U.S.C. § 32 31 (e)( 1) (i)

, bu t th is ex em pt io n ex cl ud es fro m

co m pe ns at io n "an y pa y m en t

. . . m ad e to

, or on be ha lf of

, an em pl oyee

. . . on acco un t

-7

-of s i ck ne ss or acci de nt di sa bi li ty or m ed ic al or ho sp it al iz at io n ex pe ns es in co nn ect io n

wit h si ck ne ss or acci de nt di sa bi li ty or d e at h." Si nc e th is ex em pt io n co ve rs cas h

pa y m en ts m ad e to an em

pl oyee, it wou ld no t be ren de red su pe rfl uo us by in te rp ret in g

"m on ey " t o m ean m ed iu m s o f ex ch an ge

.

Ano th er pr ov is io n of rel e v a n c e ex em pt s "t he va lu e of m eal s or lo dg in g

fu rn is he d by or on be ha lf of th e em pl oyer if at th e ti m e of su ch fu r n i s h i n g it is

reas on ab le to be li ev e th at th e em pl oyee wil l be ab le to e x c lu de su ch it em s fro m

in co m e un de r se ct io n 11 9." Se e 26 U.S.C. § 32 31 (e)( 9)

. Sect io n 11 9 is th e in co m e-t ax

se ct io n rel at i n g t o m eal s an d lo dg in g. It co nt ai ns a su bs ect io n rel at in g to m on ey

pa y m en ts th at an em

pl oyee m us t pa y an em

pl oyer fo r em

pl oyer-p ro vi de d m eal s ev en

if th e em pl oyee de cl in es th e m eal

. Se e 26 U.S.C. § 11 9( b) (3 ). Sect io n 11 9( b) (3 ) tre at s

th os e ci rcu m st an ces fo r ta x pu rp os es as if th e em pl oyer ha d ne ve r pa id th e em pl oyee

th at m on ey

. Bec au se it is ex cl ud ab le un de r § 11 9, th e cas h pa y m en t to th e em pl oyee

is als o e xc lu da bl e u nd er t he RRTA, so th is ex em pt io n wo ul d re ta in m ean in g.

W e co ns id er, fin al ly, th e fri n g e

- b e n efi t ex em pt io n in § 32 31 (e)( 5)

, whi ch

ex em pt s "an y be ne fit pr ov id ed to or on be ha lf of an em pl o ye e if at th e ti m e su ch

be ne fit is pr o v i d e d i t is reas on ab le to be li ev e th at th e em pl oyee wil l be ab le to

ex cl ud e su ch be ne fit s fro m in co m e un de r se ct io n 74 (c), 10 8( f)(4 ), 11 7, or 13 2." Bu t

each of th os e se ct io ns in cl ud es a m ed iu m -o f-ex ch an ge co m po ne nt

. Sect io n 74 (c)

ex cl ud es em

pl oyee-ach ie ve m en t award s fro m in co m e, bu t th es e award s can in cl ud e

so m e gi ft cert ifi cat es

, se e 26 C.F.R. § 1.2 74 –3 (b )(2 ), whi ch fal l wit hi n th e m ed iu m

of -ex ch an ge de fin it io n of m o n ey

. Sect io n 10 8( f)(4 ) is a lo an -rep ay m en t pr og ram

,

whi ch can in cl ud e pa y m en ts in m ed iu m s of ex ch an ge li ke cas h. Sect io n 11 7 de al s

wit h sc ho la rs hi ps

, whi ch can in vo lv e cas h pa y m en ts

. Fi na ll y

, § 13 2 co ve rs ce r t a in

ot he r fri ng e be ne fit s, so m e of whi ch in vo lv e cas h pa y m en ts

, li ke m o v i ng -ex pe ns e

rei m bu rs em en t an d ot he r cas h rei m bu rs em en ts . I n sh or t, th is ex em pt io n wou ld st il l

m ean so m et hi ng un de r UP's de fin it io n of "m on ey rem un erat io n" be cau se each of th e

ci te d se ct io ns in cl ud es a m ed iu m -o f- e x ch an ge co m po ne nt

. W e are th eref

or e no t

-8

-co nv in ced th at UP's in te rp ret at io n of "m on ey " wou ld m ean th at t he se ex em pt io ns

wou ld do no work

.

Th e g o v e r nm en t po in ts ou t th at th e FICA co nt ai ns so m e of th e sa m e

ex em pt io ns ve rb at im

, pr es um ab ly im pl y in g th at th e ex em

pt io ns m us t ha ve th e sa m e

br ead th in each of th e ta x sc he m es

. W e do no t un de rs ta nd why th is is ne ces sa ril y so

.

