Commissioner v. Schleier

PETITIONER: Commissioner
RESPONDENT: Schleier et al.
LOCATION: Schwegmann’s Grocery Store

DOCKET NO.: 94-500
DECIDED BY: Rehnquist Court (1986-2005)
LOWER COURT: United States Court of Appeals for the Fifth Circuit

CITATION: 515 US 323 (1995)
ARGUED: Mar 27, 1995
DECIDED: Jun 14, 1995

ADVOCATES:
Kent L. Jones - on behalf of the Petitioner
Thomas F. Joyce - on behalf of the Respondents

Facts of the case

Question

Media for Commissioner v. Schleier

Audio Transcription for Oral Argument - March 27, 1995 in Commissioner v. Schleier

Audio Transcription for Opinion Announcement - June 14, 1995 in Commissioner v. Schleier

William H. Rehnquist:

The opinion of the court in number 94-500 Commissioner of Internal Revenue versus Schleier will be announced by Justice Stevens.

John Paul Stevens:

As it evidence from the title of the case, this is a tax case.

The respondent is a former employee of Untied Airlines who along with pursuant to the policy of the company was discharged when he reach the age of 60.

He and other employees bought sued against United Airlines alleging that the termination has violated the Age Discrimination and Employment Act of 1967.

Eventually the case was settled and he received a $145000.00 half of which was attributed to back pay and half to so called liquidated damages.

The question in the case is whether he has to pay income tax on the recovery that turns on the further question whether the amount he received was ?damages received on account of personal injuries or sickness within the meaning of the Internal Revenue.?

The Courts of Appeals have divided on the question in this case the Court of Appeals for the Fifth Circuit held that the income was not taxable.

We granted certiorari to resolve the conflict and for reason stated in an opinion filed with the clerk today, we reverse the Court of Appeals and conclude he must pay income tax on both portions of the settlement.

Justice Scalia has concurred in the judgment.

Justice O'Connor has filed a dissenting opinion in which Justice Thomas has joined entirely in which Justice Souter has joined part II.