1993 U.S. Tax Ct. LEXIS 10">*10 Decisions will be entered for respondent as to the deficiencies in tax and for petitioners as to the addition to tax.
Ps were awarded damages of $ 995,000 in a Michigan wrongful death action and D appealed. After exhausting its appeals, D paid Ps $ 2,254,741.70, which was the sum of the damages, $ 6,134.53 in costs, and $ 1,253,607.17 in statutory interest.
100 T.C. 124">*125 OPINION
RUWE,
Addition to Tax | ||
Petitioner | Deficiency | Sec. 6661 |
Rosemary S. Kovacs | $ 220,572 | $ 55,143 |
Lois E. Kovacs | 34,992 | 8,748 |
Mary Ann Kovacs | 33,103 | 8,276 |
Kathleen L. Kovacs | 30,184 | 7,546 |
1993 U.S. Tax Ct. LEXIS 10">*11 Respondent has conceded the additions to tax under section 6661. 2
The primary issue remaining for decision is whether "interest", which petitioners received pursuant to Michigan Compiled Laws (M.C.L.)
Petitioners resided in Fowlerville, Michigan, when they filed the petitions in this case.
The parties submitted this case fully stipulated pursuant to Rule 122. The stipulation of facts and attached exhibits are incorporated herein by this reference.
Rosemary S. Kovacs is the widow of Charles L. Kovacs, who was killed in 1976 when the truck that he was driving was1993 U.S. Tax Ct. LEXIS 10">*12 struck by a locomotive operated by the Chesapeake & Ohio Railroad Co. (C & O). On September 25, 1978, Mrs. Kovacs, as administratrix of her husband's estate, filed a complaint in the Livingston County Circuit Court against C & O and others in accordance with
On May 28, 1982, a Livingston County Circuit Court jury delivered a verdict in favor of Mrs. Kovacs, awarding damages100 T.C. 124">*126 in the amount of $ 1,500,000, later reduced to $ 995,000. 3 The Michigan Court of Appeals affirmed, as did the Michigan Supreme Court.
On March 17, 1993 U.S. Tax Ct. LEXIS 10">*13 1987, C & O issued a check in the amount of $ 2,254,741.70, payable to Rosemary Kovacs, administratrix of the estate of Charles L. Kovacs, deceased, and C. Robert Beltz, her attorney. The check for $ 2,254,741.70 was full payment for damages in the amount of $ 995,000, $ 6,134.53 in costs advanced, and $ 1,253,607.17 in interest on the damages, pursuant to
By order of the trial court, Mrs. Kovacs received 66-2/3 percent from the net proceeds and her daughters, Lois, Mary Ann, and Kathleen, each received 11-1/9 percent. The total award of $ 2,254,741.70 was disbursed as follows:
Attorney's fees | $ 749,535.72 |
Costs advanced | 6,134.53 |
Rosemary S. Kovacs | 999,380.96 |
Mary Ann Kovacs | 166,563.50 |
Lois Elizabeth Kovacs | 166,563.50 |
Rosemary S. Kovacs, conservator | |
of the Estate of Kathleen L. | |
Kovacs, a minor | 166,563.50 |
Petitioners did not report any part of the amounts received on their 1987 Federal income tax returns, nor did they deduct any part of the attorney's fees. Respondent determined that1993 U.S. Tax Ct. LEXIS 10">*14 petitioners should have included the interest portion of the award in gross income. Respondent allocated the interest among the recipients in proportion to the percentages in the trial court's order. Respondent also determined that, under section 212(1), petitioners were entitled to miscellaneous itemized deductions, subject to the 2-percent floor provided by section 67, for attorney's fees attributable to the interest portion of the award. Respondent allocated the100 T.C. 124">*127 amounts of interest income and deductions for attorney's fees, after taking into account the 2-percent floor, as follows:
Interest | ||
Income | Attorney's Fees | |
Rosemary S. Kovacs | $ 835,730 | $ 260,961.16 |
Mary Ann Kovacs | 139,290 | 43,448.67 |
Lois E. Kovacs | 139,290 | 43,251.67 |
Kathleen L. Kovacs | 139,290 | 43,637.67 |
Totals | $ 1,253,600 | $ 391,299.17 |
Petitioners filed a timely petition with this Court.
the amount of any
1993 U.S. Tax Ct. LEXIS 10">*16
For damages to be excludable under
Petitioners take the position that the term "damages" in
There is no more persuasive evidence of the purpose of a statute than the words which the legislature used to give expression to its wishes.
1993 U.S. Tax Ct. LEXIS 10">*20 We last analyzed this issue in
This issue first arose in
We have found no cases since
The relevant statutory and case law in Michigan is consistent with our holding. The claim underlying petitioners' interest award was brought under
100 T.C. 124">*131 reasonable medical, hospital, funeral, and burial expenses for which the estate is liable; reasonable compensation for the pain and suffering, while conscious, undergone by the deceased person during the period intervening between the time of the injury and death; and damages for the loss of financial support and the loss of the society and companionship of the deceased. * * * [
Petitioners received their interest pursuant to
1993 U.S. Tax Ct. LEXIS 10">*27 100 T.C. 124">*132 Finally, petitioners argue that the Periodic Payment Settlement Act of 1982, Pub. L. 97-473, section 101, 96 Stat. 2605, supports their position that interest is excludable under
1993 U.S. Tax Ct. LEXIS 10">*28 The legislative history indicates that the limited purpose of the Periodic Payment Settlement Act of 1982 was to "provide statutory certainty" for the exclusion of "damages" that are paid in "periodic payments." S. Rept. 97-646 (1982),
where * * * Congress adopts a new law incorporating sections of a prior law, Congress normally can be presumed to have had knowledge of the interpretation given to the incorporated law, at least insofar as it affects the new statute. [
1993 U.S. Tax Ct. LEXIS 10">*30
The parties have agreed that if we hold that petitioners' interest award is includable in income, the attorney's fees attributable to interest are deductible under section 212(1). 15 Because we have held that the interest is includable in income, petitioners will be allowed to deduct the portion of their attorney's fees attributable to interest.
