Wisconsin Central Ltd. v. United States

(Slip Opinion) OCTOBER TERM, 2017 1
Syllabus
NOTE: Where it is feasible, a syllabus (headnote) will be released, as is
being done in connection with this case, at the time the opinion is issued.
The syllabus constitutes no part of the opinion of the Court but has been
prepared by the Reporter of Decisions for the convenience of the reader.
See United States v. Detroit Timber & Lumber Co., 200 U.S. 321, 337.
SUPREME COURT OF THE UNITED STATES
Syllabus
WISCONSIN CENTRAL LTD. ET AL. v. UNITED STATES
CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR
THE SEVENTH CIRCUIT
No. 17–530. Argued April 16, 2018—Decided June 21, 2018
As the Great Depression took its toll, struggling railroad pension funds
reached the brink of insolvency. During that time before the rise of
the modern interstate highway system, privately owned railroads
employed large numbers of Americans and provided services vital to
the nation’s commerce. To address the emergency, Congress adopted
the Railroad Retirement Tax Act of 1937. That legislation federal-
ized private railroad pension plans and it remains in force even to-
day. Under the law’s terms, private railroads and their employees
pay a tax based on employees’ incomes. In return, the federal gov-
ernment provides employees a pension often more generous than the
social security system supplies employees in other industries.
This case arises from a peculiar feature of the statute and its histo-
ry. At the time of the Act’s adoption, railroads compensated employ-
ees not just with money but also with food, lodging, railroad tickets,
and the like. Because railroads typically didn’t count these in-kind
benefits when calculating an employee’s pension on retirement, nei-
ther did Congress in its new statutory pension scheme. Nor did Con-
gress seek to tax these in-kind benefits. Instead, it limited its levies
to employee “compensation,” and defined that term to capture only
“any form of money remuneration.”
It’s this limitation that poses today’s question. To encourage em-
ployee performance and to align employee and corporate goals, some
railroads have (like employers in many fields) adopted employee
stock option plans. The government argues that these stock options
qualify as a form of “compensation” subject to taxation under the Act.
In its view, stock options can easily be converted into money and so
qualify as “money remuneration.” The railroads and their employees
reply that stock options aren’t “money remuneration” and remind the
2 WISCONSIN CENTRAL LTD. v. UNITED STATES
Syllabus
Court that when Congress passed the Act it sought to mimic existing
industry pension practices that generally took no notice of in-kind
benefits. Who has the better of it?
Held: Employee stock options are not taxable “compensation” under the
Railroad Retirement Tax Act because they are not “money remunera-
tion.”
When Congress adopted the Act in 1937, “money” was understood
as currency “issued by [a] recognized authority as a medium of ex-
change.” Pretty obviously, stock options do not fall within that defi-
nition. While stock can be bought or sold for money, it isn’t usually
considered a medium of exchange. Few people value goods and ser-
vices in terms of stock, or buy groceries and pay rent with stock.
Adding the word “remuneration” also does not alter the meaning of
the phrase. When the statute speaks of taxing “any form of money
remuneration,” it indicates Congress wanted to tax monetary com-
pensation in any of the many forms an employer might choose. It
does not prove that Congress wanted to tax things, like stock, that
are not money at all.
The broader statutory context points to this conclusion. For exam-
ple, the 1939 Internal Revenue Code, adopted just two years later,
also treated “money” and “stock” as different things. See, e.g., §27(d).
And a companion statute enacted by the same Congress, the Federal
Insurance Contributions Act, taxes “all remuneration,” including
benefits “paid in any medium other than cash.” §3121(a). The Con-
gress that enacted both of these pension schemes knew well the dif-
ference between “money” and “all” forms of remuneration and its
choice to use the narrower term in the context of railroad pensions
alone requires respect, not disregard.
Even the IRS (then the Bureau of Internal Revenue) seems to have
understood all this back in 1938. Shortly after the Railroad Retire-
ment Tax Act’s enactment, the IRS issued a regulation explaining
that the Act taxes “all remuneration in money, or in something which
may be used in lieu of money (scrip and merchandise orders, for ex-
ample).” The regulation said the Act covered things like “[s]alaries,
wages, commissions, fees, [and] bonuses.” But the regulation no-
where suggested that stock was taxable.
In light of these textual and structural clues and others, the Court
thinks it’s clear enough that the term “money” unambiguously ex-
cludes “stock.” Pp. 2–8.
856 F.3d 490, reversed and remanded.
GORSUCH, J., delivered the opinion of the Court, in which ROBERTS,
C. J., and KENNEDY, THOMAS, and ALITO, JJ., joined. BREYER, J., filed a
dissenting opinion, in which GINSBURG, SOTOMAYOR, and KAGAN, JJ.,
joined.
Cite as: 585 U. S. ____ (2018) 1
Opinion of the Court
NOTICE: This opinion is subject to formal revision before publication in the
preliminary print of the United States Reports. Readers are requested to
notify the Reporter of Decisions, Supreme Court of the United States, Wash-
ington, D. C. 20543, of any typographical or other formal errors, in order
that corrections may be made before the preliminary print goes to press.
SUPREME COURT OF THE UNITED STATES
_________________
No. 17–530
_________________
WISCONSIN CENTRAL LTD., ET AL., PETITIONERS v.
