Opinion
4:14-cv-00305
2022-08-25
Daniel MONOHON, Plaintiff, v. BNSF RAILWAY COMPANY, Defendant.
Corey Lane Stull, Jeanette Stull, Pro Hac Vice, Atwood, Holsten, Brown, Deaver & Spier, P.C., L.L.O., Lincoln, NE, for Plaintiff. David J. Schmitt, Daniel James Hassing, Lamson Dugan & Murray LLP, Omaha, NE, Andrew D. Weeks, Pro Hac Vice, Sattler and Bogen LLP, Lincoln, NE, Nichole S. Bogen, Pro Hac Vice, Lamson Dugan & Murray LLP, Lincoln, NE, Bryan Neal, Pro Hac Vice, Holland & Knight LLP, Dallas, TX, Michael W. Thrall, Nyemaster Goode PC, Des Moines, IA, for Defendant.
Corey Lane Stull, Jeanette Stull, Pro Hac Vice, Atwood, Holsten, Brown, Deaver & Spier, P.C., L.L.O., Lincoln, NE, for Plaintiff. David J. Schmitt, Daniel James Hassing, Lamson Dugan & Murray LLP, Omaha, NE, Andrew D. Weeks, Pro Hac Vice, Sattler and Bogen LLP, Lincoln, NE, Nichole S. Bogen, Pro Hac Vice, Lamson Dugan & Murray LLP, Lincoln, NE, Bryan Neal, Pro Hac Vice, Holland & Knight LLP, Dallas, TX, Michael W. Thrall, Nyemaster Goode PC, Des Moines, IA, for Defendant. ORDER ROBERT W. PRATT, Judge
On June 14, 2022, this Court granted Plaintiff Daniel Monohon's Motion for Reinstatement and Restoration, Gap Pay, Interest, and Expungement (ECF No. 215). ECF No. 234. Defendant BNSF Railway Co. was ordered to reinstate Plaintiff to his former position as a track inspector, and to restore Plaintiff's seniority and vacation benefits upon his reinstatement. Id. Further, the Court granted Plaintiff's request for "gap pay" from the date of the jury's verdict on May 20, 2016, through Plaintiff's reinstatement. Id. The Court reserved entry of final judgment on two issues specific to damages: the calculation of Plaintiff's gap-pay award and prejudgment interest based on the 26 U.S.C. § 6621 rate. Id. The parties were ordered to provide stipulated calculations to the Court on the amounts owed to Plaintiff, subject to the Court's final approval. Id. Therefore, the only issue currently before the Court is the calculation of Plaintiff's net wage and benefit loss for his gap-pay award, as well as a calculation of prejudgment interest on the award based on the § 6621 rate.
Plaintiff has filed several expert reports and declarations regarding the proper calculation of Plaintiff's gap pay and benefits, as well as prejudgment interest owed. See ECF Nos. 216-2, 224, 239, 249-1. Counsel for both parties have filed supplemental briefing stating their respective positions. ECF Nos. 249-50, 252, 257-60. The matter is fully submitted.
I. FACTUAL AND PROCEDURAL BACKGROUND
Plaintiff's employment was wrongfully terminated in September 2012, in violation of the Federal Railroad Safety Act (FRSA), 49 U.S.C. § 20109(b)(1)(A), following his good-faith report of a hazardous safety condition at work. The case proceeded to a four-day jury trial in May 2016 before Judge John Jarvey, retired United States District Judge for the Southern District of Iowa. See ECF Nos. 133, 134, 140, 142. The jury found in favor of Plaintiff and awarded him damages for past lost wages, past lost benefits, and emotional distress. ECF No. 145. Judge Jarvey entered an Order denying Plaintiff's request for reinstatement and instead awarded him three years of front pay, plus attorneys' fees and costs. ECF No. 167 at 4-5, 6; ECF No. 166. Defendant then filed a renewed motion for judgment as a matter of law and an alternative motion for a new trial. ECF No. 174. Judge Jarvey granted Defendant's renewed motion for judgment as a matter of law in 2018. ECF No. 193 at 3-4. The Court set aside the judgment in favor of Plaintiff and ordered judgment to be entered in favor of Defendant. Id. at 5; see ECF Nos. 168, 194. Plaintiff appealed. See ECF No. 196.
The Eighth Circuit Court of Appeals concluded the district court had erred in granting Defendant's renewed motion for judgment as a matter of law and abused its discretion in conditionally granting Defendant's motion for new trial. Monohon v. BNSF Ry. Co., 17 F.4th 773, 784 (8th Cir. 2021). Having concluded the jury's verdict should stand, the Eighth Circuit turned to Plaintiff's argument that the district court had erred in awarding front pay instead of reinstatement. Id. at 784-85. The Eighth Circuit distinguished Plaintiff's case from the other cases cited by Defendant, stating that this was not a case "in which the Plaintiff requested or did not challenge the award of front pay." Id. at 785. In fact, Plaintiff requested reinstatement, and "the FRSA unambiguously requires reinstatement." Id. (citing Halliburton, Inc. v. Admin. Rev. Bd., 771 F.3d 254, 264 (5th Cir. 2014)). The Eighth Circuit made it clear that reinstatement under FRSA is an equitable remedy that employees unlawfully discharged from their employment "shall be entitled to" if "necessary to make the employee whole." Id. at 784 (emphasis added); 49 U.S.C. §§ 20109(e)(1)-(2). The Eighth Circuit vacated the judgment entered in favor of Defendant, reversed the order granting Defendant's renewed motion for judgment as a matter of law, and remanded to the district court with an instruction to reconsider Plaintiff's request for reinstatement, and order "reinstatement of the jury's verdict and for the entry of such further relief as is consistent with the views set forth in this opinion." Id. at 785. Upon remand, the case was transferred to the undersigned.
On June 14, 2022, this Court granted Plaintiff's Motion for Reinstatement and Restoration, Gap Pay, Interest, and Expungement (ECF No. 215), in light of the Eighth Circuit's remand order. ECF No. 234. The Court ordered Defendant to reinstate Plaintiff to his former position within thirty days, restore Plaintiff's seniority and vacation benefits, clear his employment record of the insubordination charge from September 2012, and pay Plaintiff gap pay from the date of the jury's verdict through the date of reinstatement. ECF No. 234. The Court must now calculate Plaintiff's gap-pay award, and prejudgment interest on his award, based on the date of Plaintiff's reinstatement.
As stated in the Court's Reinstatement Order, ECF No. 234 at 13, "gap pay" bridges the gap between the jury's back pay award and Plaintiff's reinstatement date by awarding Plaintiff lost wages and benefits.
