BNSF Railway Company v. United States
775 F.3d 743
5th Cir.2015Background
- BNSF seeks RRTA refunds for taxes paid on exercised NQSOs and on moving-expense benefits; district court granted summary judgment to BNSF; en banc granted, reversing and substituting the decision; issues involve whether NQSOs are RRTA compensation and whether moving expenses are excludable; moving-expense refunds involve employer and employee portions across 1994–1998 and notice issues; remand for expense-by-expense analysis and proper classification; court adopts Chevron step-two interpretation of RRTA compensation and remands on moving-expense parsing.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Are NQSOs compensation under RRTA? | BNSF: NQSOs are not money remuneration. | Government: NQSOs fall within compensation under RRTA. | NQSOs are compensation under RRTA. |
| How should moving expenses be treated under RRTA—§3231(e)(5) or §3231(e)(1)(iii)? | §3231(e)(1)(iii) should exclude bona fide business expenses. | §3231(e)(5) provides a specific exclusion; broad use of (e)(1)(iii) would render (e)(5) superfluous. | Interpretation harmonizes (e)(1)(iii) with (e)(5); moving expenses can be excluded consistently. |
| Did BNSF properly preserve moving-expense refund claims for 1996–1997 under the informal claim doctrine? | Informal claims preserved the refund rights. | No formal claim was perfected before suit; jurisdiction barred. | Claims for 1996–1997 dismissed for failure to perfect formal claims. |
| Should the district court parse disputed moving expenses to determine compensation vs. non-compensation and travel-related exclusions on remand? | All disputed moves are either non-compensation or excludable as travel-related. | Requires expense-by-expense analysis; not all moves are compensation. | Remand for expense-by-expense determination. |
Key Cases Cited
- Chevron U.S.A., Inc. v. Natural Resources Def. Council, Inc., 467 U.S. 837 (U.S. 1984) (establishes Chevron deference framework for agency interpretations)
- United States v. Quality Stores, Inc., 134 S. Ct. 1395 (S. Ct. 2014) (interprets Wages/compensation under FICA for RRTA guidance)
- Mayo Foundation for Med. Educ. & Res. v. United States, 131 S. Ct. 704 (S. Ct. 2011) (regulations receive Chevron deference; use surrounding exceptions to define scope)
- City of Arlington, Tex. v. F.C.C., 133 S. Ct. 1863 (S. Ct. 2013) (textual/contextual tools in statutory interpretation; ambiguity assessment)
- Hinck v. United States, 550 U.S. 501 (S. Ct. 2007) (well-established preemption considerations in statutory text)