*1 UNITED BURKE STATES et al. Argued May 26, 1992
No. 91-42. January 1992 Decided Blackmun, J., Rehnquist, Court, opinion delivered which *2 J., White, Stevens, Kennedy, JJ., joined. Scalia, J., post, C. and and Souter, J., post, p. p. 242, opinions concurring and judg- filed in the O’Connor, J., Thomas, J., dissenting opinion, ment. filed a in which joined, post, p. 248.
Jeffrey argued R, Minear the cause for the United States. Starr, On the briefs were Solicitor General Assistant Attor- ney Deputy Peterson, Wallace, General Solicitor General Belanger Durney, Kent L. and Jones, Ann Bruce R. Ellisen. Joseph Finley argued respondents. E. cause With Finley.* him on the Lucinda M. brief was opinion delivered the of the Court. Justice Blackmun payment In this case we whether a in decide received backpay settlement claim of a under Title VII the Civil Rights Act amended, 78 Stat. as U. C.S. seq., recipient’s gross et 2000e is excludable from the income of the federal Internal Code, Revenue §104(a)(2), “damages U. S. C. received on account ... personal injuries.”
I dispute. Judy The relevant facts are not in In A. employee Valley Authority Hutcheson, an of the Tennessee (TVA), filed a Title VII action the United States District
*Briefs of amici curiae urging affirmance were filed for the American Zaleznick, Cathy Steven S. by Association of Retired Ventrell- Persons Monsees, Raymond Fay, C. Joyce; and Thomas F. for the American Civil Chinnis, Jr., Wetherfield, C. Cabell Alison C. by Liberties Union et al. Davis, Shapiro, Pinzler, Martha F. R. Steven Isabelle Katz L. Julius Chambers, Stephen Ralston; Charles Equal Employment for the Advi Douglas McDowell; Robert E. sory Williams S. by Council Equal Bomse, Davis, Stephen Nancy V. Rights Advocates, Inc., by L. and Maria Blanco; Mary B. Erp, Michael K. O’Mel Employed by for Women et al. veny, Stephen Seliger; G. Employment Lawyers for the National Asso B. Fitzpatrick; Robert by ciation and for the National Women’s Law Cen ter Walter J. Rockier.
Raymond Serwer, Fay, C. Alan M. Joyce and Thomas F. filed a brief as amicus curiae. for the United Group Airlines Pilot Court for the Eastern alleging District of Tennessee TVA had unlawfully payment discriminated in the of salaries on the basis of sex. The Employees Officeand Professional represented International Union, which employ- affected Among ees, represented intervened. employees were respondents Cynthia Therese A. Burke, R. Center, and Linda G. Gibbs. complaint alleged that TVA had increased the salaries employees pay certain male-dominated schedules, but
had not employees increased the salaries of in certain female-dominated schedules. In complaint addition, alleged that TVA had lowered salaries in some female- (CA6) App. (herein- dominated schedules. in No. 90-5607 *3 (Second App.), pp. after Complaint). Amended The plaintiffs sought injunctive backpay relief as well as all for employees. affected female Id., at 33-34. The defendants against filed a counterclaim alleging, among the union other things, misrepresentation, fraud, and breach contract. Id., at 35.
After the District Court denied cross-motions for sum- mary judgment, parties reached a settlement. TVA agreed pay to $4,200 to Hutcheson and a total of million $5 employees, the other affected to be distributed under a length formula based on pay. service and rates of Id., at Although 70-71, 76-77. TVA did not withhold taxes on the $4,200for pursuant Hutcheson, it did agree- withhold, to the ment, federal income taxes on the amounts allocated other employees, including affected respondents the three here.1 1The pretax figures for the respondents three ranged $928; from $673 to the federal income tax ranged withheld from $114 $186. 90-1 USTC (1990). 50,203, p. 83,747 ¶ Although respondents sought also a refund of taxes withheld from their incomes pursuant to the Federal Insurance (FICA), Contributions Act 26 U. seq., et § S. C. 3101 the parties neither nor the courts below addressed the analytical question distinct whether back-
pay received under Title “wages” subject constitutes to taxation for FICA purposes. 3101(a) § See 26 U. S. C. (imposing percentage tax on 3121(a) “wages”), (defining “wages” as “all remuneration employ-
Respondents filed claims for refund of the taxes withheld payments. from the The Internal settlement Revenue (IRS) Respondents Service disallowed those then claims. brought refund action in the District United States Court claiming Tennessee, for the that the Eastern District set- respective payments tlement should be excluded from their 104(a)(2) gross incomes under of the Internal Revenue Code (whether “damages agreement as received suit or lump periodic payments) whether as sums or as on account or sickness.” The District Court ruled respondents sought only that, wages and obtained back because discriminatory due them as a result of TVA’s under- payments compensatory damages, than or other rather proceeds gross settlement could not be excluded income “damages personal injuries.” received on account of ... (1990). ¶ 50,203 90-1 USTC Appeals
The United
for the
Circuit,
States Court
Sixth
by a
vote,
divided
Court of concluded that exclusion under injury “personal turns on whether the and the claim are Id., tort-like nature.” “If the answer 1121. beginning affirmative,” the held, court “then that is the (internal inquiry.” quotation Id., end of the at 1123 marks omitted). The court concluded that unlawful TVA’s sex personal, discrimination constituted a tort-like *4 respondents, rejected attempt and the Government’s distinguish compensatory Title VII, which authorizes no punitive damages,2 thought from other statutes to redress personal injuries. id., Thus, See the court 1121-1123. backpay pursuant held, the award of to Title VII was exclud- 104(a)(2). § gross able from income under ment”). Hence, analysis we our confine in this case to the federal income tax question. 2 Rights recently The Civil Act of 1991 amended Title'VII to authorize recovery compensatory punitive damages in certain circum 12, stances. See nn. 8 and infra.