Plaintiff has provided the Court with several economic expert reports and declarations by Dr. Stan Smith of Smith Economics Group, Ltd., showing Dr. Smith's calculation of Plaintiff's estimated gap pay and prejudgment interest. ECF Nos. 216-2, 224, 239, 249-1. Two of Dr. Smith's reports (ECF Nos. 216-2 and 224) were filed prior to the May 2022 deadline for the parties to make evidentiary submissions on Plaintiff's Motion, and prior to the Court's Reinstatement Order. Dr. Smith's reports originally calculated the value of Plaintiff's net gap wage and benefit loss from the date of the jury's verdict on May 20, 2016, through April 1, 2022, and any prejudgment interest on that award. See ECF Nos. 216-2, 224. However, the Court in its Reinstatement Order found Dr. Smith's loss calculations incorrect because Dr. Smith included railroad-employer tax contributions, which the Court declined to award separately because the railroad is legally obligated to collect Tier I and Tier II taxes and remit payment directly to the Internal Revenue Service (IRS) under the Railroad Retirement Tax Act (RRTA), 26 U.S.C. § 3201 et seq. ECF No. 234 at 18-20. In addition to excluding Tier I and Tier II taxes, the Court ordered the parties to provide updated, stipulated calculations on Plaintiff's net wage and benefit loss, plus prejudgment interest, through the date of Plaintiff's reinstatement. Id. at 23. If the parties could not agree, then the Court would appoint an independent economic expert. Id.
Plaintiff has been partially reinstated and medically cleared to work effective July 1, 2022. ECF No. 250 at 1; ECF No. 257 ¶¶ 1, 17. However, Plaintiff is not actually reinstated to "active service" as a track inspector because he needs to successfully complete requalification testing. See ECF No. 259.
Next, the Court held a telephonic status conference with the parties on July 7, 2022, to discuss any progress made towards a stipulated calculation of Plaintiff's gap pay and prejudgment-interest award. See ECF No. 241. It became apparent to the Court that while some progress had been made regarding reinstatement of Plaintiff's employment, the parties still had substantial disputes over Plaintiff's net gap wage and benefits calculation. Defendant objected to Dr. Smith's supplemental expert report, filed after the Court's Reinstatement Order. ECF No. 236. As ordered by the Court, Dr. Smith had updated Plaintiff's net gap wage and benefit loss by excluding the amounts initially included to cover Defendant's share of Tier I and Tier II taxes. See ECF No. 239. But Dr. Smith also added $30,415 to Plaintiff's gap-pay calculation, representing 6.2 percent of Plaintiff's actual wages from 2016 to July 1, 2022. Id. at 4, 7. This 6.2 percent figure was included by Dr. Smith to compensate Plaintiff for the employer-equivalent share of Social Security FICA taxes Plaintiff was obligated to pay on his earnings from 2016 through July 1, 2022, while he was self-employed as a truck driver. Id. at 4. Dr. Smith reasoned that Plaintiff would not be made whole without the additional 6.2 percent amount after the Tier I and Tier II tax costs were backed out from his award calculation. Id. Dr. Smith also added $87,882 to compensate Plaintiff for the additional tax liability caused by receiving a large lump-sum payment on his gap-pay award in 2022, instead of receiving the amount at the lower tax rate on his annual earnings each year from 2016 through 2022. Id. at 5.
The parties now present four issues to the Court for calculating the appropriate amount of Plaintiff's gap pay and prejudgment-interest award. First, whether Plaintiff is entitled to be reimbursed 6.2 percent of his mitigation earnings to compensate him for Social Security FICA taxes that he paid while self-employed from 2016 through the date of reinstatement. Second, whether Plaintiff is entitled to an additional amount to offset any negative tax consequences on his gap-pay award because he will receive a lump sum payment in 2022 at a higher marginal tax rate, rather than an award spread out over several years. Third, whether the Court must order Defendant to report Plaintiff's months of creditable service to the U.S. Railroad Retirement Board (RRB) based on the total amount of his unmitigated railroad compensation. Further, whether Defendant's failure to do so violates this Court's Order to restore Plaintiff's seniority upon his reinstatement. Fourth, whether Defendant incorrectly deducted payroll taxes from the back-benefits and post-judgment interest check issued to Plaintiff following the jury's verdict.
Defendant objects to the Court's consideration of Plaintiff's additional requests for relief as stated in Dr. Smith's recent supplemental expert report (ECF No. 239) and supplemental declaration (ECF No. 249-1). Defendant argues Plaintiff raises new claims for relief outside the scope of the Eighth Circuit's remand order and well past this Court's discovery and evidentiary deadlines. While Defendant stipulates to a calculation of gap pay and prejudgment interest based on Dr. Smith's original reports—minus the amount backed out for Tier I and Tier II taxes and updated through the date of reinstatement—Defendant disagrees with the additional amounts requested by Plaintiff. See ECF Nos. 250 at 3, 259 at 6-7. Finally, Defendant argues Plaintiff's fourth concern is moot because Defendant has agreed to pay Plaintiff the amounts it withheld for payroll taxes on the non-wage portions of the jury award. Defendant is in the process of reissuing the check payment for the corrected amount. The Court agrees, the fourth issue regarding payroll tax withholding is moot.
The three remaining issues regarding Plaintiff's gap pay and prejudgment interest calculations—including reimbursement for Social Security FICA taxes, awarding an amount to offset Plaintiff's adverse tax consequences, and reporting Plaintiff's months of creditable service to the RRB—are addressed below in light of the make-whole remedy mandated by the FRSA. § 20109(e)(1). As is the case with similar anti-discrimination statutes, "courts [have] wide discretion exercising their equitable powers to fashion the most complete relief possible." Albemarle Paper Co. v. Moody, 422 U.S. 405, 421, 95 S.Ct. 2362, 45 L.Ed.2d 280 (1975).
II. ANALYSIS
A. Tier I/Social Security Taxes
First, Plaintiff presents a novel argument for reimbursement of the Social Security taxes he paid on his mitigation wages. Because Plaintiff was self-employed as a truck driver, he was obligated to pay the IRS both the employee and employer-equivalent portions of Social Security tax on his earnings. Based on Dr. Smith's supplemental report and declaration, Plaintiff argues that to be made whole after backing out Defendant's RRTA Tier I and Tier II tax contributions from his gap-pay award, it is necessary to reimburse him for the employer-equivalent share of the Social Security tax he paid while self-employed. Plaintiff claims that prior to the Court's Reinstatement Order, Dr. Smith had originally factored in the additional amount for his Social Security self-employment taxes when calculating Defendant's Tier I and Tier II tax contributions. So, according to Plaintiff, this is not a new request for relief but rather an equitable remedy for backing out the Tier I and Tier II amounts. Plaintiff also argues that but for the Defendant's wrongful termination, Defendant would have paid the entire unmitigated employer's share of his RRTA Tier I and Tier II taxes. And failure to compensate Plaintiff for the taxes he paid while self-employed acts as a penalty against him. Plaintiff is unable to locate authority on this issue. Finally, Plaintiff requests a detailed order from the Court regarding Defendant's obligations regarding Tier I and Tier II taxes.