The ex em pt io ns m ay ap pl y to m or e tra ns act io n s u n d e r th e FICA, bu t th at do es no t

m ean th at th ey la ck m ean in g un de r ou r in te rp ret at io n of the RRTA. And th ou gh th e

pa y m en ts by m ed iu m s of ex ch an ge m ay no t be freq ue nt in th e ci rcu m st an ces to whi ch

th os e ex em

pt io ns ap pl y co m

pa red to pa y m en ts m ad e in ot he r pr op ert y

, th e po in t is

th at no ex em

pt io n i s empty of m ean in g.

Ano th er reas on th at th e ex em pt io n s d o n o t do m

uc h to su pp or t th e

go ve rn m en t's vi ew is th at th ey can be m ad e to in di cat e th at "m on ey " is no t as br oa d

as th e go ve rn m en t su gg es ts

. Th e R R TA ex em pt s cas h ti ps un de r $2 0. 26 U.S.C.

§ 32 31 (e)( 3)

. The FICA, on th e ot he r ha nd

, ex em pt s "t ip s pa id in an y m ed iu m ot he r

th an cas h" an d c a s h ti ps un de r $2 0. 26 U.S.C. § 31 21 (a)( 12 ). It is te ll in g th at

Co ng res s di d no t si m il arl y ex cl ud e "t ip s pa id in an y m ed iu m ot he r th an cas h" in th e

RRTA be cau se th is di ffer en ce su gg es ts th at th e ge ne ral de fin it io n of "co m pe ns at io n"

al read y ex cl ud ed su ch ti ps

.

Perh ap s m os t im

po rta nt

, Co ng res s en act ed th e ex em pt io ns y ears aft er en act in g

th e ge ne ral de fin it io n of co m pe ns at io n. Und er th e go ve r n men t ' s th eo ry

, th es e

la te r-ad op te d ex em

pt io ns wou ld im

pl ie dl y rep eal ou r read in g of th e o r i g i na l

de fin it io n of "m on ey rem

un erat io n." W e do no t fav or a co ns tr uc tio n th at la te r-en act ed

st at ut es im

pl ie dl y rep eal an earl ie r on e u nl es s t he in te nt io n o f Co ng res s t o re pe al is

cl ear a nd m an ife st

. Na t'l Ass 'n of Home Bui ld er s v. Defs . o

f W il dl if e , 5 51 U.S. 64 4,

66 2 (2 00 7)

. The la te r st at ut e m us t ex pr es sl y co nt rad ic t th e earl ie r on e, un le ss su ch a

co ns tru ct io n i s a b s o l u t e l y ne ces sa ry to gi ve th e wor ds of th e la te r st at ut e an y

m ean in g. As jus t ex pl ai ne d, th e la te r-en act ed ex em pt i o n s h a ve m ean in g, an d

-9

-Co ng res s ne ve r an no un ced an in te nt i o n to al te r th e or ig in al sc op e of "m on ey

rem un erat io n" to so m et hi ng be y on d a m ed iu m of ex ch an ge . We ke ep in m in d wh at

Ju st ic e Car do zo sai d a bo ut im pl ie d re pe al s: "We cann ot be li ev e th at in th is pro ces s

of am en dm en t th e wor d 'se am en ' lo st th e br oa d m ean in g th at it ha d i n t he law to be

am en de d, an d was na rro wed by th e ex cl us io n of a pa rti cu la r sp eci es of se am en

, i.e.,

se am en ha vi ng co m

m an d. The ch an ge is to o su dd en to be acce pt ed as in te nd ed un le ss

un m is ta ka bl y de c l a r e d

. " W ar ne r v. Gol tr a

, 29 3 U.S. 15 5, 15 9 (1 93 4)

. In sh or t, we

d i s ag ree th at th e st at ut or y ex em pt io ns to th e de fin it io n of "co m pe ns at io n" r e v e a l

m uc h, i f an y th in g, ab ou t t he m ean in g o f "m on ey rem un erat io n."

W e reco gn iz e th at on e of ou r si st er ci rcu it s rece nt ly he ld th at pa y m en ts in st oc k

are a fo rm of m on ey rem

un erat io n bec au se st oc k h as be co m e p ract ic al ly equ iv al en t

to cas h: "jus t as to da y 10 0 di m es is th e ex act m on et ary eq ui va le nt of a $1 0 bi ll ," th e

co ur t as se rt e d

, " s o is a st oc k cert ifi cat e th at can be so ld fo r $1 0." W is . C en t. Lt d. v.