233 2d, The dissent in the Court of 929 F. at 1124, Appeals, took the view that the settlement of claims for respondents’ earned but that would unpaid wage wages differentials — have been would have been to tax absent paid subjected TVA’s unlawful discrimination —did not constitute compensa- 104(a)(2). § tort,” tion for “loss due to a required id., at 1126. We certiorari to resolve a conflict granted among Courts of the exclusion of Title VII Appeals concerning 104(a)(2).3 § awards income under 602 backpay gross (1991). U. S.
II
A
The definition of
income under the Internal
gross
Revenue
61(a),
§
Code
Section
sweeps broadly.
61(a),
U. S. C.
pro-
vides that
income means all income from whatever
“gross
derived,”
source
to the exclusions
subject only
specifically
enumerated elsewhere in the Code. As this Court has rec-
61(a)
§
ognized,
intended
and its
Congress
through
statutory
to exert “the full measure of
precursors
its taxing power,”
Helvering v.
Clifford,
(1940),
U. S.
and to bring
within the definition of income
any “accessio[n]
wealth.”
Co.,
Commissioner v. Glenshaw
Glass
(1955). There is no
the settlement awards in
dispute
this case would constitute
income within the reach of
gross
61(a).
See Brief for
9-10.
Respondents
however,
is whether
the awards
question,
qualify
exclusion from
special
104(a),
income under
which
gross
3Compare the Sixth
Sparrow
v. Com
opinion
Circuit’s
this ease with
missioner,
(1991) (Title
App.
backpay
292 U. S.
D. C.
provides in relevant include—” (whether
“(2) damages any received of the amount lump by agreement sums or as and whether as suit or injuries personal or periodic payments) on account sickness ... .”4 104(a)(2) history legislative nor the the text
Neither injuries.”5 “personal any explanation the term offers formally regulations linked have 1960, however, IRS Since 104(a)(2) personal for of a identification ‘damages received principles: “The term tort to traditional (whether agreement)’ means an amount received suit or upon legal through prosecution based suit or action of a . . . agreement through rights, type a settlement or tort or prosecution.” 26 CFR 1.104- in lieu of such entered into 1(c) (1991). Commissioner, 87 T. C. Threlkeld v. (“The (1986) of an exclusion element essential must derive involved that the income section is payor. against As a ... tort claim some sort of helpful deciding concepts in are tort law result, common law compensated ‘personal being in taxpayer a a whether (internal omitted), quotation 2d jury’”) aff’d, 848 F. marks (CA6 1988). wrong, broadly other as a “civil “tort” has been defined A provide the court will contract, for which than breach remedy damages.” Kee See W. form of an action and Keeton on Owen, D. Prosser Dobbs, Keeton, R. & ton, D. (1984). principles figure thus Remedial the Law of Torts conceptualization prominently of torts. definition and sickness,” injuries provides “Compensation for Section entitled received for gross income for amounts similar exclusions from (§ 104(a)(1)), programs compensation under worker’s or sickness (§ 104(a)(3)), pension pro and certain federal health insurance accident or 104(a)(4)). (§ grams (1954); Sess., Rep. e. S. See, Cong., 2d Rep. H. R. No. 83d Sess., Cong., 2d No. 83d
235 (12th See R. Heuston, Salmond on the Law of Torts 9 ed. 1957) (noting damages” that “an action for is “an essential every characteristic of true tort,” that, even where other injunction, may relief, such as an available, be “in all such solely by right damages cases it is virtue of the that the tort”). wrong complained of is to be classed as a Indeed, liability one of the hallmarks of traditional tort is the avail ability range damages compensate plain of a broad of the “fairly injuries tiff legal caused the violation of his rights.” (1978). Carey Piphus, 247, v. 435 U. S. 257 Al though damages compensatory these often are described in Memphis Community terms, see School Dist. Stachura, v. (1986), many they 477 larger 299, U. S. in cases are than necessary monetary amount to reimburse actual loss sus anticipated by plaintiff, tained or even and thus redress intangible important, elements of that are “deemed though pecuniary [their] even not immediate conse quence[s].” Dobbs, D. Law of Remedies 136 Cf. (1992)(com United States, 502 301, Molzof v. pensatory prohibited awards that exceed actual loss are not “punitive” Act). damages as under the Federal Tort Claims example, physical injury may
For per- the victim of a be damages mitted, under the relevant law, state to recover not only wages, expenses, for lost medical and diminished future earning capacity injury, on account of the but also for emo- pain suffering. tional distress and Dobbs, at 540- 551; Threlkeld Similarly, Commissioner, C., T. at 1300. “dignitary” nonphysical the victim of a tort6 such as defa- §104(a)(2)’s Although briefly interpreted the IRS statutory predeces sor, 213(b)(6) Act Revenue 40 Stat. to restrict scope personal injuries physical injuries, see S. 2 Cum. Bull. 71 (1920) (determining, on statutory basis of “history text and legisla tion” appears that “it probable more ‘personal .. . that the injuries,’ term physical used therein injuries only”); Knickerbocker, means The Income Tax Treatment Damages, Q. 429, 431 (1962), Cornell L. the courts and long 104(a)(2)’s recognized IRS since have “personal reference to injuries” encompasses, judicial parlance accord common and con- any only pecuniary may loss actual recover