Defendant challenges Plaintiff's argument and believes this is an example of Plaintiff's effort to "un-do the Court's previous decision about Tier I/Tier II RRB benefits." ECF No. 252 at 3. Defendant denies that Dr. Smith originally considered Plaintiff's self-employment Social Security taxes in his calculation of RRTA Tier I and Tier II contributions and disagrees with Dr. Smith's rationale for the additional 6.2 percent figure. Adding in the amount at this point, according to Defendant, is a new request for relief. Defendant also claims that no statute or regulation exists for the proposition that Defendant's RRTA Tier I or Tier II tax contributions will in any way penalize Plaintiff or be offset by the employer-equivalent share of Social Security tax Plaintiff was obligated to pay while he was self-employed.
Defendant also contends that Plaintiff received a benefit by way of entitlement to a tax deduction as a self-employed person that should be offset from Dr. Smith's calculations. See ECF No. 250 at 6 n.3. This issue is not dispositive in this case, yet the Court assumes Plaintiff consulted with his tax preparer in filing his income tax returns and the deduction was thus considered by Dr. Smith.
The Court will first provide background information on the difference between railroad-retirement benefits and Social Security benefits, as well as the way these benefits are treated and taxed. The Court will then address whether the make-whole remedy under section 20109(e)(1) requires Plaintiff's requested relief.
A self-employed person generally pays a Social Security employment tax of 12.4 percent of their wages to the IRS, equivalent to the taxes owed under the Federal Insurance Contributions Act (FICA), I.R.C. § 3101 et seq. See IRS, Self-Employment Tax (Social Security and Medicare Taxes), https://www.irs.gov/businesses/small-businesses-self-employed/self-employment-tax-social-security-and-medicare-taxes (last updated Apr. 29, 2022). Whereas a non-self-employed person typically pays 6.2 percent of their wages for Social Security tax and their employer contributes the other 6.2 percent. See §§ 3101, 3111. However, railroad employees and their employers do not pay into Social Security because they pay into a different, yet equivalent, benefits system under RRTA sections 3201 and 3221, and the Railroad Retirement Act (RRA), 45 U.S.C. § 231 et seq. This benefits system began in 1937, when "Congress created a self-sustaining retirement benefits system for railroad workers." BNSF Ry. Co. v. Loos, — U.S. —, 139 S. Ct. 893, 897, 203 L.Ed.2d 160 (2019). Railroad employees are provided with "generous pensions as well as benefits 'correspon[ding] . . . to those an employee would expect to receive were he covered by the Social Security Act.' " Id. (citing Hisquierdo v. Hisquierdo, 439 U.S. 572, 575, 99 S.Ct. 802, 59 L.Ed.2d 1 (1979)). The system is funded "by imposing a payroll tax on both railroads and their employees." Id. The IRS collects the taxes on compensation directly from the railroad employer. Id. at 897-98. Based on the tax contributions made, the RRA "entitles railroad workers to various benefits and prescribes eligibility requirements," and those benefits are then administered by the RRB. Id.; see § 231f(a).
There are two separate divisions of benefits for railroad employees, known as Tier I and Tier II benefits, and they are taxed separately. 26 U.S.C. §§ 3201, 3221. "Tier I benefits take the place of Social Security, from which railway workers are exempt, and Tier II benefits are similar to those that workers would receive from a private multi-employer pension fund." Hance v. Norfolk S. Ry. Co., 571 F.3d 511, 522 (6th Cir. 2009). Railroad "[e]mployers are liable for the payment of such tax and 'shall not be liable to any person for the amount of any such payment.' " Heckman v. Burlington N. Santa Fe Ry. Co., 286 Neb. 453, 837 N.W.2d 532, 540 (2013); 26 U.S.C. § 3202(b). Further, "an award compensating for lost wages is subject to taxation under the RRTA." Loos, 139 S. Ct. at 897.
Here, Plaintiff argues that to be made whole, Defendant must compensate Plaintiff for the FICA-equivalent Social Security taxes he paid on his earnings while he was self-employed. This is a complex case. The parties here understandably struggle to locate precedent directly on-point and they mainly rely on Dr. Smith's expert reports. There is some ambiguity regarding whether Plaintiff's self-employer-equivalent taxes were considered in Dr. Smith's original calculation for RRTA Tier I and Tier II taxes owed. Compare ECF No. 224 (calculating the employee benefits owed to Plaintiff and stating, "employer contributions are 6.2 percent for Tier I and 13.1 percent for Tier II."), with ECF No. 239 at 3-4 ("Since [Plaintiff] is self-employed, he paid both the employee and employer portion of the self-employed equivalent to Social Security . . . . [T]hus, I add an additional 6.2 percent of [Plaintiff]'s actual wages."). However, ambiguity about whether the 6.2 percent amount was considered in Dr. Smith's original report is resolved in Plaintiff's favor, and in the light most favorable to the jury's verdict. See Hance, 571 F.3d at 520 ("Any ambiguity in what claimant would have received but for discrimination should be resolved against the discriminating employer."). Additionally, the Court does not agree with Defendant that this is a "new" request for relief beyond the Court's Reinstatement Order because it is useful for determining the proper calculation of Plaintiff's pending gap-pay award and is likewise within the Court's discretion. See also Fed. R. Civ. P. 54 ("Every other final judgment should grant the relief to which each party is entitled, even if the party has not demanded that relief in its pleadings."). Further, the scope of Plaintiff's reinstatement was a question that remained open on remand. Charles A. Wright & Arthur R. Miller, Fed. Prac. & Proc. § 4478.3 (3d ed. 1998) ("An express direction to reconsider on remand has the same effect" as the court of appeals "expressly stating that a particular question is left open" for the district court's determination.). Any delay in bringing up the amount at issue is excusable and nonprejudicial because the Court ordered Tier I and Tier II tax contributions backed out of Plaintiff's calculations in its June Reinstatement Order. The question is whether Plaintiff is entitled to the additional reimbursement amount. The Court in addressing these issues must always keep in mind that the purpose of FRSA as well as the Eighth Circuit's opinion is to make Plaintiff whole.