Uni te d St at es

, 85 6 F.3 d 4 9 0, 49 2 (7 th Ci r. 20 17 ). W e res pe ct fu ll y di sa gr ee. Eve n

st oc ks wit h read il y as cert ai na bl e sh are pr ic es are n ot "m on ey " b ecau se th ey are no t

m ed iu m s of ex ch a n ge

. One can no t pa y fo r pr od uc e at th e lo cal gr oc ery st or e wit h

st oc k. Li ke an y type of pr op ert y , s to ck do es ha ve cas h va lu e an d can be ex ch an ge d

fo r m on ey

, bu t we d o n o t t h i n k it is a m ed iu m of ex ch an ge

. The Sev en th Ci rcu it

ex pr es sl y reject ed th e id ea th at it s ho ld in g ren de red pa y m en ts in an y fo rm of pr op ert y

ta xa bl e un de r th e RRTA, no ti ng th at

, fo r ex am pl e, an em pl oyer wou ld no t ha ve to pa y

RRTA ta xe s on a bi rth da y cak e. Bu t as th e di ss en t in th at cas e reco gn iz ed

, se e id

. at

49 4 n.1

, ev en a cak e ha s m ark et va lu e an d can be ex ch an ge d fo r m on ey

. W e di sc ern

no li m it in g pr in ci pl e in th e go ve rn m en t's ex pa ns iv e in te rp ret at io n th at wou ld pr ev en t

al l pr op ert y fro m be in g swe pt in to th e RRTA's te xt

, s o we de cl in e to fo ll ow th e

Sev en th Cir cu it 's l ead

.

Fi na ll y

, th e go ve rn m en t m ai nt ai ns th at we sh ou ld in te rp ret th e RRTA to reac h

as far as th e FICA be cau se th e t wo st at ut es sh are a si m il ar pu rp os e. Vag ue no ti on s

ab ou t th e st at ut es ' pu rp os es , h owe ve r, can no t be us ed to ov erri d e t he ir act ua l te xt s.

-1 0-Se e Hen so n

, 13 7 S. Ct

. at 17 25

. W e al so de cl in e to wad e in to th e po li cy pr os an d co ns

of co ns tru in g th e st at ut es di ffer en tl y or fo r no t ta xi ng rem un erat io n in st oc k un de r th e

RRTA. Eve n if we th ou gh t th at th e go ve rn m en t h a d t h e b e t te r of th e po li cy

arg um en ts

, we can no t lo ok pa st th e RRTA's pl ai n la ng ua ge

. Se e Sa nd oz In c. v. Amgen

In c.

, 13 7 S. Ct

. 1 6 6 4, 16 78 (2 01 7)

. So we refu se th e go ve rn m en t's in vi ta ti on to

rem ov e " mo n e y" f

r om th e bo ok s, ei th er by eras in g it en ti rel y or by st ret ch in g it so

wid e th at it en co m

pa ss es ev erythi ng

, an d su gg es t th at th e go ve rn m en t is be tt er of f

se ek in g a n a m en dm en t o f th e st at ut e fro m Co ng res s.

Bec au se we co nc lu de th at th e RRTA un am bi gu ou sl y do es no t req ui re pa y m en t

of RRTA ta xe s on rem

un erat io n in st oc k, we owe no de fere nc e to th e IRS's reg ul at io n

de fin in g th e RRTA's "co m pe ns at io n" an d th e FICA's "wag es " id en ti cal ly, an d we

rev ers e th e di st ric t co ur t's gr an t of su m m ary jud gm en t to th e go ve rn m en t an d de ni al

of UP's m ot io n fo r su m

m ary jud gm en t o n t hi s i ss ue

.

W e tu r n n ow to th e ot he r br oa d is su e in th e cas e an d co ns id er whe th er th e

RRTA req ui red UP to pa y ta xe s whe n it m ad e so -cal le d rat ifi cat io n pa y m en ts to

em pl oyees whe n th ei r un io ns rat ifi ed co ll ect iv e ba rg ai ni ng ag reem en ts

. The se

pa y m en ts were in te nd e d to en co ur ag e un io ns to rat ify co ll ect iv e ba rg ai ni ng

ag reem en ts ; th ey typic al ly req ui red th e reci pi en t to be em pl oyed wit h UP on a cert ai n

da te

, an d th e am ou nt pa id ou t was ti ed to th e nu m be r of ho ur s th at th e em

pl oyee ha d

wor ke d t he pre vi ou s year.