mation (e. customers), “impairment but for of business or loss community, standing reputation humilia- in the (6th 1990); Speiser, C. Dictionary 786 ed. S. ceptions, Black’s Law see (1983), Gans, nonphysical Torts 6 Krause, & American Law of A. emotions, reputation, or charac individual, affecting to the such as those (CA3 Commissioner, See, 900 F. 2d ter, g., Rickel v. as well. e. *7 1990) meaning judicially that the of (noting “it well-established that nonphysical as well as encompasses both ‘personal injuries’ in this context (CA9 1983) 693, 697 Commissioner, 716 F. 2d injuries”); Roemer v. physical 104(a)(2) injuries,” “says nothing physical § and that (noting about that physical to a personal injury is not limited ordinary meaning of a “[t]he 104(a)(2) § one”); 85-98, (holding that the 1985-2 Cum. Bull. 51 Rev. Rule injuries”); physical or emotional no distinction between exclusion “makes Commissioner, 3, acquiescing Seay v. 58 T. C. Bull. 1972-2 Cum. (1972) embarrassment,” “personal damages for (holding that received strain,” reputation” may be excluded injury “personal and “mental of af 104(a)(2), noting prior rulings regarding § alienation and defamation). Lokken, L. Federal Taxa See also B. Bittker & fections and (2d 1989); Friel, Income, Burke & Tax and Gifts 13-11 ed. tion of Estates Injury Awards, L. 50 Mont. Employment-Related Personal Treatment (1989). 13, 21 Rev. 104(a)(2) § provides support further for Congress' 1989 amendment injuries” physical nonphysical well as “personal that includes the notion 104(a)(2) § rejected have injuries. Congress a bill that would limited involving “physical injury physical or sickness.” See to cases exclusion (1989) § 101-247, (describing proposed 11641 Rep. pp. H. R. No. (1989)). time, Congress Cong., At the same of H. R. 101st 1st Sess. 104(a) only in punitive damages § amended to allow the exclusion 101-239, physical or Pub. L. involving “physical cases sickness.” (1988 I). 104(a) 7641(a), 2379,26 ed., § Supp. U. S. C. The enact- 103 Stat. addressing only punitive damages shows ment of this limited amendment (i. e., damages compensatory) would be Congress that other that assumed physical nonphysical injury. excluded in cases of both separate opinion Notwithstanding Justice Scalia’s contention his injuries” read as limited to “health”- “personal that the term must be foregoing authorities establish that injuries, post, see at related 104(a)(2) physical nonphysical encompasses range in fact a broad acknowledges implicitly interests. Justice Scalia statutory phrase support can this well- plain meaning post, at established view. See 243-244. anguish suffering.”
tion, and mental Gertz v. Robert Welch, Inc., also Dobbs, punitive exemplary damages Furthermore, 510-520. are generally available in those instances where the defendant’s misconduct was intentional or id., reckless. See at 204-208; supra. United States, Molzof v. agree Appeals’ analysis We thus with the Court of insofar § 104(a)(2), focused, as it on the nature of the underlying respondents’ damages claim award. See 929 F. 2d, at 1121; Threlkeld Commissioner, C., 87 T. at 1305. Respondents, part, agree appro- for their that this is the priate inquiry, Respond- as does the Brief dissent. See post, 9-12; ents at 250.7 In order to come within the respondents income exclusion, therefore must legal show that recovery VII, Title basis for their backpay, personal injury redresses a tort-like in accord with foregoing principles. inquiry. We turn next to this
B *8 Rights Title VII of the Civil Act of 19648makes it an un- employment practice employer lawful for an “to discriminate against any respect compensation, individual to his privileges employment, terms, conditions, or of because 7The dissent nonetheless “misapprehen[d] contends that we the nature inquiry required by § regulation” and the IRS “[focus ing on [the] remedies” available under post, Title VII. See at 249-250. above, As discussed however, concept inextricably a “tort” is bound up with specifically damages Thus, actions. we believe that remedies — consideration of the remedies available under Title VII is critical in deter mining the “nature of the “type statute” and the of claim” brought by respondents 104(a)(2). purposes post, at 250. 8 below, As discussed Rights 1991, the Civil Act of 102-166, Pub. L. Stat. amended Title VII in significant respects. Respondents do not contend that these apply amendments to this case. See Tr. Arg. of Oral 35-36. We therefore examine the prior law as it existed to November 1991, the effective date of the 102-166, 402(a), 1991 Act. See Pub. L. Stat. 1099. Unless indicated, otherwise all references are to the “un amended” Title VII. religion, origin.” color,
such individual’s race, sex, or national §2000e-2(a)(1). 42 U. S. C. If administrative remedies are aggrieved employee may unsuccessful, an file suit in a dis §2000e-5(f)(1), although Appeals court, trict the Courts of plaintiffs, ordinary plain have held that Title VII unlike jury tiffs, are not entitled to a See, trial. e. Johnson v. (CA5 Georgia Highway Express, Inc., 417 F. 2d 1969). See Loether, also Curtis v. U. S.
