United States v. Burke, 504 U.S. 229, 17 (1992)

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Cite as: 504 U. S. 229 (1992)

Scalia, J., concurring in judgment

The question, then, is whether the settlement payments at issue in this case were "received . . . on account of personal injuries"—viz., "on account of" injuries to the recipients' physical or mental health—so as to qualify for exclusion under 104(a)(2). I think not. Though it is quite possible for a victim of race- or sex-based employment discrimination to suffer psychological harm, her entitlement to back-pay under Title VII does not depend on such a showing. Whether or not she has experienced the sort of disturbances to her mental health that the phrase "personal injuries" describes, a Title VII claimant is entitled to be "restor[ed] . . . to the wage and employment positio[n] [she] would have occupied absent the unlawful discrimination." Ante, at 239; see Albemarle Paper Co. v. Moody, 422 U. S. 405, 420-421 (1975) ("[G]iven a finding of unlawful discrimination, backpay should be denied only for reasons which, if applied generally, would not frustrate the central statutory purposes of eradicating discrimination throughout the economy . . ."). The only harm that Title VII dignifies with the status of redressable legal injury is the antecedent economic deprivation that produced the Title VII violation in the first place. See id., at 418 ("Title VII deals with legal injuries of an economic character . . ."). I thus conclude that respondents did not receive their settlement payments (in respect of backpay) "on account of personal injuries" within the meaning of 104(a)(2), and would reverse the judgment of the Court of Appeals.

It is true that the Secretary's current regulation, at least as it has been applied by the IRS, see n. 1, supra, contradicts the interpretation of the statute I have set forth above. But while agencies are bound by those regulations that are issued within the scope of their lawful discretion (at least until the regulations are modified or rescinded through appro-also psychological harm or disease; nevertheless, the amendment does not require the phrase unnaturally to be extended to injuries that affect neither mind nor body.

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