To be sure, if Plaintiff had been working for an employer as opposed to being self-employed during the time he was terminated from the railroad, then he would not have paid the self-employment tax that every employer or self-employed person must pay. However, a railroad employer pays taxes on a benefits system under the RRTA, not Social Security or FICA. Defendant is legally obligated under the RRTA to pay its share of Tier I and Tier II taxes owed to the IRS on the unmitigated portion of Plaintiff's railroad compensation. See § 3202(b). Because Plaintiff mitigated his wages, the Court concludes Defendant need only pay its share of RRTA taxes on the portion of Plaintiff's compensation that was left unmitigated, or his net railroad compensation lost. If the Court were to order Defendant to pay an additional 6.2 percent of Plaintiff's earnings to cover the taxes Plaintiff paid into Social Security while self-employed, then Plaintiff would be made better off as a result of Defendant's unlawful act. See, e.g., Hance, 571 F.3d at 523 (denying award of substitute retirement benefits because it would go "beyond what is needed to make the plaintiff whole.").
Plaintiff is not being penalized. Plaintiff should be entitled to receive benefits at retirement-age or disability status based on the amounts he paid into Social Security, and he should also be entitled to benefit from the tax contributions paid by Defendant on his railroad compensation under the RRTA. Plaintiff's Social Security earnings record will be credited with both the withheld 6.2 percent of his wages as well as the 6.2 percent of his self-employment taxes. In summary, the withheld FICA-equivalent taxes on Plaintiff's self-employment earnings will inure to Plaintiff's benefit. Additionally, Plaintiff's nonrailroad employment, or Social Security-covered earnings, are separate from his railroad compensation and therefore his RRB-equivalent benefits should not be offset by any amount he receives from Social Security. See RRB, Dual Benefit Payments (Apr. 2021), available at https://rrb.gov/sites/default/files/2021-04/QA2104.pdf; see also Loos, 139 S. Ct. at 904 ("[I]f RRTA taxes were based on 'income' or 'gross income' rather than 'compensation,' the RRTA tax base would sweep in nonrailroad income, including, for example, dividends, interest accruals, even lottery winnings . . . . [And] would thus saddle railroad workers with more RRTA taxes.").
The Court recognizes its wide discretion to fashion "a just result" in this case. Albemarle Paper Co., 422 U.S. at 424, 95 S.Ct. 2362. But the Court declines to award Plaintiff the additional 6.2 percent requested. The Court further declines Plaintiff's request for a detailed order regarding Defendant's Tier I and Tier II tax obligations and believes this has been sufficiently addressed by the Court up to this point in accordance with Congress's mandate in RRTA section 3202(b) that "[e]very employer required . . . to deduct the [RRTA] tax shall be liable for the payment of such tax and shall not be liable to any person for the amount of any such payment."
B. Tax Gross-Up
Second, Plaintiff requests an additional $87,882 to cover the adverse tax consequences of receiving his lump sum gap-pay award in 2022. Plaintiff's request is also known as a "tax gross-up." E.g., Gregg D. Polsky & Stephen F. Befort, Employment Discrimination Remedies & Tax Gross Ups, 90 Iowa L. Rev. 67, 69-70 (2004). Defendant objects to Plaintiff's request. Defendant argues the tax gross-up suggested in Dr. Smith's supplemental June report and July declaration is prejudicial toward Defendant because the Court's deadline for Plaintiff to submit additional evidence regarding the amount of gap pay owed to him was May 12, 2022. See ECF No. 222. Defendant claims it cannot determine whether Dr. Smith correctly calculated the tax gross-up, and because Dr. Smith's reports came after the Court's evidentiary deadline, it cannot now conduct the discovery and briefing it needs to contradict Dr. Smith. In any event, Defendant contends that prejudgment interest sufficiently compensates Plaintiff for the adverse tax consequences of receiving a lump sum gap-pay award in 2022.
As explained above, awards compensating lost earnings are taxable in the year paid under the RRTA. Loos, 139 S. Ct. at 897. This is similar to the taxation of back-pay awards in other federal anti-discrimination statutes—and unfortunately, unlike the tax exclusion provided to successful tort plaintiffs. Clemens v. Centurylink Inc., 874 F.3d 1113, 1116 (9th Cir. 2017); United States v. Burke, 504 U.S. 229, 241-42, 112 S.Ct. 1867, 119 L.Ed.2d 34 (1992); see also 26 U.S.C. § 104(a)(2) (excluding only lump-sum awards based on "personal physical injuries or physical sickness" from taxable gross income). What is more, "a lump-sum award will sometimes push a plaintiff into a higher tax bracket than he would have occupied had he received his pay incrementally over several years." Clemens, 874 F.3d at 1116. This is because "a portion of the recovery may be subject to marginal [tax] rates higher than the plaintiff's typical marginal rate." Polsky & Befort, supra, at 69. This effect is known as "bunching"—or taxing several years of income in a single year—and it "is a byproduct of two of the most durable features of the federal income tax: the annual accounting system and progressive tax rates." Id. at 76-77.
Congress attempted to resolve this adverse-tax problem decades ago with a method called "income-averaging," but that method was repealed by the Tax Reform Act of 1986, when the IRS tax-rate structure was "flattened" by lowering the top marginal tax bracket. Id. at 77; Pub. L. No. 99-514, §§ 104, 141, 100 Stat. 2085, 2096, 2117 (1986). Congress believed this tax rate reduction would be administratively more convenient than income averaging and would also reduce the potential adverse tax consequences of "bunching." Polsky & Befort, supra, at 77, 109. Unfortunately, that was not the case long-term, and Congress has since failed to make a substantive policy choice to address excessive tax on prevailing employment discrimination plaintiffs or fix the bunching problem. Id. at 109. "Accordingly, employees may be subject to higher taxes if they receive a lump sum back pay award in a given year . . . . [M]eaning the employee would have a greater tax burden than if [they] were to have received that same pay in the normal course" but for the wrongful act of the employer. Eshelman v. Agere Sys., Inc., 554 F.3d 426, 441 (3d Cir. 2009). "This discrepancy in tax consequences begs the question of whether the award actually accomplishes the intent of making the successful plaintiff whole." Corinne Spencer, Authorizing Gross-Up Compensation: Making Recovering Plaintiffs Whole by Accounting for the Additional Tax Consequences that Accompany Lump-Sum Back Pay Awards, 56 Wake Forest L. Rev. 417, 421 (2021).
