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lawsuit was governed by the 1991 amendments to the Civil Rights
Act.3
Any uncertainty about the significance in discrimination
cases of the 1991 amendments to the Civil Rights Act was laid to
rest by the Supreme Court’s opinion in Commissioner v. Schleier,
515 U.S. 323 (1995), published June 14, 1995. Schleier held that
awards under the Age Discrimination in Employment Act (ADEA) were
taxable not only because the ADEA, like the pre-1991 version of
the Civil Rights Act, does not satisfy the requirement of tort-
like injury, but also because the claim must be “on account of
personal injuries or sickness”, and that termination on account
of age could not “fairly be described as a ‘personal injury’ or
‘sickness.’” Id. at 330. Thus, the second ground of Schleier
3 If respondent accepted petitioner’s argument to this
effect, relying on the holding of the Court of Appeals for the
Ninth Circuit in Davis v. City of San Francisco, 976 F.2d 1536
(9th Cir. 1992) (cited by petitioner’s counsel in his memo of
April 8, 1994), that the provisions of the Civil Rights Act of
1991, Pub. L. 90-202, 81 Stat. 602, governing expert witness fees
applied retroactively, it turned out that respondent was
mistaken. The amendments made by the Civil Rights Act of 1991,
which provided for additional relief of compensatory and punitive
damages as well as back pay, and for a jury trial, were
subsequently held not to apply retroactively. See Landgraf v.
USI Films Prods., 511 U.S. 244, 249, 256, 286 (1994). Thus,
respondent should have considered petitioner’s claim in the light
of the pre-1991 version of the Act under which she made claim,
which arose in 1977. See Clark v. Commissioner, T.C. Memo. 1997-
156. Since United States v. Burke, 504 U.S. 229 (1992), held
that sec. 104(a)(2) did not apply to a settlement award under
Title VII of the 1964 Act, Burke was governing authority for
inclusion of petitioner’s settlement in gross income.
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