UNITED STATES
ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF
APPEALS FOR THE SEVENTH CIRCUIT
[June 21, 2018]
JUSTICE GORSUCH delivered the opinion of the Court.
As the Great Depression took its toll, struggling rail-
road pension funds reached the brink of insolvency. Dur-
ing that time before the modern interstate highway sys-
tem, privately owned railroads employed large numbers of
Americans and provided services vital to the nation’s
commerce. To address the emergency, Congress adopted
the Railroad Retirement Tax Act of 1937. That legislation
federalized private railroad pension plans and it remains
in force today. Under the law’s terms, private railroads
and their employees pay a tax based on employees’ in-
comes. 26 U.S. C. §§3201(a)–(b), 3221(a)–(b). In return,
the federal government provides employees a pension
often more generous than the social security system sup-
plies employees in other industries. See Hisquierdo v.
Hisquierdo, 439 U.S. 572, 573–575 (1979).
Our case arises from a peculiar feature of the statute
and its history. At the time of the Act’s adoption, railroads
compensated employees not just with money but also with
food, lodging, railroad tickets, and the like. Because rail-
roads typically didn’t count these in-kind benefits when
2 WISCONSIN CENTRAL LTD. v. UNITED STATES
Opinion of the Court
calculating an employee’s pension on retirement, neither
did Congress in its new statutory pension scheme. Nor did
Congress seek to tax these in-kind benefits. Instead, it
limited itself to taxing employee “compensation,” and
defined that term to capture only “any form of money
remuneration.” §3231(e)(1).
It’s this limitation that poses today’s question. To en-
courage employee performance and align employee and
corporate goals, some railroads (like employers in many
fields) have adopted employee stock option plans. Typical
of many, the plan before us permits an employee to exer-
cise stock options in various ways—purchasing stock with
her own money and holding it as an investment; purchas-
ing stock but immediately selling a portion to finance the
purchase; or purchasing stock at the option price, selling it
all immediately at the market price, and taking the prof-
its. App. 41–42. The government argues that stock op-
tions like these qualify as a form of taxable “money remu-
neration” under the Act because stock can be easily
converted into money. The railroads reply that stock
options aren’t “money” at all and remind us that when
Congress passed the Act it sought to mimic existing in-
dustry pension practices that generally took no notice of
in-kind benefits. Who has the better of it? Courts
have divided on the answer, so we agreed to take up the
question.
We start with the key statutory term: “money remuner-
ation.” As usual, our job is to interpret the words con-
sistent with their “ordinary meaning . . . at the time Con-
gress enacted the statute.” Perrin v. United States, 444
U.S. 37, 42 (1979). And when Congress adopted the Act
in 1937, “money” was ordinarily understood to mean cur-
rency “issued by [a] recognized authority as a medium of
exchange.” Webster’s New International Dictionary 1583
(2d ed. 1942); see also 6 Oxford English Dictionary 603
(1st ed. 1933) (“In mod[ern] use commonly applied indif-
Cite as: 585 U. S. ____ (2018) 3
Opinion of the Court
ferently to coin and to such promissory documents repre-
senting coin (esp. government and bank notes) as are
currently accepted as a medium of exchange”); Black’s
Law Dictionary 1200 (3d ed. 1933) (in its “popular sense,
‘money’ means any currency, tokens, bank-notes, or other
circulating medium in general use as the representative of
value”); Railway Express Agency, Inc. v. Virginia, 347
U.S. 359, 365 (1954) (“[M]oney . . . is a medium of ex-
change”). Pretty obviously, stock options do not fall within
that definition. While stock can be bought or sold for
money, few of us buy groceries or pay rent or value goods
and services in terms of stock. When was the last time
you heard a friend say his new car cost “2,450 shares of
Microsoft”? Good luck, too, trying to convince the IRS to
treat your stock options as a medium of exchange at tax
time. See Rev. Rul. 76–350, 1976–2 Cum. Bull. 396; see
also, e.g., In re Boyle’s Estate, 2 Cal. App. 2d 234, 236
(1934) (“[T]he word ‘money’ when taken in its ordinary
and grammatical sense does not include corporate stocks”);
Helvering v. Credit Alliance Corp., 316 U.S. 107, 112
(1942) (distinguishing between “money and . . . stock”).
Nor does adding the word “remuneration” alter the
calculus. Of course, “remuneration” can encompass any
kind of reward or compensation, not just money. 8 Oxford
English Dictionary 439. But in the sentence before us, the
adjective “money” modifies the noun “remuneration.” So
“money” limits the kinds of remuneration that will qualify
for taxation; “remuneration” doesn’t expand what counts
as money. When the statute speaks of taxing “any form of
money remuneration,” then, it indicates Congress wanted
to tax monetary compensation in any of the many forms
an employer might choose—coins, paper currency, checks,
wire transfers, and the like. It does not prove Congress
wanted to tax things, like stock, that aren’t money at all.
The broader statutory context points to the same con-
clusion the immediate text suggests. The 1939 Internal
4 WISCONSIN CENTRAL LTD. v. UNITED STATES
Opinion of the Court
Revenue Code, part of the same title as our statute and
adopted just two years later, expressly treated “money”
and “stock” as different things. Consider a few examples.