(1974) (describing availability jury trials for common-law action); cases). (citing forms of id., 196-197, n. 13 Title VII employer engaged If the court finds that the has in an unlaw employment practice, may enjoin practice ful it may appropriate, “order such affirmative action as be which may hiring include, but to, is not limited reinstatement or employees, pay any equita with or without back or ... other appropriate.” §2000e-5(g). ble relief as court deems beyond question employment It is that discrimination in any on the sex, race, basis of or of the other classifications protected by respondents argue Title is, and this consistently practice Court held, has an invidious that causes grave Respondents harm to its victims. See Brief for Griggs 35-39; Co., v. Duke Power employment fact that discrimination causes harm to individ- automatically imply, uals does not however, that there exists “personal injury” a tort-like of federal income tax law. physical
Indeed, contrast to the tort remedies for nonphysical injuries above, discussed Title VII does compensatory punitive damages; allow awards for instead, injunctions, backpay, it limits available remedies to and other equitable §2000e-5(g); relief. See Patterson v. McLean *9 (1989) (noting Union, Credit 491 164, 4 182, U. S. n. that plaintiff recovery in a Title VII action is “limited to a backpay”); Great American Fed. Sav. & Loan Assn. v. Novotny, (1979);Sparrow 442 U. S. 374-375 v. Commis App. sioner, 292 U. S. D. 259, 262-263, C. 949 2d 437- F. (1991) cases). (collecting employee wrongfully An dis- charged may only on the basis of sex thus recover an amount equal wages employee to the would have earned from discharge along the date of to the date of reinstatement, fringe pay pension lost benefits such as vacation and bene- similarly, employee wrongfully promotion fits;9 an denied a wrongfully sex, on the basis of or, case, this discrimi- against salary may only nated on the sex, basis of recover appropriate pay pay the differential between the and actual performed, for services as well as lost benefits. previously
The Court has observed that Title VII focuses “legal injuries on of an economic see character,” Albemarle Paper (1975), Moody, consisting spe- Co.v. cifically deprivation wages of the unlawful of full earned or performed, deprivation due for services or the unlawful opportunity wages through wrongful to earn termina- remedy, correspondingly, restoring tion. consists of through backpay injunctive victims, relief, awards and to the wage employment positions they occupied would have (citing absent the unlawful id., discrimination. See at 421 (1972)). Cong. Nothing Rec. 7168 in this remedial purports recompense plaintiff any scheme a Title VII of the other traditional harms associated with in- jury, pain suffering, such as emotional distress, harm to reputation, consequential damages (e.g., or other a ruined rating). credit Co., See Walker v. Ford Motor 684 F. 2d (CA11 1982). 1355, 1364-1365, 16n. “personal
No doubt discrimination could constitute a in- jury” if the relevant cause action conception remedy. evidenced a tort-like Cf. (noting Loether, Curtis v. at S., 195-196, U. 10n. logic development “under the of the common law of a law of plaintiffs Some courts have Title wrongfully allowed who were discharged and for whom reinstatement was not feasible to recover “front Express Corp., e. pay” See, Shore Federal earnings. future lost (CA6 1985). 777 F. 2d
insult and
racial discrimination
be
indignity,
treated
might
(internal
omitted)).
aas
tort”
marks
In-
dignitary
quotation
deed, the circumscribed
under
remedies available
Title VII
stand
marked contrast not
to those available under
only
traditional
law,
but under other federal antidiscrimina-
§
tion statutes,
1977,
as well.10 For
Rev. Stat.
example,
§ 1981,
U. S. C.
victims of race-based
permits
employment
discrimination to obtain a
trial at which “both
jury
equitable
relief,
under
legal
and,
certain
including compensatory
circumstances,
be
punitive damages” may
awarded.
John-
son v.
Inc., 421
Railway
Agency,
454,
Express
(1975). The Court
has observed that Title VIII of
similarly
Civil
Act of
whose fair
Rights
housing provisions
allow for
trials and for awards of
jury
compensatory
pu-
nitive
“sounds
in tort” and
damages,
basically
“contrasts
with the relief available
sharply”
under Title VII. Curtis v.
3613(c).11
Loether,
S.,
415 U.
at
197; U. S. C.
10 Title
expressly
backpay
VIPs remedial scheme was
modeled on the
provision of the National Labor
Paper
Relations Act. See Albemarle
Co.
160(c)
Moody,
419-420,
(1975);
422 U.S.
and n. 11
29 U. S. C.
(Board
persons
shall
practices
order
to “cease and
desist”
unfair labor
take
including
employees
to
“affirmative action
reinstatement of
pay”).
previously
without back
This Court
backpay
has held that
unlawfully
awarded under
discharged employee
the Labor Act to an
con
“wages”
Security
stitutes
of the Social
Act. See Social Se
curity
Nierotko,
Board v.
Notwithstanding tradition of broad tort and the damages existence of other federal antidiscrimina- *11 tion statutes offering broad similarly remedies, de- Congress clined to Title recompense plaintiffs anything beyond due wages properly if that, in the wages paid or- them — course, would have dinary been fully taxable. Frolik, See L. Federal Tax Aspects and Injury, Loss 70 Damage, Thus, we cannot that a say statute such as VII,12 Title whose sole remedial focus is the award of back wages, redresses a tort-like personal 104(a)(2) within the injury §of meaning and the applicable regulations.13 involving
those other federal antidiscrimination statutes for 104(a)(2). § post, at 250-252. 12 Respondents Congress’ contend that expansion recent of Title VII’s scope remedial supports argument their that Title VII claims are inher ently tort-like in nature. See Respondents Brief for 34. Under the Civil Rights Act of victims of intentional discrimination are entitled ato jury trial, they may which compensatory recover damages for “future pecuniary losses, pain, emotional suffering, inconvenience, anguish, mental enjoyment life, loss of nonpecuniary losses,” other puni as well as damages. tive 102-166, 105 See Pub. L. respondents, Stat. 1073. Unlike however, Congress’ we believe that permit jury decision to trials and com pensatory punitive damages under the signals amended Act a marked change conception in its injury of the by VII, redressable Title and cannot imported be analysis back into of the statute as it existed at the time of g., e. See, this Rep. (1991) (Re lawsuit. 102-40, pt. 1, H. R. No. pp. 64-65 port Labor) of Committee on Education and (“Monetary damages also are necessary to make discrimination victims whole for the terrible careers, their to their mental health, and emotional and to their self- id., respect dignity”); pt. p. (Report of Committee on the Judi (“The ciary) limitation of relief under equitable Title VII to remedies often means that victims of may intentional discrimination not recover for the very discrimination”). real effects of the holding Our damages that received settlement of a Title VII claim properly 104(a)(2) are excludable support under longstanding finds rulings e. See, IRS. 72-341, Rev. Rule 1972-2 Cum. Bull. 32 (payments by corporation employees to its in settlement of Title VII suit must be included in employees’ gross income, payments as the “were compensation based on they received”). otherwise would have backpay
Accordingly, awards received that the we hold claims are not respondents of their Title VII in settlement “damages gross received on ... income excludable from 104(a)(2). judg- injuries” personal account of Appeals is reversed. ment of the Court is so ordered.
