United States v. Burke
Decided on May 26, 1992; 504 US 229


I. ISSUES II. CASE SUMMARY III. AMICI CURIAE IV. DECISION V. WIN OR LOSS?
I. ISSUES:

A. Issues Discussed:  Civil rights (gender), Title VII of the Civil Rights Act of 1964, federal taxation

B. Legal Question Presented: 

Does the Tax Code include awards related to discrimination ("Title VII award") as gross income when it specifically excludes awards related to personal injury?
II. CASE SUMMARY:

A. Background:

A federally-created corporation paid backpay to affected employees pursuant to a settlement for sex discrimination (a "Title VII award"), including to Respondents, but withheld federal taxes. When Respondents' claimed a refund of the withheld taxes the IRS denied their claims. In a subsequent refund action, the District Court ruled that, since Respondents had obtained only backpay due them as a result of discriminatory underpayments rather than compensatory or other damages, the settlement proceeds could not be excluded from their gross incomes under federal statute. The Court of Appeals reversed the ruling, holding that discrimination constituted a personal, tort-like injury to Respondents, and rejected the Government’s attempt to distinguish Title VII, which authorizes no compensatory or punitive damages from other statutes thought to redress personal injuries.

On appeal the United States Supreme Court granted certiorari.
B. Counsel of Record:
ACLU Side
(Respondent/Appellee)
Opposing Side
(Petitioner/Appellant)
Joseph E. Finley argued the cause for respondents. With him on the brief was Lucinda M. Finley. Jeffrey P. Minear argued the cause for the United States. On the briefs were Solicitor General Starr, Assistant Attorney General Peterson, Deputy Solicitor General Wallace, and Kent L. Jones, Ann Belanger Durney, and Bruce R. Ellisen.
C. The Arguments:
ACLU Side
(Respondent/Appellee)
Opposing Side
(Petitioner/Appellant)
Unavailable Unavailable
III. AMICI CURIAE:
ACLU Side
(Respondent/Appellee)
Opposing Side
(Petitioner/Appellant)
Briefs of amici curiae urging affirmance were filed for the American Association of Retired Persons (AARP) by Steven S. Zaleznick, Cathy Ventrell-Monsees, Raymond C. Fay, and Thomas F. Joyce; for the American Civil Liberties Union, et al., by C. Cabell Chinnis, Jr., Alison C. Wetherfield, Martha F. Davis, Steven R. Shapiro, Isabelle Katz Pinzler, Julius L. Chambers, and Charles Stephen Ralston; for the Equal Employment Advisory Council by Robert E. Williams and Douglas S. McDowell; for Equal Rights Advocates, Inc., by Stephen V. Bomse, Nancy L. Davis, and Maria Blanco; for Women Employed, et al., by Michael B. Erp, Mary K. O'Melveny, and Stephen G. Seliger; for the National Employment Lawyers Association by Robert B. Fitzpatrick; and for the National Women's Law Center by Walter J. Rockler. Raymond C. Fay, Alan M. Serwer, and Thomas F. Joyce filed a brief for the United Airlines Pilot Group as amicus curiae.
 IV. THE SUPREME COURT'S DECISION:

"In order to come within the §104(a)(2) [Tax Code] income exclusion, respondents therefore must show that Title VII, the legal basis for their recovery of backpay, redresses a tort-like personal injury…

It is beyond question that discrimination in employment on the basis of sex, race, or any of the other classifications protected by Title VII is, as respondents argue and this Court consistently has held, an invidious practice that causes grave harm to its victims... The fact that employment discrimination causes harm to individuals does not automatically imply, however, that there exists a tort-like ‘personal injury’ for purposes of federal income tax law.

Indeed, in contrast to the tort remedies for physical and nonphysical injuries discussed above, Title VII does not allow awards for compensatory or punitive damages; instead, it limits available remedies to backpay, injunctions, and other equitable relief...

Notwithstanding a common-law tradition of broad tort damages and the existence of other federal antidiscrimination statutes offering similarly broad remedies, Congress declined to recompense Title VII plaintiffs for anything beyond the wages properly due them - wages that, if paid in the ordinary course, would have been fully taxable... Thus, we cannot say that a statute such as Title VII, whose sole remedial focus is the award of back wages, redresses a tort-like personal injury within the meaning of § 104(a)(2) and the applicable regulations."

Held: The judgment of the Court of Appeals is reversed.
Justice Vote: 2 Pro vs. 7 Con

  • Blackmun, H. Pro (Wrote majority opinion)
  • Rehnquist, W. Pro (Joined majority opinion)
  • White, B. Pro (Joined majority opinion)
  • Stevens, J. Pro (Joined majority opinion)
  • Kennedy, A. Pro (Joined majority opinion)
  • Souter, D. Pro (Joined majority opinion) 
  • Scalia, A. Pro (Joined majority opinion)
  • O'Connor, S. Con (Wrote dissenting opinion)
  • Thomas, C. Con (Joined minority opinion, joined Blackmun's dissent)
V. A WIN OR LOSS FOR THE ACLU?

The ACLU filed as amicus urging affirmance; The United States Supreme Court reversed the lower court's ruling in a 7-2 vote, giving the ACLU an apparent loss.