The Code described “stock of the corporation” as “property
other than money.” §27(d). It explained that a corporate
distribution is taxable when distributed “either (A) in [the
company’s] stock . . . or (B) in money.” §115(f)(2). And it
discussed transfers of “money in addition to . . . stock or
securities.” §372(b). While ultimately ruling for the gov-
ernment, even the Court of Appeals in this case conceded
that the 1939 Code “treat[ed] ‘money’ and ‘stock’ as differ-
ent concepts.” 856 F.3d 490, 492 (CA7 2017).
That’s not all. The same Congress that enacted the
Railroad Retirement Tax Act enacted a companion statute,
the Federal Insurance Contributions Act (FICA), to fund
social security pensions for employees in other industries.
And while the Railroad Retirement Tax Act taxes only
“money remuneration,” FICA taxes “all remuneration”—
including benefits “paid in any medium other than cash.”
§3121(a) (emphasis added). We usually “presume differ-
ences in language like this convey differences in meaning.”
Henson v. Santander Consumer USA Inc., 582 U. S. ___,
___ (2017) (slip op., at 6). And that presumption must
bear particular strength when the same Congress passed
both statutes to handle much the same task. See INS v.
Cardoza-Fonseca, 480 U.S. 421, 432 (1987). The Congress
that enacted both of these pension schemes knew well the
difference between “money” and “all” forms of remunera-
tion. Its choice to use the narrower term in the context of
railroad pensions alone requires respect, not disregard.
Even the IRS (then the Bureau of Internal Revenue)
seems to have understood all this back in 1938. Shortly
after the Railroad Retirement Tax Act’s enactment, the
IRS issued a regulation explaining that the Act taxes “all
remuneration in money, or in something which may be
used in lieu of money.” 26 CFR §410.5 (1938). By way of
Cite as: 585 U. S. ____ (2018) 5
Opinion of the Court
example, the regulation said the Act taxed things like
“[s]alaries, wages, commissions, fees, [and] bonuses.”
§410.6(a). But it nowhere suggested that stock was tax-
able. Nor was the possibility lost on the IRS. The IRS said
the Act did tax money payments related to stock—
“[p]ayments made by an employer into a stock bonus . . .
fund.” §410.6(f). But the agency did not seek to extend
the same treatment to stock itself. So even assuming the
validity of the regulation, it seems only to confirm our
understanding.
To be sure, the regulation also lists “scrip and merchan-
dise orders” as examples of qualifying mediums of ex-
change. §410.5. For argument’s sake, too, we will accept
that the word “scrip” can sometimes embrace stock. But
even if “scrip” is capable of bearing this meaning, at the
time the IRS promulgated the regulation in 1938 that was
not its ordinary meaning. As even the government
acknowledged before the Court of Appeals, “scrip” ordinar-
ily meant “company-issued certificates” that employees
could use in lieu of cash “to purchase merchandise at a
company store.” Brief for United States in Nos. 16–3300
etc. (CA7 2017), p. 37. This understanding fits perfectly as
well with the whole phrase in which the term appears;
both “scrip and merchandise orders” were frequently used
at the time to purchase goods at company stores. See, e.g.,
Webster’s New International Dictionary 2249 (defining
“scrip” as a “certificate . . . issued to circulate in lieu of
government currency” or “by a corporation that pays wag-
es partly in orders on a company store”); Keokee Consol.
Coke Co. v. Taylor, 234 U.S. 224, 226 (1914) (company
gave its employees “scrip . . . as an advance of monthly
wages in payment for labor performed” that could be used
to purchase merchandise at the company store); Gatch,
Local Money in the United States During the Great De-
pression, 26 Essays in Economic & Bus. History 47–48
(2008).
6 WISCONSIN CENTRAL LTD. v. UNITED STATES
Opinion of the Court
What does the government have to say about all this? It
concedes that money remuneration often means remuner-
ation in a commonly used medium of exchange. But, it
submits, the term can carry a much more expansive mean-
ing too. At least sometimes, the government says, “money”
means any “property or possessions of any kind viewed
as convertible into money or having value expressible in
terms of money.” 6 Oxford English Dictionary 603. The
dissent takes the same view. See post, at 3 (opinion of
BREYER, J.). But while the term “money” sometimes might
be used in this much more expansive sense, that isn’t how
the term was ordinarily used at the time of the Act’s adop-
tion (or is even today). Baseball cards, vinyl records, snow
globes, and fidget spinners all have “value expressible in
terms of money.” Even that “priceless” Picasso has a
price. Really, almost anything can be reduced to a “value
expressible in terms of money.” But in ordinary usage
does “money” mean almost everything?
The government and the dissent supply no persuasive
proof that Congress sought to invoke their idiosyncratic
definition. If Congress really thought everything is money,
why did it take such pains to differentiate between
money and stock in the Internal Revenue Code of 1939?
Why did it so carefully distinguish “money remuneration”
in the Act and “all remuneration” in FICA? Why did
it include the word “money” to qualify “remuneration” if
all remuneration counts as money? And wouldn’t the
everything-is-money interpretation encompass railroad
tickets, food, and lodging—exactly the sort of in-kind
benefits we know the Act was written to exclude? These
questions they cannot answer.