It in the Scalia, concurring judgment. Justice 104(a)(2) Code excludes of the Internal Revenue Section any damages gross received ... income “the amount from 26 U. S. C. or sickness.” on account of added). accepts (emphasis at the out The Court (IRS) regu analysis Internal Revenue Service of its set 1960) injuries” “personal (dating that identifies lation generically, “tort of, exclusion with the violation under this *12 (1960); Reg. rights,” type CFR or Fed. (1991)1 §1.104-11(c) coverage extending the —thus “ tort[s] ‘dignitary’ nonphysical provision such as def or omitted). (footnote Thereafter, ante, at 235-236 amation,” determining opinion simply the criterion considers the type rights” the issue on stake, are at “tort or tort whether disagrees it with the dissent. which qualifi- accepting, my without there is no basis for In view rights” formulation, since it is not cation, the IRS’ “tort interpretation range of the statu- within the of reasonable tory Resources A. Inc. v. Natural U.S. text. See Chevron (1984). In iso- Inc., 837, Council, 467 U. S. Defense injuries” “personal suppose, can be read to term lation, I the “ any encompass injury ‘for which interest noncontractual remedy provide action for in the form of an a the court will only the term regulation purports expressly to define 1 Though this 1.104-1(c) (1991), succeeding received,” and not the CFR “damages IRS injuries”), the interpret today (“personal upon term we are called §of as descriptive of the ambit long regulation treated the has 51; 85-98, 1985-2 Brief for United e. Rev. Rul. See, Cum. Bull. a whole. 22-23. States
damages.’” (quoting Ante, at 234 Keeton, W. Dobbs, D. R. Keeton, & D. Owen, Prosser and on Keeton the Law of Torts (1984)). assuredly That only permissi- not, however, the meaning ble of the term. Indeed, its more commonconnota- only (as physical tion injuries embraces person to the when consequences the of an “per- auto accident are divided into injuries” sonal “property damage”),2 perhaps, or in addi- injuries person’s tion, to a mental health. phrase
“Under American ‘per- law, decisional injury’ sonal primarily injury denotes body an to the person. a At least some of the courts, however, have narrowly not the term, limited and have concluded that personal injury a person, anor to the within the meaning of the necessarily law, physical does not involve person injured contact bodily physi- or mere injuries, may cal but embrace all actionable to the Speiser, individual himself.” 1 S. Krause, C. & A. Gans, American Law of Torts 6 (6th 1990). Dictionary also Black’s Law ed. deciding In go beyond whether the words their more nar row meaning and more normal my here, the critical factor, “personal view, is the injuries” fact that appears isola part tion phrase but as “personal injuries of or sickness.” As the repeatedly, “[t]he Court has said maxim noscitur a sociis, a that word company is known keeps, it while inescapable not an wisely applied rule, is often where word *13 capable many is meanings in giving order to avoid the unintended breadth Congress.” to the Acts of Jarecki v. (1961). D.G. Co., Searle & 367 303, 307 The term “sick “[diseased ness” connotes a [or] condition; illness; ill health,” (2d Webster’s Dictionary New International 2329-2330 ed. 1950), companion and I think that similarly its must be read 2As it happens, this was original the IRS’ understanding with regard 104(a)(2)’s §to predecessor, 213(b)(6) § of the Revenue Act of 40 Stat. g., e. See, 1066. S. 2 Cum. Bull. 71 (or mental) injuries physical
to connote It is al- health. phrase “per- part to believe that the most odd first of the injuries encompasses defamation, sonal or sickness” as it part phrase would be to believe that the first “five pedal feet, two inches” refers to extremities. interpretation suggest supported The commonsense I “personal as well several other First, factors. the term § injuries 104(a), or sickness” is used three other times in necessarily injuries in each instance its sense is limited to 104(a)(1) § physical (gross or mental health. See income does not include “amounts received under workmen’s com- pensation injuries compensation personal acts as or 104(a)(3) added)); § (emphasis (gross sickness” income does not through include “amounts received accident or health insur- added)); personal injuries (emphasis ance or sickness” 104(a)(4) § (gross income does not include “amounts received pension, annuity, personal inju- as a or similar allowancefor resulting ries or sickness from active service in the armed disability annuity payable forces ... or as a under . . . the added)). Foreign (emphasis Act” When, Service sandwiched among provisions, these one sees an exclusion for “the any damages amount of received ... on account injuries sickness,” or one intended, has little doubt what is (or recovery it is not for defamation other invasions of “personal” necessity, interests that do not, of harm the vic- health). physical provision tim’s or mental Second, exemption, category issue here is a tax of text for which adopted we have a rule of See, narrow construction. e. Savings FSB, United States v. Centennial Bank 499 U. S. (1991).3 573, 104(a), § Congress provide prospectively amended that “punitive damages shall not shelter from taxation in connection involving physical injury