Eve ry on e ag rees th at th e rat ifi cat io n pa y m en ts are "m on ey rem un erat io n." UP

arg ue s, th ou gh

, th at no ta x is du e un de r th e RRTA be c a u s e t h es e pa y m en ts are no t

"fo r se rv ic es ren de red " by th e em pl oyee. Se e 2 6 U.S.C. § 32 21 (a)– (b ). The RRTA

sa y s th at a pe rs on "i s i n t he ser vi ce o f an em pl oyer" if th at pe rs on "i s su bjec t to th e

co nt in ui ng au th or it y of th e em pl oyer to su pe rv is e an d di rect th e m an ne r of ren di ti on

of hi s se rv ic e," "i s ren de rin g pr of es si on al or te ch ni cal se rv ic es an d is in te gr at ed in to

th e st aff of th e em

pl oyer," or "i s ren de rin g, on th e p r op ert y us ed in th e em pl oyer's

-1 1-op erat io ns

, o t h e r p e r s o na l se rv ic es th e ren di ti on of whi ch is in te gr at ed in to th e

em pl oyer's op erat io ns ." 26 U.S.C. § 32 31 ( d ) ( 1 )

. The di st ric t co ur t reject ed UP's

arg um en t wit ho ut refe rri ng to th is st at ut e; it dr ew, in st ead

, fro m Q u al it y St or es

, whe re

th e Su pr em e Co ur t in te rp ret ed th e FICA as ap pl y in g to wag es pa id fo r "n ot on ly wor k

act ua ll y do ne bu t th e en ti re em pl oyer-em

pl oyee rel at io ns hi p fo r whi ch co m pe ns at io n

is pa id ." 1 34 S. Ct. at 14 00

.

W e di sa gr ee wit h th e di st ric t co ur t's ap pr oa ch be cau se in s t e a d o f ta xi ng

pa y m en t fo r "s erv ic es ," th e FICA ta xe s pa y m en t fo r "em pl oym en t," whi ch is de fin ed

br oa dl y as "an y se rv ic e, of wha te ve r na tu re, pe rfo rm ed

. . . by an em pl oyee fo r th e

pe rs on em

pl oyin g h i m." 26 U.S.C. § 31 21 (b ). Tran sp la nt in g th e FICA's de fin it io n

in to th e RRTA di sr eg ard s th e RRTA's fo cu s on th e au th or it y an d co nt ro l t ha t an

em pl oyer ex erci se s ov er an em pl o ye e in de te rm in in g whe th er th e em pl oyee is

pe rfo rm in g a "s erv ic e."

W e co n c l u d e t ha t th e rat ifi cat io n pa y m en ts were no t m ad e to em pl oyees fo r

se rv ic es ren de red to UP be cau se UP do es no t ex erci se co nt ro l ov er whe th er a un io n

rat ifi es a co ll ect iv e ba rg ai ni ng ag reem en t. In de ed

, rat ifi cat io n is a un io n act iv it y th at

th e Rai lway Lab or Act pr ot ect s fro m em pl oyer in te rfer en ce si nc e th at la w is de si gn ed

"t o pr ov id e fo r th e co m

pl et e in de pe nd en ce of carr ie rs an d of em pl oyees in th e m at te r

of sel f-o rg an iz at io n." 45 U.S.C. § 1 51 a(3 ).

The go ve rn m en t al so em

ph as iz es th at UP m ad e th e rat ifi cat io n pa y m en ts fro m

it s pa y ro ll

, whi ch

, it m ai nt ai ns

, m ean s th ey were "fo r se rv ic es ren de red ." It is tru e th at

pa y ro ll pa y m en ts are pr es um ed to be co m pe ns at io n fo r se rv ic es ren de red

. 26 C.F.R.

§ 31 .32 31 (e)– (1 )(a) (2 ). If th e RRTA co ve red ev ery pa y m en t th at an em pl oyer m ad e

to an em pl oyee, th en th e pa y ro ll pr es um pt io n wou ld effe ct iv el y be irr eb ut ta bl e

de sp it e t h e r e gu la ti on 's ad m on it io n th at it is no t, an d he re UP ha s reb ut te d th e

pr es um pt io n. Fi rs t, be cau se th e un io ns ' m em be rs w e r e em

pl oyed by se ve ral

co m pa ni es

, UP si m

pl y us ed it s p ay

ro ll de pa rt m en t to de te rm in e whi ch un io n m em be rs

-1 2-act ua ll y wor ke d at UP rat he r th an fo r a di ffer en t co m pa ny. UP fu rth er ex pl ai ne d th at

it s pa y ro ll de pa rt m en t, un li ke it s acco un ts -p ay ab le de pa rtment, was se t up to wit hh ol d

in co m e ta xe s o n t he rat ifi cat io n p ay m en ts

.

Th e di st ric t co ur t th eref

or e erre d in gr an ti ng th e go ve rn m en t's m ot io n f o r

su m m ary jud gm en t an d de nyin g UP's m ot io n fo r su mm a r y jud gm en t be cau se th e

RRTA di d no t req ui re UP to pa y ta xe s whe n it pa id em pl o ye e s in st oc k or m ad e

rat ifi cat io n p ay m en ts to th em

.

Rev ers ed an d re m an de d.

__ __ __ __ __ __ __ __ __ __ __ __ __ __ __

-1 3-