To be sure, the government and dissent do seek to offer
a different structural argument of their own. They point
to certain of the Act’s tax exemptions, most notably the
exemption for qualified stock options. See 26 U.S. C.
§3231(e)(12); post, at 6 (BREYER, J., dissenting). Because
Cite as: 585 U. S. ____ (2018) 7
Opinion of the Court
the Act excludes qualified stock options from taxation, the
argument goes, to avoid superfluity it must include other
sorts of stock options like the nonqualified stock options
the railroads issued here. The problem, though, is that
the exemption covers “any remuneration on account of ”
qualified stock options. §3231(e)(12) (emphasis added).
And, as the government concedes, companies sometimes
include money payments when qualified stock options are
exercised (often to compensate for fractional shares due an
employee). Brief for United States 30. As a result, the
exemption does work under anyone’s reading.
The government replies that Congress would not have
bothered to write an exemption that does only this modest
work. To have been worth the candle, Congress must have
assumed that stock options would qualify as money remu-
neration without a specific exemption. But we will not
join this guessing game. It is not our function “to rewrite
a constitutionally valid statutory text under the banner of
speculation about what Congress might have” intended.
Henson, 582 U. S., at ___ (slip op., at 9). Besides, even if
the railroads’ interpretation of the statute threatens to
leave one of many exemptions with little to do, that’s
hardly a reason to abandon it, for the government’s and
dissent’s alternative promises a graver surplusage prob-
lem of its own. As it did in 1939, the Internal Revenue
Code today repeatedly distinguishes between “stock” and
“money.” See, e.g., §306(c)(2) (referring to a situation
where “money had been distributed in lieu of . . . stock”).
All these distinctions the government and dissent would
simply obliterate.
Reaching further afield, the government and dissent
point to a 1938 agency interpretation of another compan-
ion statute, the Railroad Retirement Act of 1937. See post,
at 8–9 (BREYER, J., dissenting). Here, the Railroad Re-
tirement Board suggested that the term “money remuner-
ation” in the Railroad Retirement Act could sometimes
8 WISCONSIN CENTRAL LTD. v. UNITED STATES
Opinion of the Court
include in-kind benefits. Again we may assume the valid-
ity of the regulation because, even taken on its own terms,
it only ends up confirming our interpretation. The Board
indicated that in-kind benefits could count as money
remuneration only if the employer and employee agreed to
this treatment and to the dollar value of the benefit. 20
CFR §222.2 (1938). That same year, the Board made clear
that stock was treated just like any other in-kind benefit
under this rule: “stock cannot be considered as a ‘form of
money remuneration earned by an individual for services
rendered’ ” unless part of an employee’s “agreed compensa-
tion” and awarded “at a definite agreed value.” Railroad
Retirement Bd. Gen. Counsel Memorandum No. L–38–
440, pp. 1–2 (1938). Later, the Board provided fuller
explanation for its longstanding view, stating that these
conditions are necessary because, unlike FICA, the Act
does not cover “ ‘remuneration . . . paid in any medium.’ ”
Railroad Retirement Bd. Gen. Counsel Memorandum
No. L–1986–82, p. 6 (1986). For decades, then, the Board
has taken the view that nonmonetary remuneration is
“not . . . included in compensation under the [Act] unless
the employer and employee first agree to [its] dollar value
. . . and then agree that this dollar value shall be part of
the employee’s compensation package.” Ibid. None of
these preconditions would be needed, of course, if the Act
automatically taxed in-kind benefits as the government
and dissent insist.
Finally, the government seeks Chevron deference for a
more recent IRS interpretation treating “compensation”
under the Act as having “the same meaning as the term
wages in” FICA “except as specifically limited by the
Railroad Retirement Tax Act.” 26 CFR §31.3231(e)–1
(2017). But in light of all the textual and structural clues
before us, we think it’s clear enough that the term “money”
excludes “stock,” leaving no ambiguity for the agency
to fill. See Chevron U. S. A. Inc. v. Natural Resources
Cite as: 585 U. S. ____ (2018) 9
Opinion of the Court
Defense Council, Inc., 467 U.S. 837, 843, n. 9 (1984). Nor
does the regulation help the government even on its own
terms. FICA’s definition of wages—“all remuneration”—is
“specifically limited by the Railroad Retirement Tax Act,”
which applies only to “money remuneration.” So in the
end all the regulation winds up saying is that everyone
should look carefully at the relevant statutory texts. We
agree, and that is what we have done.
The Court of Appeals in this case tried a different tack
still, if over a dissent. The majority all but admitted that
stock isn’t money, but suggested it would make “good
practical sense” for our statute to cover stock as well as
money. 856 F.3d, at 492. Meanwhile, Judge Manion
dissented, countering that it’s a judge’s job only to apply,
not revise or update, the terms of statutes. See id., at 493.
The Eighth Circuit made much the same point when it
addressed the question. See Union Pacific R. Co. v. United
States, 865 F.3d 1045, 1048–1049 (2017). Judge Man-
ion and the Eighth Circuit were right. Written laws are
meant to be understood and lived by. If a fog of uncertainty
surrounded them, if their meaning could shift with the
latest judicial whim, the point of reducing them to writing
would be lost. That is why it’s a “fundamental canon of
statutory construction” that words generally should be
“interpreted as taking their ordinary, contemporary, com-
mon meaning . . . at the time Congress enacted the stat-
ute.” Perrin, 444 U.S., at 42. Congress alone has the
institutional competence, democratic legitimacy, and
(most importantly) constitutional authority to revise
statutes in light of new social problems and preferences.