A "tax gross-up" attempts to neutralize these adverse tax consequences. Polsky & Befort, supra, at 69. Tax gross-ups appear to work better than income averaging at making employees whole. Income-averaging only allowed successful plaintiffs the ability "to spread their tax liability across at least a few prior years," even if they had more than a few years of lost wages, and also resulted in a "loss of revenue for the [IRS]." Spencer, supra, at 423-24. Income averaging "put the monetary burden on the IRS [and the plaintiff] instead of the liable defendant." Id. at 424. Instead, tax gross-ups place the burden on the defendant and are particularly appropriate in circumstances involving unusually long litigation in which a large lump sum is awarded. See Sears v. Atchison, Topeka & Santa Fe Ry., Co., 749 F.2d 1451, 1456 (10th Cir. 1984). Tax gross-ups are also appropriate in cases involving federal anti-discrimination statutes because "courts [have] broad equitable powers to remedy violations and make victims of discrimination whole." Polksy & Befort, supra, at 99. A similar make-whole objective is present in the FRSA anti-retaliation provision. § 20109(e)(1).
It is also important to distinguish a tax gross-up from an award of prejudgment interest. A tax gross-up resembles an award of prejudgment interest because both forms of relief intend to mitigate the impact of a plaintiff's loss over several years of protracted litigation. Spencer, supra, at 422-23; Arneson v. Callahan, 128 F.3d 1243, 1247 (8th Cir. 1997) ("If the tax enhancement remedy is available under Title VII, we find it analogous to the prejudgment interest remedy."); see also Eshelman, 554 F.3d at 442 ("Support for our holding may be drawn from the now-universal acceptance of another form of equitable relief—prejudgment interest on back pay awards."). Like back pay, "prejudgment interest helps to make victims of discrimination whole." Id. "Prejudgment interest 'serves to compensate a plaintiff for the loss of the use of money that the plaintiff otherwise would have earned had he not been unjustly discharged.' " Id. (citation omitted). Prejudgment interest also compensates plaintiffs for "the respective inflation experienced due to a delayed award." Spencer, supra, at 423.
A tax gross-up, however, does something different than prejudgment interest: it "alleviate[s] the additional tax burden from the bunching of multiple years that results from the large [lump-sum] award rather than the lack thereof." Id. "This type of an award, as with prejudgment interest, represents a recognition that the harm to a prevailing employee's pecuniary interest may be broader in scope than just a loss of back pay. Accordingly, either or both types of equitable relief may be necessary to achieve complete restoration of the prevailing employee's economic status quo and to assure 'the most complete relief possible.' " Eshelman, 554 F.3d at 442 (emphasis added) (citing Local 28 of Sheet Metal Workers' Int'l Ass'n v. EEOC, 478 U.S. 421, 465, 106 S.Ct. 3019, 92 L.Ed.2d 344 (1986)). In other words, just because a victim of unlawful employment practices receives prejudgment interest does not mean a tax gross-up is not also necessary to make the employee whole.
Not all courts agree on the authority for tax gross-ups, despite the widespread acceptance of prejudgment interest. See Dashnaw v. Pena, 12 F.3d 1112, 1116 (D.C. Cir. 1994). The District of Columbia Circuit is a rogue circuit in terms of finding a lack of authority for tax gross-ups in the employment-discrimination context. Dashnaw is an outlier because the reason for denying the plaintiff's tax gross-up request was "lack of support in existing case-law" to grant such relief. Id. Yet, Dashnaw "ignored the Tenth Circuit's decision in Sears and the Supreme Court's reasoning in cases like Albemarle, Loeffler, and Franks [v. Bowman Transp. Co., Inc., 424 U.S. 747, 96 S.Ct. 1251, 47 L.Ed.2d 444 (1976)], as well as Title VII's equitable underpinnings," and failed to provide any substantive analysis in its ruling. Clemens, 874 F.3d at 1117. The majority of circuit courts that have ruled on the issue have found authority for tax gross-ups rests within the district court's broad discretion to make victims of unlawful employment practices whole. Sears, 749 F.2d at 1456; Eshelman, 554 F.3d at 442; EEOC v. N. Star Hosp., Inc., 777 F.3d 898 (7th Cir. 2015); Clemens, 874 F.3d at 1117 ("We join the thoughtful analysis of the Third, Seventh, and Tenth Circuits, and reject the matchbook musings of the D.C. Circuit. In so doing, we also agree with those courts that the decision to award a gross up—and the appropriate amount of any such gross up—is left to the sound discretion of the district court."); see also Sonoma Apartment Assocs. v. United States, 127 Fed. Cl. 721, 732 (2016) ("[I]f [a plaintiff's] evidence reflects that the tax differential can be ascertained with reasonable certainty, then the court should consider allowing recovery of a tax neutralization payment.").
The Eighth Circuit in Arneson v. Callahan, came close to authorizing a "tax enhancement remedy" when available "as an element of making persons whole for discrimination injuries." 128 F.3d at 1247 (citing Loeffler v. Frank, 486 U.S. 549, 558, 108 S.Ct. 1965, 100 L.Ed.2d 549 (1988)); see Arneson v. Sullivan, 958 F. Supp. 443, 446-47 (E.D. Mo. 1996) (enhancing the plaintiff's "back pay award to compensate him for the increased income tax liability resulting from the receipt of the award in two lump sum payments."). However, the plaintiff in Arneson was seeking tax-enhancement damages against the Social Security Administration, and the Eighth Circuit reversed the district court's tax enhancement award because Congress had not yet waived sovereign immunity for such relief, nor "authorized the tax enhancement remedy against the federal government." Id. Therefore, the Eighth Circuit has not directly ruled on whether there is authority for a tax gross-up award when a private employer, rather than the federal government, is liable. But see Hukkanen v. Int'l Union of Operating Eng'rs, Hoisting & Portable Loc. No. 101, 3 F.3d 281 (8th Cir. 1993) (affirming district court's denial of a tax enhancement or gross-up against non-governmental employer due to lack of sufficient evidence for the amount requested, but not challenging the court's authority to order a tax gross-up).
This Court concludes authority for tax gross-ups exists in light of the make-whole remedy under the FRSA and similar anti-discrimination statutes, as well as the majority of circuit courts holding the same. Indeed, " '[i]t is the historic purpose of equity to secure complete justice,' and that '[i]n the context of a claim brought under a federal statute intended to combat discrimination, the phrase "complete justice" has a clear meaning: "the [district] court has not merely the power but the duty to render a decree which will so far as possible eliminate the discriminatory effects of the past as well as bar like discrimination in the future." ' " Clemens, 874 F.3d at 1116 (citing Bayer v. Neiman Marcus Grp., Inc., 861 F.3d 853, 873 (9th Cir. 2017)) (citations omitted). Considering the special circumstances here regarding the protracted nature of litigation and the adverse tax consequences Plaintiff will face by receiving a lump sum gap-pay award in 2022, the Court holds Plaintiff is entitled to a tax gross-up. The Court must now determine whether such an award is prejudicial to Defendant and whether Plaintiff has met his evidentiary burden in support of the amount requested. See Eshelman, 554 F.3d at 443.