with a case not physical sickness.” L. Pub. 101-239, 104(a) (1988 § 7641(a), ed., Supp. I); 103 Stat. 26 U. S. C. id., 7641(b). (whereas see previously As thus amended it is clear it was not) “personal only physical, or sickness” includes but *14 question, The payments then, is whether the settlement at issue in this personal case were “received .. .on account injuries” injuries recipients’ “on viz., account of” to the — physical qualify or mental as to health —so for exclusion 104(a)(2). Though quite under possible I think not. it is employment for a victim of race- or sex-based discrimina- psychological tion to suffer harm, her entitlement to back- pay depend showing. Title VII does not on such a experienced Whether or not she has the sort of disturbances phrase “personal injuries” her mental health that the de- scribes, a Title VII “restored]... claimant is entitled to be wage employment positio[n] to the [she] would have oc- cupied absent the unlawful Ante, discrimination.” at 239; Paper Moody, see Albemarle Co. 422 U. S. (1975)(“[Gjiven finding backpay of unlawful discrimination, only should applied be denied generally, which, for reasons if would statutory not frustrate the central of eradi- cating throughout .”). economy discrimination the . . only dignifies that harm Title VII the status of redress- legal injury able deprivation is the antecedent economic that produced the place. Title VII violation in the first id., (“Title legal injuries VII deals with of an economic .”). respondents character . . I thus conclude that did not (in payments receive respect their backpay) settlement “on injuries” account of meaning within the §104(a)(2), judgment and would reverse the of Court Appeals. Secretary’s
It is regulation, true that the current at least applied as it by has supra, been IRS, see 1,n. contradicts interpretation of the statute I have set forth above. But agencies while regulations are bound those that are is- (at scope sued within the their lawful discretion until least regulations are through appro- modified rescinded also psychological disease; harm or nevertheless, the amendment does not require phrase unnaturally to be extended to nei- affect ther mind body. nor
priate g., Vehicle Assn. means, see, e. Motor United Mfrs. of States, Co., Inc. Farm Mut. Automobile Ins. v. State (1983)),they by regulations be cannot bound U. S. Secretary contrary Otherwise, the that are to of law. Treasury effectively empowered repeal be taxes would Congress Manage Personnel that the enacts. Cf. Office (1990). The exist Richmond, 414, 427-428 ment 496 U. S. Treasury regula “taxpayer-friendly” ence of an ever-so-rare text) (however statutory may be inconsistent with the tion blameworthy pay penalties for failure to relevant to whether States, 498 can be see v. United U. S. assessed, Cheek (1991), whether the but it cannot control determination according Congress’ owing tax due and command. was (and acknowledge Finally relatedly), I must that the basis rely reversing Appeals on which I has not Court argued by The rule States, been the United here below. points argued not be considered is more than will just prudential convenience; observance, rule of its at least distinguishes adversary majority our cases, in the vast system justice inquisitorial one. See United Pryce, App. 84, 96, 2d States v. 291 U. S. D. C. F. (1991) (Silberman, dissenting part). so, J., Even enough play joints Supreme in the that the there must be judgment rule law need not render on the basis of a Court things, simply apparent face of whose nonexistence is on the parties agree upon particularly when the because the it— judgment already prevalent sys- will error in the reinforce Co., 498 See, tem. e. Arcadia v. Ohio Power (1990). I think that is the case here. foregoing judgment. I in the reasons,
For the
concur
in the
Souter,
concurring
judgment.
Justice
recovery
may
Respondents
from taxable
not exclude their
upon
their
was one “based
tort or tort
income unless
action
1.104-1(e) (1991).
type rights.”
the reason
On
CFR
assumption
regulation reflects the broad dichot-
able
that the
omy
posited
between
contract and tort
post,
the dissent,
good
put
249-252, there are
reasons to
a Title YII claim
on the tort side of the
parallels
line. There are definite
be-
say,
tween,
a defamation
plain-
action, which vindicates the
good
tiff’s interest in
name, and a Title
argu-
VII suit, which
ably
dignity
vindicates an
interest
being
as a human
judged
entitled
be
on individual merit. Our cases have,
recognized parallels (though
indeed,
purposes)
for different
between tort claims and claims under antidiscrimination
statutes other than Title VII. See Goodman v. Lukens
*16
(1987)
Steel Co.,482 S.
(similarity
U.
between claim
under 42 U. S. C.
personal-injury
1981 and
claim for
determining applicable
of
limitations);
statute of
(1985)
Wilson
(same
v. Garcia,
While I majority do not holding in that the tort-like character of a solely claim should turn plain on whether the tiff “intangible can recover for injury,” elements of ante, at agree 235, I that Title recovery VII’s limitation to lost (“back wages pay”) against holding counts respondents’ stat utory type.” action to be “tort actions, Tort it cannot be gainsaid, commonly (though invariably*) permit recov ery intangible injury. for Ante, Backpay, at 234-237. on the other quintessential^ hand, is a contractual measure of damages.