Until it exercises that power, the people may rely on the
original meaning of the written law.
This hardly leaves us, as the dissent worries, “trapped
in a monetary time warp, forever limited to those forms of
money commonly used in the 1930’s.” Post, at 3 (opinion
of BREYER, J.). While every statute’s meaning is fixed at
10 WISCONSIN CENTRAL LTD. v. UNITED STATES
Opinion of the Court
the time of enactment, new applications may arise in light
of changes in the world. So “money,” as used in this stat-
ute, must always mean a “medium of exchange.” But
what qualifies as a “medium of exchange” may depend on
the facts of the day. Take electronic transfers of
paychecks. Maybe they weren’t common in 1937, but we
do not doubt they would qualify today as “money remu-
neration” under the statute’s original public meaning. The
problem with the government’s and the dissent’s position
today is not that stock and stock options weren’t common
in 1937, but that they were not then—and are not now—
recognized as mediums of exchange.
The judgment of the Seventh Circuit is reversed, and
the case is remanded for further proceedings consistent
with this opinion.
It is so ordered.
Cite as: 585 U. S. ____ (2018) 1
BREYER, J., dissenting
SUPREME COURT OF THE UNITED STATES
_________________
No. 17–530
_________________
WISCONSIN CENTRAL LTD., ET AL., PETITIONERS v.
UNITED STATES
ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF
APPEALS FOR THE SEVENTH CIRCUIT
[June 21, 2018]
JUSTICE BREYER, with whom JUSTICE GINSBURG,
JUSTICE SOTOMAYOR, and JUSTICE KAGAN join, dissenting.
The case before us concerns taxable “compensation”
under the Railroad Retirement Tax Act. The statute
defines the statutory word “compensation” as including
“any form of money remuneration paid to an individual for
services rendered.” 26 U.S. C. §3231(e)(1). Does that
phrase include stock options paid to railroad employees
“for services rendered”? Ibid. In my view, the language
itself is ambiguous but other traditional tools of statutory
interpretation point to the answer, “yes.” Consequently,
the Government’s interpretation of the language—which it
has followed consistently since the inception of the stat-
ute—is lawful. I therefore dissent.
I
A stock option consists of a right to buy a specified
amount of stock at a specific price. If that price is lower
than the current market price of the stock, a holder of the
option can exercise the option, buy the stock at the option
price, and keep the stock, or he can buy the stock, sell it at
the higher market price, and pocket the difference. Com-
panies often compensate their employees in part by paying
them with stock options, hoping that by doing so they will
provide an incentive for their employees to work harder to
2 WISCONSIN CENTRAL LTD. v. UNITED STATES
BREYER, J., dissenting
increase the value of the company.
Employees at petitioners’ companies who receive and
exercise a stock option may keep the stock they buy as
long as they wish. But they also have another choice
called the “cashless exercise” method. App. 42. That
method permits an employee to check a box on a form,
thereby asking the company’s financial agents to buy the
stock (at the option price) and then immediately sell the
stock (at the higher market price) with the proceeds depos-
ited into the employee’s bank account—just like a deposited
paycheck. Ibid. About half (around 49%) of petitioners’
employees used this method (or a variation of it) during
the relevant time period. Separate App. of Plaintiffs-
Appellants in No. 16–3300 (CA7), p. 45. The Solicitor
General tells us that many more employees at other rail-
roads also use this “cashless exercise” method—93% in the
case of CSX, 90% to 95% in the case of BNSF. Brief for
United States 20 (citing CSX Corp. v. United States, 2017
WL 2800181, *2 (MD Fla., May 2, 2017), and BNSF R. Co.
v. United States, 775 F.3d 743, 747 (CA5 2015)).
II
A
Does a stock option received by an employee (along with,
say, a paycheck) count as a “form”—some form, “any
form”—of “money remuneration?” The railroads, as the
majority notes, believe they can find the answer to this
question by engaging in (and winning) a war of 1930’s
dictionaries. I am less sanguine. True, some of those
dictionaries say that “money” primarily refers to currency
or promissory documents used as “a medium of exchange.”
See ante, at 2–3. But even this definition has its ambigui-
ties. A railroad employee cannot use her paycheck as a
“medium of exchange.” She cannot hand it over to a cash-
ier at the grocery store; she must first deposit it. The
same is true of stock, which must be converted into cash
Cite as: 585 U. S. ____ (2018) 3
BREYER, J., dissenting
and deposited in the employee’s account before she can
enjoy its monetary value. Moreover, what we view as
money has changed over time. Cowrie shells once were
such a medium but no longer are, see J. Weatherford, The
History of Money 24 (1997); our currency originally included
gold coins and bullion, but, after 1934, gold could not be
used as a medium of exchange, see Gold Reserve Act of
1934, ch. 6, §2, 48 Stat. 337; perhaps one day employees
will be paid in Bitcoin or some other type of cryptocurrency,
see F. Martin, Money: The Unauthorized Biography—
From Coinage to Cryptocurrencies 275–278 (1st Vintage
Books ed. 2015). Nothing in the statute suggests the
meaning of this provision should be trapped in a monetary
time warp, forever limited to those forms of money com-
monly used in the 1930’s.