Defendant argues Dr. Smith's reports are prejudicial because the reports were submitted after the Court's May 2022 evidentiary deadline and after the Court's June 2022 Reinstatement Order. Defendant further contends it cannot determine whether Dr. Smith's calculations are correct without deposing Dr. Smith and engaging its own expert. In short, Defendant argues the Court should refuse to order a tax gross-up because it would result in further discovery and briefing in an already protracted case. King v. CVS Health Corp., 198 F. Supp. 3d 1277, 1291 (N.D. Ala. 2016) ("The court, in its discretion, refuses to award this novel, though appealing, item of damages without evidentiary support of it, and refuses to delay entry of judgment any longer to allow the obtaining of such evidentiary support.").
Challenging damages sought in a wrongful termination case requires proof "by a preponderance of the evidence that [the plaintiff] was not entitled to [damages]." Hance, 571 F.3d at 520 (citation omitted). For a district court to discredit what appears to be reliable and credible evidence calculating a plaintiff's damages there should be a submission of contradictory evidence. Id. at 521. Additionally, a tax gross-up may not be appropriate in every case, such as when it is difficult to determine the amount, "or the negligibility of the amount at issue." Clemens, 874 F.3d at 1117. More so, a prevailing plaintiff in an unlawful retaliation or discrimination case is not presumptively entitled to a gross-up award. Eshelman, 554 F.3d at 443. "Employees will continue to bear the burden to show the extent of the injury they have suffered. The nature and amount of relief needed to make an aggrieved party whole necessarily varies from case to case." Id.; Clemens, 874 F.3d at 1117. Therefore, district courts must be able to "show their work" on how they arrive at the tax gross-up amount. N. Star Hosp., Inc., 777 F.3d at 904. For instance, in Hukkanen, the Eighth Circuit affirmed the district court's denial of a tax gross-up because the plaintiff "failed to present evidence of the enhancement's amount or a convenient way for the court to calculate the amount at the time the court announced its judgment." 3 F.3d at 287.
Unlike Hukkanen, Plaintiff has submitted several reports and declarations by a credible economic expert, Dr. Smith, in support of the gap pay and prejudgment interest relief requested. See, e.g., ECF Nos. 224, 239, 249-1. The Court's Reinstatement Order specifically requested the parties to work together, if possible, to provide stipulated calculations on gap pay and prejudgment interest, subject to the Court's approval. Plaintiff responded by submitting these additional reports by Dr. Smith. The Dr. Smith report submitted after the Court's Reinstatement Order refers to the tax gross-up and the additional amount requested for Plaintiff's Social Security FICA taxes. ECF No. 239. Defendant does not take issue with the credibility or reliability of Dr. Smith's original reports and has presented no contrary evidence to the Court, either before or after the Court's Reinstatement Order. This is similar to trial, where the jury heard Dr. Smith testify about Plaintiff's past lost wages and Defendant did not challenge Dr. Smith's testimony with its own economist or present any evidence to the contrary. See ECF No. 173 at 32-33 ("[Plaintiff]'s termination cost him dearly. He went from a $90,000-paying job . . . to a $55,000 job. You heard Stan Smith, the Ph.D. economist, testify what those damages were. The railroad didn't bring in its own economist to challenge him and say it's wrong. They didn't say any evidence to you that [Dr. Smith] was wrong.").
Defendant also argues the Eighth Circuit's remand order is limited to reinstatement of Plaintiff to his former position, and that Plaintiff continues to request "new types of relief." ECF No. 252 at 2. It is true: reinstatement is one of the remaining issues for this Court to determine, and for the most part the Court has resolved this issue in its Reinstatement Order. But the Eighth Circuit's opinion and mandate require much more. The Eighth Circuit holds, "An employee who prevails in a FRSA action, however, 'shall be entitled to all relief necessary to make the employee whole.' " Monohon, 17 F.4th at 784 (citing § 20109(e)(2)(A)). And yet, despite the language in the Eighth Circuit's opinion, Defendant continues to recite reinstatement as the only issue before the Court. Defendant, for whatever reason, chooses not to address or develop the issues raised by Plaintiff that fall within the scope of Plaintiff's reinstatement, beyond reciting that these are "new" issues improper for this Court's determination. Defendant has therefore chosen to ignore every opportunity available to provide contrary evidence to the Court, and Defendant's contentions remain unsupported.
Because Defendant does not contradict Dr. Smith by a preponderance of the evidence, the Court concludes Defendant is not prejudiced by the Court's consideration of Plaintiff's supplemental evidence. See Hance, 571 F.3d at 520. Defendant now argues additional discovery and retention of its own expert is necessary. But it is unclear how this will benefit the Court or the parties, especially since Defendant stipulates to Dr. Smith's original calculation of gap pay and prejudgment interest, minus the additional gross-up amount and Social Security tax reimbursement. See ECF Nos. 250 at 3, 259 at 6-7. Defendant's primary argument is not a challenge to the accuracy of Dr. Smith's methodology or calculations; but is instead an objection to any additional amounts requested by Plaintiff that are within the Court's discretion to award pursuant to the Eighth Circuit's remand order. Wright & Miller, § 4478.3; see also Clemens, 874 F.3d at 1117 ("[T]he appropriate amount of any such gross up—is left to the sound discretion of the district court.").
This Court finds Plaintiff has met his burden in proving Dr. Smith's calculations are credible and reliable. Dr. Smith calculates a thirteen-percent difference between the marginal tax rate on Plaintiff's gap wages and benefits if paid in a lump sum in 2022, and the average if railroad compensation and benefits had been paid when earned between 2016 and 2022. ECF No. 239 at 4-5. For example, had Plaintiff earned railroad compensation in 2019, he would have made an estimated $112,349, and that income would be taxed at an average marginal income tax rate of twenty-three percent—or $25,840. Id. at 10; Amir El-Sibaie, 2019 Tax Brackets, Tax Found. (Nov. 28, 2018), https://taxfoundation.org/2019-tax-brackets. Today, however, Plaintiff will receive the net gap wage and benefits he is owed for the years 2016 to 2022 in a lump-sum payment taxed at a much higher tax bracket of thirty-six percent because of the large size of the award. ECF No. 239 at 4. For 2019 alone, Plaintiff ends up owing the IRS thousands of dollars in additional net tax liability. Id. at 10. Dr. Smith adds up the additional net tax liability for each year and arrives at a total of $87,882 for Plaintiff's tax gross-up award. Id. at 5.