A similarity further between Title VII and contract law, least existing employment context of an relation- ship, great is the guaranteed rights resemblance of by Title commonly VII arising to those under the terms and condi- *In those States that have recovery barred in tort “intangible ele- ments injury,” see, e. N. (West §59:9-2(d) J. Stat. 1982) (action Ann. against public entity or employee); §4.20.046(1) Wash. (1989) Rev. Code (action by estate of deceased), the modified action is fairly still described as one “based upon rights,” certainly is an “action upon based tort-type rights.” on discrimi- employment Title VII’s ban contract: of an
tions by implied term easily as a contractual envisioned nation King Spalding, 69, 74-75, 467 U. S. & law. See Hishon (“Even (1984) employment did not afford contract if the n. 6 promote] [decisionto implied condition a basis for an itself would fairly merits, Title VII made on be would McLean Credit requirement”); Patterson v. impose such (1989) (“[T]he performance of es- Union, S.U. continu- obligations and the conditions tablished contract by governed contract [are] state ing employment matters ... VII”). suggested that “the it has been Indeed, Title law and every implied terms guaranteed Title are rights Battle- Marcosson, & employment . . .” Shanor contract . Employment Discrimination ground a Divided Court: 145, 174, n. 118 Law. Supreme 1988-89, 6 Lab. Court, added). (1990)(emphasis way. tug to de- It is good needless each reasons sum,
In in this case tug for the outcome however, harder, which cide statutory interpretation that rule the default follows narrowly construed. See be must from income exclusions Savings FSB, 499 U. S. Bank v. Centennial States United *17 (1991); Jacobson, 28, 336 S.U. Commissioner (1949). held to be to wealth is not accession is, That an 49 provision Internal income unless some excluded being clearly here no clear There so entails. Revenue Code § interpreted as application 26of U. S. C. judgment. Treasury regulation, I in the concur joins, O’Connor, with whom Justice Thomas Justice dissenting. plaintiffs respondents, unlike most that holds
The Court injury, suffering personal compensation after who secure alleged for pay recoveries discrimination on their must tax Rights Act of under Title Civil suits because seq., not in- et do 2000e amended, Stat. 78 Stat. says, because type rights.” so, the Court This “tort volve “Congress recompense plaintiffs declined to Title VII anything beyond wages properly Ante, due them.” agree. my I 241. cannot In view, the remedies available to plaintiffs right they Title VII do not fix the character of the purposes operation seek to enforce. of Title VII closely analogous similarity are law, to those of tort and that excludability should determine of recoveries for in- 104(a)(2). jury under 26 U. S. C. Section 104(a)(2)taxpayers gross
I allows to exclude from “damages personal injuries income received on ... account of properly or sickness.” The Court defers to an Internal Rev (IRS) regulation reasonably interprets enue Service “damages words received” to mean “an amount received . .. through prosecution legal upon of a suit or action based type rights, through agreement or tort a settlement en 1.104-1(c) prosecution.” tered into lieu of such 26 CFR (1991). ante, at 234; United Correll, States v. 389 U. S. respondents may gross Therefore, exclude from any they asserting income amount received as a result of type” right personal injury. “tort to recover for appears accept The Court that discrimination in workplace personal injury cognizable causes § 104(a)(2), ante, see at 239, and there can be little doubt point. about this Co., See Goodman v. Lukens Steel (1987)(“[R]acial 656, U. S. discrimination is a ... funda- rights person”); mental to the individual of a Price (1989) Hopkins, Waterhouse v. (O’Connor, (“[W]hatever concurring judgment) J., the final outcome process, of a decisional the inclusion of race or sex as a con- individual”). society sideration within it harms both and the disagree only holding I with the Court’s further that re- *18 spondents’ rights action did not assert tort-like because Con- gress plaintiffs. limited the remedies available to Title VII Focusing misapprehends on it remedies, me, seems to the §by reg- inquiry required and the
nature the IRS of question Title VII suits are based on whether ulation. The rights be as a tort claim must answered the same sort of type the statute and the of to the nature of with reference brought claim under it. employment actionable makes discrimination
Title VII arrangements regard between em- without to contractual operates Functionally, ployer employee. the law in the compensation for award traditional manner of torts: Courts right to be free from certain the invasions of a monetary workplace. damages suits, moreover, in tort Like purpose public be- of Title VII serves a relief for violations reasonably yond offsetting specific “It is the certain losses. spur backpay ‘providers] prospect the or cata- of a award lyst employers to self-examine and which causes and unions employment practices and to to self-evaluate their endeavor possible, vestiges [discrimi- eliminate, to so far as the last of Moody, Paper nation].’” Albemarle Co. v. (1975) (quoting Industries, States v. N. L. United (CA8 1973)).