Regardless, the formal “medium of exchange” definition
is not the only dictionary definition of “money,” now or
then. The Oxford English Dictionary, for example, included
in its definition “property or possessions of any kind
viewed as convertible into money,” 6 Oxford English Dic-
tionary 603 (1st ed. 1933); Black’s Law Dictionary said
that money was the representative of “everything that can
be transferred in commerce,” Black’s Law Dictionary 1200
(3d ed. 1933); and the New Century Dictionary defined
money as “property considered with reference to its pecu-
niary value,” 1 New Century Dictionary of the English
Language 1083 (1933). Although the majority brushes
these definitions aside as contrary to the term’s “ordinary
usage,” ante, at 6, a broader understanding of money is
perfectly intuitive—particularly in the context of compen-
sation. Indeed, many of the country’s top executives are
compensated in both cash and stock or stock options.
Often, as is the case with the president of petitioners’
parent company, executives’ stock-based compensation far
exceeds their cash salary. Brief for United States 6–7.
But if you were to ask (on, say, a mortgage application)
4 WISCONSIN CENTRAL LTD. v. UNITED STATES
BREYER, J., dissenting
how much money one of those executives made last year, it
would make no sense to leave the stock and stock options
out of the calculation.
So, where does this duel of definitions lead us? Some
seem too narrow; some seem too broad; some seem inde-
terminate. The result is ambiguity. Were it up to me to
choose based only on what I have discussed so far, I would
say that a stock option is a “form of money remuneration.”
Why? Because for many employees it almost immediately
takes the form of an increased bank balance, because it
strongly resembles a paycheck in this respect, and because
the statute refers to “any form” of money remuneration. A
paycheck is not money, but it is a means of remunerating
employees monetarily. The same can be said of stock
options.
B
Fortunately, we have yet more tools in our interpretive
arsenal, namely, all the “traditional tools of statutory
construction.” INS v. Cardoza-Fonseca, 480 U.S. 421, 446
(1987). Let us look to purpose. What could Congress’
purpose have been when it used the word “money”? The
most obvious purpose would be to exclude certain in-kind
benefits that are nonmonetary—either because they are
nontransferrable or otherwise difficult to value. When
Congress enacted the statute, it was common for railroad
workers to receive free transportation for life. Taxation of
Interstate Carriers and Employees: Hearings on H. R.
8652 before the House Committee on Ways and Means,
74th Cong., 1st Sess., 6 (1935). Unlike stock options, it
would have been difficult to value this benefit. And even
very broad definitions of “money” would seem to exclude it.
E.g., 6 Oxford English Dictionary, at 603.
Another interpretive tool, the statute’s history, tends to
confirm this view of the statutory purpose (and further
supports inclusion of stock options for that reason). An
Cite as: 585 U. S. ____ (2018) 5
BREYER, J., dissenting
earlier version of the Act explicitly excluded from taxation
any “free transportation,” along with such in-kind benefits
as “board, rents, housing, [and] lodging” provided that
their value was less than $10 per month (about $185 per
month today). S. 2862, 74th Cong., 1st Sess., §1(e), p. 3
(1935). In other words, they were incidental benefits that
were particularly difficult to value. Congress later
dropped these specific provisions from the bill on the
ground that they were “superfluous.” S. Rep. No. 697,
75th Cong., 1st Sess., 8 (1937).
Excluding stock options from taxation under the statute
would not further this basic purpose and would be incon-
sistent with this aspect of the statute’s history, for stock
options are financial instruments. They can readily be
bought and sold, they are not benefits in kind (i.e., they
have no value to employees other than their financial
value), and—compared to, say, meals or spontaneous train
trips—they are not particularly difficult to value.
Nor is it easy to see what purpose the majority’s inter-
pretation would serve. Congress designed the Act to
provide a financially stable, self-sustaining system of
retirement benefits for railroad employees. See S. Rep.
No. 6, 83d Cong., 1st Sess., pt. 1, pp. 64–65 (1953); see also
2 Staff of the House Committee on Interstate and Foreign
Commerce and the Senate Committee on Labor and Public
Welfare, 92d Cong., 2d Sess., 12–15 (Jt. Comm. Print
1972) (describing financial difficulties facing the private
railroad pension programs that Congress sought to re-
place). Nevertheless, petitioners speculate that Congress
intended to limit the Act’s tax base to employees’ “regular
pay” because that more closely resembled the way private
pensions in the railroad industry calculated a retiree’s
annuity. Brief for Petitioners 8. But the Act taxes not
simply monthly paychecks but also bonuses, commissions,
and contributions to an employee’s retirement account
(like a 401(k)), see §§3231(e)(1), (8)—none of which were
6 WISCONSIN CENTRAL LTD. v. UNITED STATES
BREYER, J., dissenting
customarily considered in railroad pension calculations.
Why distinguish stock options from these other forms of
money remuneration—particularly when almost half the
employees who participated in petitioners’ stock option
plan (and nearly all such employees at other railroads)
have the option’s value paid directly into their bank ac-
counts in cash? See supra, at 2.