However, Dr. Smith's tax gross-up calculations are based on a total net gap wage and benefit loss of $365,180 from May 20, 2016, to July 1, 2022. See ECF No. 239 at 4. This presents two problems: (1) Plaintiff argues he has not been fully reinstated to "active service" with the railroad so the award must be calculated beyond the July 1, 2022 date; and (2) Dr. Smith included an additional $30,415 reimbursement for Plaintiff's self-employment Social Security taxes paid. The Court has ordered that Plaintiff is not entitled to the additional $30,415 amount. Therefore, the Court subtracts $30,415 from Plaintiff's net wage and benefit loss and also subtracts the percentage of this amount that was included in Plaintiff's tax gross-up award calculation. If Dr. Smith taxed the $30,415 Social Security costs at thirty-six percent, then there would be $10,949 in additional net tax liability. After removing that amount from the gap pay total and Dr. Smith's tax gross-up calculation, Plaintiff's tax gross-up award should be $76,933—or $87,882 minus $10,949—through July 1, 2022. Because Plaintiff is not actually reinstated to active service, the Court reserves judgment on Plaintiff's additional gross-up award beyond July 1, 2022.
In conclusion, the Court awards Plaintiff a tax gross-up totaling $76,933 to cover the adverse tax consequences of Plaintiff receiving a lump-sum gap-pay award in 2022. The Court reserves judgment on any amount owed beyond July 1, 2022, until Plaintiff is actually reinstated to "active service" and Plaintiff supplements the record with Dr. Smith's updated calculations. See Perficient, Inc. v. Munley, 43 F.4th 887, 891-92 (8th Cir. 2022).
C. Reporting Months of Creditable Service to RRB
Third and finally, Plaintiff argues the Court's Reinstatement Order requires Defendant to immediately report Plaintiff's months of creditable service to the RRB based on the full amount of unmitigated RRTA Tier I and Tier II tax contributions for the years Plaintiff would have been employed but for Defendant's wrongful termination. Plaintiff also submits a declaration by Corey L. Stull, detailing several complaints about Defendant's submission of information for the restoration of Plaintiff's months of creditable service with Defendant. ECF No. 249-1 at 7-10.
Defendant argues failure to report Plaintiff's months of creditable service to the RRB only applies to the jury verdict on Plaintiff's back-pay award and is not relevant to this Court's Reinstatement Order. Defendant also contends Plaintiff did not raise this issue prior to his appeal, and therefore it is outside the scope of the Eighth Circuit's remand order. Finally, Defendant claims "this court cannot directly require the RRB to give [Plaintiff] service credit." Koziara v. BNSF Ry. Co., No. 13-CV-834-JDP, 2016 WL 616600, at *10 (W.D. Wis. Feb. 16, 2016), rev'd on other grounds, 840 F.3d 873 (7th Cir. 2016). Defendant claims it is not even feasible for the RRB to give Plaintiff service credit on his total, unmitigated railroad earnings since Tier I and Tier II taxes are only remitted to the IRS on Plaintiff's actual, mitigated railroad compensation. According to Defendant, "the RRB reviews claims for benefits," and Plaintiff cannot "short-circuit" the process by having the Court order the RRB to give service credit for lost wages and benefits. Id., at *10-11. Defendant contends the most this Court can do is order Defendant to comply with its RRB responsibilities concerning the gap-pay award.
The Western District of Wisconsin in Koziara ruled on a similar issue regarding service credit reporting with the RRB. 2016 WL 616600, at *10. The district court concluded the railroad-employer had discretion whether to honor an employee's application for service credit following a successful retaliation claim under FRSA. Id. In other words: it was feasible for the railroad to honor the unlawfully retaliated-against employee's request for service credit, but not mandatory. The Court outlined the railroad-employer and RRB obligations as follows:
The RRB will eventually determine whether Koziara's lost wage award in this case qualifies as compensation for time lost. 20 C.F.R. § 211.3. As part of this determination, the RRB may consider whether Koziara maintained his employment relationship with the railroad industry throughout the relevant 39-month period. Id. § 204.6. BNSF and Koziara will have the opportunity to present evidence and argument on this point. Id. § 204.2. Any final order of the RRB will be reviewable by a United States Court of Appeals. 45 U.S.C. § 231(g); Sass v. U.S. R.R. Ret. Bd., 305 F. Appx. 288, 290 (7th Cir. 2008).Id. Whereas, in Hance, the Sixth Circuit instructed the district court to enter an order requiring the railroad to comply with paying Tier I and Tier II taxes on the back pay awarded to the plaintiff and ordered the railroad to report retirement credit to the RRB covering the period that the plaintiff was unlawfully out of work. 571 F.3d at 523 (emphasis added).
Koziara acknowledges that this court cannot directly require the RRB to give him service credit, and so his strategy is to obtain an equitable order locking BNSF into supporting his future request to the RRB (which the company is apparently reluctant to do). Koziara observes that in other cases, BNSF has insisted that it be allowed to withhold an employee's share of RRB benefits. See, e.g., Cowden v. BNSF Ry. Co., No. 08-cv-1534, 2014 WL 3096867, at *12 (E.D. Mo. July 7, 2014). But these cases confirm only that BNSF can support an employee's application for service credit; Koziara has not identified authority holding that BNSF must do so as a result of Koziara's success on a retaliation claim under FRSA. Any inconsistency between BNSF's position in this case and its position in other cases is a matter of strategy for the company, and not a basis from which the court can require BNSF to support Koziara's case before the RRB.
Plaintiff wants his months of creditable service properly reported to the RRB based on the full amount of unmitigated RRTA Tier I and Tier II tax contributions for the years Plaintiff would have been employed but for Defendant's wrongful termination. As stated in this Court's Reinstatement Order, Plaintiff is entitled to "reinstatement with the same seniority status that the employee would have had, but for the [retaliation]." § 20109(e)(2)(A). Notably, in Social Security Board v. Nierotko, the U.S. Supreme Court held the term "service" as used by Congress in the labor and employment context is not limited to "productive activity." 327 U.S. 358, 366, 66 S.Ct. 637, 90 L.Ed. 718 (1946). Service encompasses "not only work actually done but the entire employer-employee relationship for which compensation is paid to the employee by the employer." Id. Therefore, compensation for unlawful termination encompasses compensation for the loss of service the employee would have been able to provide the employer but for the unlawful termination. Intimately tied with service and the employer-employee relationship is seniority status. As seniority increases, creditable service and the benefits that flow from creditable service also increase. "[T]he number and value of the rights and benefits increase in proportion to the amount of seniority, and it is only natural that those with the most seniority should receive the highest allowances since they were giving up more rights and benefits than those with less seniority." Accardi v. Pa R.R. Co., 383 U.S. 225, 230, 86 S.Ct. 768, 15 L.Ed.2d 717 (1966). To the extent that Plaintiff's seniority status is impacted by his service credits, the Court has already addressed this issue in its Reinstatement Order. Ultimately, it may be the case that the RRB has jurisdiction to first review and determine any issues regarding service credits after Defendant complies with its Tier I and Tier II tax obligations—and in accordance with any applicable collective bargaining agreements—before the issue comes before the Court. See Koziara, 2016 WL 616600, at *10-11. Even so, the RRB should be able to credit Defendant for the full years of service he is owed based on the restoration of his seniority, including the period he was unlawfully terminated from the railroad, if necessary to make Plaintiff whole upon reinstatement. The Court orders Defendant to comply with the Court's Reinstatement Order, and any obligations it has under the RRTA and RRA. Hance, 571 F.3d at 523.