Inc., 479 F. 2d fundamentally from lia-' a scheme differs contract Such bility, imposed by protection the law the which “is having promises single, interest, that of of oth- limited (4th 1971). performed.” Prosser, Law of Torts 5 ed. ers W. distinguishable quasi- liability Title also is from liability, prevention which “is created for the contractual unjust expense man another, enrichment of one good belong of benefits which in conscience restitution plaintiff.” Title Ibid. It is irrelevant for discriminatory employer profits practices; VII that an liability reassign purpose economic bene- is not rightful compensate employees owner, fits to their but through- injury they “eradicate] suffer and to discrimination economy.” supra, Paper, out the Albemarle at 421. statutory This causes of action for dis- Court has found analogous prior but occasions, crimination to tort suits on *19 suggested has not comparison that this specific turns on the monetary relief available. In Wilson Garcia, v. 471 U. S. (1985), we considered which state statute of limitations appropriately applied most brought to a claim under 42 § U. S. C. 1983. The question Court by answered this look ing § not to the plaintiff, remedies afforded a 1983 but to “the essence of the claim” and “the elements of the cause of greatest Id., action.” significance at 268. Of was the fact Congress designed Rights the Civil pro Act of 1871 to remedy vide a civil rights violations of constitutional postwar the Congress South. Because was concerned with “plainly harms that only sounded tort,” it remained for the Court comparison to select the best among from “a broad range potential analogies, property to infringements liberty.” of individual Id., at 277. In con cluding that the equivalent § closest state-law to a 1983suit personal is a tort injury, claim for the Court more once em phasized rights made enforceable under federal law: unifying
“The Rights theme of the Civil Act of 1871 is language reflected in the of the Fourteenth Amend- unequivocally ment that recognizes equal status of every ‘person’ subject jurisdiction any to the of several States. The Constitution’s command is that ‘persons’ all shall be accorded privileges the full citizenship A .... violation of that command is an rights person.” individual Ibid. (footnote omitted). When asked in Goodman supra, Lukens Steel Co., appropriate determine the analogue state to a suit under 42 U. again S. C. 1981, the Court rights pro- considered tected federal law rather recovery than the that could by plaintiff. be had As in Wilson, the tort-like nature of §a 1981claim was clear. See 482 S.,U. at 661. Accordingly, quickly the Court rejecting turned to the view that 1981 suits are more similar to tort actions for interference with injury. rights claims based on than to
contractual partially con- 1981 deals that while The Court noted barring “part law racial discrimina- a federal tracts, it is injury to the individual is a fundamental tion, which ... *20 person.” rights Moreover, the economic conse- Ibid. of a §1981 guaranteeing personal “flo[w] quences the economically activity significant right engage free from discriminatory The racially Id., at 661-662. interference.” analogous action limitations in a 1981 statute of most state injury governing personal Id., suits. therefore, one is, the at 662. rights suits analo- held federal civil and Goodman
Wilson gous personal actions not at all because rights plaintiffs, damages because fed- but to civil available inju- against personal protected tort-like individuals eral law injuri- being workplace no less in the Discrimination ries. rights by elsewhere, the asserted ous than discrimination just persons are as tort-like as the under Title VII who sue §§ brought by rights plaintiffs in actions under asserted and 1983.
II why respond- reasons offers three additional The Court it notes that First, be recoveries should taxed. ents’ have been received under Title VII would amounts awarded leaving wages discrimination, no if there had been as taxable failing impression would these recoveries to tax employment give a discrimination windfall. See victims of employment Affording victims of ante, at and n. 13. simply puts on an them benefit, however, this discrimination injury. footing For equal others who suffer damage taxpayer a example, “[i]f award for receives a personal, physical injury, which almost definition part if all or a from income even entire award is excluded recovery the income lost with reference to is determined injury.” Commissioner, 87 T. C. Threlkeld v. because of 1988). (CA6 (1986), I see no aff’d, 848 F. 2d 1294, 1300 inequity treating litigants plaintiffs Title VII like other personal injury. suffer who
Second, the Court unavailability intimates that jury plaintiffs trials to Title VII determining bears on the nature they bring. of the claim See ante, 240, 241, n. 12. Here, apparently the Court question assumes the answer to a we expressly have declined to address on recent occasions. See Lytle Mfg., (1990) v. Household Inc., 494 1n. (“This question Court has not ruled on the plain whether a seeking tiff relief under right Title VII jury has a to a [W]e express opinion trial.... here”); no on that issue Team Terry, sters v. 494 U. S. importantly, More explain the Court does not what availability relevance the jury question trials holds for the excludability 104(a)(2). suggestion is that Title VII recoveries are not excludable under employment this section because dis *21 equitable crimination suits are legal rather than in nature. Sparrow Cf. v. App. Commissioner, 292 U. S. D. C. 949 2d argument, F. That ignores very however, the regulation purports IRS apply. Court to Instead of con struing statutory “damages” term as a reference to the remedy traditionally available in actions at law, the IRS de “damages” fines to mean “an amount” through recovered prosecution “legal or settlement of a suit or action based upon type 1.104-1(c) tort rights.” (1991) 26 CFR added). (emphasis This inclusive definition renders the his torical of incidents “actions at law” equity” and “suits in ir proper relevant interpretation 104(a)(2). to the Finally, Congress Court asserts that fundamentally changed the nature of a Title VII suit when it enacted the Rights Civil Act of 1991, Pub. L. 102-166, 105 Stat. 1071. By authorizing compensatory punitive damages and in addi- backpay tion injunctive to suggests, relief, the Court Congress scope extended the beyond statute’s purely eco- nomic losses injury. to ante, at 241, n. 12. theory This odd on its face, for even before the 1991 more than discrimina much Title VII reached amendments protection employment. aspects The in the economic tion expansive, always extend been VII has afforded under Title “ ‘working inequality, just but also to ing to economic not heavily polluted discrimination as so environments destroy completely stability psychological
the emotional “‘demeaning minority and discon group workers’” employment. Bank, certing’” Meritor Sav. conditions (1986) Rogers (quoting 66, 67 Vinson, 477 S.U. FSB v. (CA5 1971), denied, cert. 2d EEOC, F. (CA11 (1972); 2d Dundee, 682 F. Henson v. 1982)). Congress’ VII, decision of Title the historic reach
Given naturally sug- comparably most broad remedies authorize existing penalties thought legislators insufficient gests that purposes. There is no need settled the law’s to effectuate conception Congress guess had a new whether Legislature reason for set out the mind, however. explaining that “additional itself, in the statute new remedies to deter unlawful are needed Federal law remedies under workplace.” in the discrimination and intentional harassment This authoritative 1071. §2, 105 Stat. 102-166, Pub. L. penalties principally to Congress new that added evidence contrary spec- goal VII, of Title an established effectuate guide our decision. ulation, should By resting Title VII and the remedies available on recently law, distinguishing version of amended today’s a narrow one. Neverthe- decision does make Court *22 a tort-like Title VII offers the view that less, I remain of employment to those who suffer cause of action Hopkins, 490 S., U. Price Waterhouse discrimination. See judgment). concurring For J., at 264-265 (O’Connor, respectfully I dissent. reason, this