The statute’s structure as later amended offers further
support. That is because a later amendment expressly
excluded from taxation certain stock options, namely,
“[q]ualified stock options,” see §3231(e)(12), which tax law
treats more favorably (and which are also excluded from
the Social Security tax base, §3121(a)(22)). What need
would there be to exclude expressly a subset of stock
options if the statute already excluded all stock options
from its coverage? The same is true of certain in-
kind benefits, such as life-insurance premiums. See
§3231(e)(1)(i). Congress has more recently amended the
statute to exclude expressly other hard-to-value fringe
benefits. See §3231(e)(5). Again what need would there
be to do so if all noncash benefits, including stock options,
were already excluded?
C
There are, of course, counterarguments and other con-
siderations, which the majority sets forth in its opinion.
The majority asserts, for example, that Congress must
have intended the Act to be read more narrowly because,
shortly after enacting the statutory language at issue in
this dispute, Congress enacted the Federal Insurance
Contributions Act (FICA), which uses different language
to establish its tax base. The Railroad Retirement Tax Act
defines “compensation” in part as “any form of money
remuneration,” §3231(e)(1) while FICA defines “wages” as
including the “cash value of all remuneration (including
benefits) paid in any medium other than cash,” §3121(a).
Cite as: 585 U. S. ____ (2018) 7
BREYER, J., dissenting
But there is no canon of interpretation forbidding Con-
gress to use different words in different statutes to mean
somewhat the same thing. See Kirtsaeng v. John Wiley &
Sons, Inc., 568 U.S. 519, 540 (2013). And the meaning of
the statutory terms as I read them are not identical, given
FICA’s definition of “wages” would include those types of
noncash benefits that the Railroad Retirement Tax Act
exempts from taxation. See supra, at 4–5.
At most, this conflicting statutory language leaves the
meaning of “money remuneration” unclear. In these cir-
cumstances, I would give weight to the interpretation of
the Government agency that Congress charged with ad-
ministering the statute. “Where a statute leaves a ‘gap’ or
is ‘ambiguous’ we typically interpret it as granting the
agency leeway to enact rules that are reasonable in light
of the text, nature, and purpose of the statute.” Cuozzo
Speed Technologies, LLC v. Lee, 579 U. S. ___, ___ (2016)
(slip op., at 13) (citing United States v. Mead Corp., 533 U.
S. 218, 229 (2001); Chevron U. S. A. Inc. v. Natural Re-
sources Defense Council, Inc., 467 U.S. 837, 843 (1984)).
And even outside that framework, I would find the agen-
cy’s views here particularly persuasive. Skidmore v. Swift
& Co., 323 U.S. 134, 139–140 (1944). The interpretation
was made contemporaneously with the enactment of the
statute itself, Norwegian Nitrogen Products Co. v. United
States, 288 U.S. 294, 315 (1933), and the Government has
not since interpreted the statute in a way that directly
contradicts that contemporaneous interpretation, see, e.g.,
Cardoza-Fonseca, 480 U.S., at 446, n. 30; Watt v. Alaska,
451 U.S. 259, 272–273 (1981). Congress, over a period of
nearly 90 years, has never revised or repealed the agen-
cies’ interpretation, despite modifying other provisions in
the statute, which “ ‘is persuasive evidence that the inter-
pretation is the one intended by Congress.’ ” Commodity
Futures Trading Comm’n v. Schor, 478 U.S. 833, 846
(1986) (quoting NLRB v. Bell Aerospace Co., 416 U.S. 267,
8 WISCONSIN CENTRAL LTD. v. UNITED STATES
BREYER, J., dissenting
274–275 (1974)). Nor did the railroad industry object to
the taxation of stock options based on the Government’s
interpretation until recent years. See, e.g., Union Pacific
R. Co. v. United States, 2016 U. S. Dist. LEXIS 86023, *4–
*5 (D Neb., July 1, 2016) (noting that Union Pacific began
issuing stock options in tax year 1981 and paid railroad
retirement taxes on them for decades, challenging the
Government’s interpretation only in 2014).
What is that interpretation? Shortly after the Act was
passed, the Department of Treasury issued a regulation
defining the term “compensation” in the Act as reaching
both “all remuneration in money, or in something which
may be used in lieu of money (scrip and merchandise
orders, for example).” 26 CFR §410.5 (1938). In the
1930’s, “scrip” could refer to “[c]ertificates of ownership,
either absolute or conditional, of shares in a public com-
pany, corporate profits, etc.” Black’s Law Dictionary, at
1588; C. Alsager, Dictionary of Business Terms 321 (1932)
(“A certificate which represents fractions of shares of
stock”); 3 F. Stroud, Judicial Dictionary 1802 (2d ed. 1903)
(“a [c]ertificate, transferable by delivery, entitling its
holder to become a Shareholder or Bondholder in respect
of the shares or bonds therein mentioned”). The majority,
though clearly fond of 1930’s-era dictionaries, rejects these
definitions because, in its view, they do not reflect the
term’s “ordinary meaning.” Ante, at 5. But the majority
has no basis for this assertion. Contra Eisner v. Macomber,
252 U.S. 189, 227 (1920) (Brandeis, J., dissenting) (re-
ferring to “bonds, scrip or stock” as similar instruments of
corporate finance).