III. CONCLUSION
For the reasons stated herein, the Court denies Plaintiff's request for an additional $30,415 of gap pay to cover the employer-equivalent share of the Social Security FICA taxes he was obligated to pay while self-employed and mitigating his damages. The Court further orders Plaintiff's gap-pay award shall include a tax gross-up in the amount of $76,933 to offset the adverse tax consequences Plaintiff will face by receiving a lump-sum award in 2022. In total, Defendant is ordered to pay Plaintiff gap pay through July 1, 2022, in the amount of $411,698—calculated by subtracting $30,415 from Dr. Smith's $365,180 estimate and adding the $76,933 tax gross-up—consistent with this Court's Order. See ECF No. 239 at 4. Additionally, while the parties have stipulated to an amount of prejudgment interest, the Court orders Plaintiff to provide Dr. Smith's updated prejudgment-interest calculation within fourteen days of this Order at the § 6621 rate, based on the updated gap pay amount through July 1, 2022.
It should not be forgotten that this case involves Defendant's intentional retaliation against Plaintiff, and the Court-ordered remedy includes compliance with actual reinstatement of Plaintiff to the track inspector position as quickly as possible. ECF No. 234; see Monohon, 17 F.4th at 783-84. At this point, Plaintiff is only partially reinstated because he has not been returned to "active service" due to difficulties with requalification testing and various failures between the parties and their counsel to effectively communicate with each other. See ECF Nos. 257-60. The parties disagree as to the date of Plaintiff's actual reinstatement and have presented several factual disputes regarding this issue in affidavits and supplemental briefing. Id. The Court acknowledges that reinstatement can be a difficult remedy to effectuate, especially when nearly a decade has passed since Plaintiff worked for the railroad. Indeed, there have been several changes to the railroad's standards, policies, regulations, and training requirements. See ECF No. 257 ¶¶ 2, 10; ECF No. 261 at 9. That said, the parties have sent conflicting messages about how Plaintiff's requalification testing should come about. Compare ECF No. 259-2 (listing the "standard return-to-service work requirements" Plaintiff would need to accomplish before returning to active service and providing Plaintiff a short turnaround to complete various tasks), with ECF No. 257 ¶¶ 3-14 (describing Plaintiff's struggle in navigating the testing dates and times, and various miscommunications between Plaintiff and Defendant), and ECF No. 260 (describing the conflicting information Defendant has provided to Plaintiff). Rather than set out in writing what the specific process should be for Plaintiff's actual reinstatement to active service, counsel for Defendant insists on Plaintiff figuring out the process on his own by working with his supervisor. ECF No. 262 at 4 (responding to request for assistance with reinstatement process by stating, "These are not legal issues for lawyers to be involved in . . . . [H]e needs to work with his supervisor just like any other BNSF employee to get his questions resolved."). The Court ordered reinstatement as the remedy that should occur, despite the difficulty in the process. The Court senses the frustration the parties understandably feel, but the law demands reinstatement despite its difficulty. The Court thus orders Defense counsel to be involved, and cooperate with opposing counsel, in reinstating Plaintiff to active service. Counsel shall communicate the plan, and the specific steps Plaintiff must take to actually be reinstated, including testing times and locations with adequate advance notice provided to Plaintiff.
Considering the protracted nature of this litigation, the Court's duty to make Plaintiff whole, and the Eighth Circuit's opinion, there seemingly is a desire to end the eight "long years of judicial journeying" in this case. J.H. Rutter Rex Mfg. Co. v. NLRB, 473 F.2d 223, 243 (5th Cir. 1973). "Having uttered our novena for speed, however, we cannot forsake the belief that litigants believing in the rectitude of their cause are entitled to their days and perhaps years in court, we shall never fail in our duty to keep the forum open, our ears dinned daily by the anguished cries of judicial statisticians. In summary, we deplore the delay, but we would not substitute one hour of efficiency for one moment of justice." Id. Likewise, "[w]hile a district court's jurisdiction typically ends when a case is closed and judgment entered, a district court retains ancillary jurisdiction to 'manage its proceedings, vindicate its authority, and effectuate its decrees.' " Jenkins v. Kan. City Mo. Sch. Dist., 516 F.3d 1074, 1081 (8th Cir. 2008) (citing Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 380, 114 S.Ct. 1673, 128 L.Ed.2d 391 (1994)); see also Wright & Miller, § 3523.2. Plaintiff is not back to work. The Court thus retains jurisdiction to ensure the remedies in its Reinstatement Order occur. For that reason, and consistent with the Eighth Circuit's opinion, the Court reserves ruling on any final amount of additional gap pay and prejudgment interest owed beyond July 1, 2022. Given the disputes about why active service has not been achieved, it may be necessary that the Court conduct a hearing on Plaintiff's post-July 1 gap-pay entitlement.
Defendant also briefly contests any additional attorneys' fees owed after the Court's Order (ECF No. 235) granting Plaintiff's Fourth Motion for Attorneys' Fees. See ECF No. 259 at 7. This Court refrains from addressing that issue at this time as it is separate from the Court's Reinstatement Order and gap-pay award, and Plaintiff has not formally motioned the Court for additional attorneys' fees.
Finally, for purposes of appeal, it shall be noted that this is not a final judgment of the district court. Perficient, Inc., 43 F.4th at 891-92. "A judgment awarding damages but not deciding the amount of the damages or finding liability but not fixing the extent of the liability is not a final decision within the meaning of [28 U.S.C.] § 1291." Dieser v. Cont'l Cas. Co., 440 F.3d 920, 923 (8th Cir. 2006) (citation omitted).
IT IS SO ORDERED.