The Treasury Department was not alone in interpreting
the term “money remuneration” more broadly. In 1938
the Railroad Retirement Board’s regulations treated the
term “any form of money remuneration” as including “a
commodity, service, or privilege” that had an “agreed
upon” value. 20 CFR §222.2; see also 20 CFR §211.2
Cite as: 585 U. S. ____ (2018) 9
BREYER, J., dissenting
(2018) (current version). At least one contemporaneous
legal opinion from the Board’s general counsel specifically
concluded that stock received by “employees as a part of
their agreed compensation for services actually rendered
and at a definite agreed value” qualified as a “form of
money remuneration.” Railroad Retirement Bd. Gen.
Counsel Memorandum No. L–1938–440, p. 2 (Apr. 22,
1938). And in a more recent opinion, the Board’s general
counsel stated that nonqualified stock options (the type of
stock option at issue in this dispute) are taxable under the
Act. Railroad Retirement Bd. Gen. Counsel Memorandum
No. L–2005–25, p. 6 (Dec. 2, 2005).
The majority plucks from the Act’s long administrative
history a 1986 Board legal opinion stating that an in-kind
benefit should not be treated as compensation “ ‘unless the
employer and employee first agree to [its] dollar value . . .
and then agree that this dollar value shall be part of the
employee’s compensation package.’ ” Ante, at 8 (quoting
Railroad Retirement Bd. Gen. Counsel Memorandum No.
L–1986–82, p. 6 (June 3, 1986)). But the majority neglects
to share that the deputy general counsel who wrote that
legal opinion was not discussing stock or stock options, but
rather was discussing a “fringe benefit”—specifically free
rail passes employers purchased on behalf of their em-
ployees so they could ride on other carriers’ trains. Ibid.
As I explained above, supra, at 4–5, such non-
transferrable travel benefits were difficult to value and
thus were excluded from the Act’s definition of money
remuneration. (Though the Board’s willingness to treat at
least some fringe benefits as a “form of money remunera-
tion” demonstrates that the Board took a more flexible
view of the term—a view that is contrary to the rigid
dictionary definition of “money” the majority prefers,
which excludes all forms of in-kind benefits. See ante,
at 2–3.)
A stock option, unlike free travel benefits, has a readily
10 WISCONSIN CENTRAL LTD. v. UNITED STATES
BREYER, J., dissenting
discernible value: namely, the difference between the
option price and the market price when the employee
exercises the option. For those employees who use the
“cashless exercise” method, that difference is the amount
that is deposited into their account as cash (minus fees).
See supra, at 2. No one disputes that this is the value of
the option when it is exercised. See Stipulations of Fact in
No. 14–cv–10243, Exh. 13 (ND Ill.), p. CN168 (describing
the taxable benefit from exercising a stock option). And no
one disputes that granting employees stock options is a
form of remuneration. See ante, at 3 (acknowledging that
“ ‘remuneration’ can encompass any kind of reward or
compensation”). The 1986 legal opinion on rail passes the
majority invokes simply has no bearing on the tax treat-
ment of stock options in this case.
More recently, the Treasury has issued a regulation
stating that the Railroad Retirement Tax Act’s term “com-
pensation” (which, the reader will recall, the Act defines
as “any form of money remuneration”) has the same mean-
ing as the term “wages” in FICA “ ‘except as specifically
limited by’ ” the Railroad Retirement Tax Act or by regula-
tion. Brief for Petitioners 47. Petitioners do not dispute
that FICA long has counted stock options as compensa-
tion. See id., at 39–47. Neither the statute’s text nor any
regulation limits us from doing the same for the Railroad
Retirement Tax Act. If anything, the earlier Treasury and
Board regulations and opinions make clear that, in the
Treasury Department’s view, the Act does not “specifically
limit” the application of its terms by excluding stock op-
tions from its coverage.
The Treasury Department’s interpretation is a reason-
able one. For one thing, it creates greater uniformity be-
tween the Railroad Retirement Tax Act’s pension-like
taxing system and the Social Security system governed by
FICA. To seek administrative uniformity is (other things
being equal) a reasonable objective given the similarity of
Cite as: 585 U. S. ____ (2018) 11
BREYER, J., dissenting
purpose and methods the two Acts embody. And subse-
quent amendments to the Railroad Retirement Tax Act
(which have generally mirrored provisions in FICA)
demonstrate that Congress intended these tax regimes to
be treated the same. See Update of Railroad Retirement
Tax Act Regulations, 59 Fed. Reg. 66188 (1994) (observing
that Congress has taken steps to “confor[m] the structure
of the [Railroad Retirement Tax Act] to parallel that of the
FICA”); compare §§3231(e)(1), (9) with §§3121(a)(2)(C),
(a)(19). For another, it helps to avoid the unfairness that
would arise out of treating differently two individuals
(who received roughly the same amount of money in their
bank accounts) simply because one received a paycheck
while the other received proceeds from selling company
stock.
Here, in respect to stock options, the Act’s language has
a degree of ambiguity. But the statute’s purpose, along
with its amendments, argues in favor of including stock
options. The Government has so interpreted the statute
for decades, and Congress has never suggested it held a
contrary view, despite making other statutory changes. In
these circumstances, I believe the Government has the
stronger argument. I would read the statutory phrase as
including stock options. And, with respect, I dissent from
the majority’s contrary view.