1993 U.S. Tax Ct. LEXIS 10">*31 100 T.C. 124">*134
HAMBLEN, PARKER, SHIELDS, COHEN, CLAPP, SWIFT, GERBER, WRIGHT, PARR, WELLS, CHIECHI, AND LARO,
JACOBS,
CHABOT,
HALPERN,
The legislative history of the 1982 amendment makes it crystal clear that the exclusion for periodic payments of damages on account of personal injuries is not limited to the present value of such periodic payments. Periodic payments --
1993 U.S. Tax Ct. LEXIS 10">*33
The legislative history of the 1982 amendment states that the amendment was intended to codify, rather than change, present law:
The bill specifically provides that the Code
S. Rept. 97-646 (1982),
Once it is understood that the 1982 amendment stands for the proposition that, with regard to periodic payments, the time value of money is to be disregarded, then the only remaining question is whether Congress intended any different result with regard to lump-sum payments. I believe that it did not and, consequently, whether payments are made periodically or in a lump sum, time value of money considerations are to be disregarded in determining the taxability of amounts received under
The revenue rulings cited in the legislative1993 U.S. Tax Ct. LEXIS 10">*36 history of the 1982 amendment are of little help in resolving the question, their analysis being mostly conclusory and illustrating well only how to avoid receipt (for tax purposes) of the present value of the expected future payments. Certainly, the rule of exclusion for periodic payments is not limited to the three situations cited as illustrative of present law. Indeed, it appears indisputable that those examples are merely illustrative of some broader rationale on the part of Congress. The breadth of that rationale, however, is unclear. I perceive no persuasive evidence to explain Congress' distinguishing between lump-sum and periodic payments, as the majority suggests.
Congress, one might hypothesize, may have been concerned that a taxpayer accepting a periodic payment arrangement had accepted the credit risk that even the present value of the expected periodic payments would not be received.
I have no quarrel with the majority's distinction between a principal sum and interest. Majority op. p. 8. That distinction, however, appears to be irrelevant when dealing with damages received, whether by suit or agreement and whether as a lump-sum or periodic payment, on account of personal injuries. For purposes of
100 T.C. 124">*138
Judge Beghe also dissents from the opinion of the majority. Of course, I agree with Judge Beghe to the extent that he would exclude the entirety of petitioners' recovery based on the 1982 amendment. Beghe op. p. 45-47. I also agree with his rejection of application of the so called "reenactment doctrine" to this case.
Unlike Judge Beghe, I do not read
Notwithstanding1993 U.S. Tax Ct. LEXIS 10">*40 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.
100 T.C. 124">*139 Accordingly, we hold that the backpay awards received by respondents in settlement of their Title VII claims are not excludable from gross income as "damages received . . . on account of personal injuries" under
1993 U.S. Tax Ct. LEXIS 10">*41 I therefore would hold that
Nevertheless, I am prepared to agree with Judge Beghe that the interest at issue constitutes "damages" within the meaning of
100 T.C. 124">*140 WHALEN,
BEGHE,
I.
A.
The way to get into this case is to observe that, on February 3, 1987, the Michigan Supreme Court, the State court of last resort, denied the C & O's motion for a rehearing. Prior thereto, petitioners had no legal right to recover on their claims, but on that date the judgment against the C & O in favor of petitioners became final, and petitioners' entire claim for damages, including statutory interest, was liquidated and became an indebtedness of the C & O to petitioners.
Petitioners argue that the "prejudgment interest" accruing to February 3, 1987, is part of the damages excludable from gross income under
I agree with petitioners that the statutory interest accruing to February 3, 1987, or "prejudgment interest", should be100 T.C. 124">*142 treated as part of the damages received on account of Mr. Kovacs' wrongful death. 12 Although a time value of money element inheres in both prejudgment and postjudgment interest, there is a long history of legal precedent that treats prejudgment interest on an unliquidated claim as part of the damages received on account of the injury that gave rise to the claim and the resulting right to receive such damages, see McCormick, Handbook on the Law of Damages, sec. 50, at 205 (1935), whereas postjudgment interest is considered interest eo nomine ("by that name"), Dobbs, Law of Remedies, sec. 3.5, at 164 (1973), because it accrues on an indebtedness that has been fixed by final court order.
1993 U.S. Tax Ct. LEXIS 10">*48 Interest has been generally defined as the compensation allowed by law or fixed by the parties for the use or forbearance of money. See Black's Law Dictionary 812 (6th ed. 1990). While this definition applies to most types of interest, it fails to capture the nature of interest on damages arising from noncontractual claims. As Professor McCormick stated in his often-cited treatise on the law of damages: "This definition * * * is defective in ignoring interest allowed as compensation for delay in satisfying unliquidated claims." McCormick,
1993 U.S. Tax Ct. LEXIS 10">*49 Professor McCormick showed that there is an historical distinction between "'conventional' or promised interest, on the one hand, and interest
1993 U.S. Tax Ct. LEXIS 10">*50 B.
To determine properly the income tax character of the amount awarded under
C.
In
1993 U.S. Tax Ct. LEXIS 10">*53 Unlike conventional interest on indebtedness, prejudgment interest as damages takes its character from the originating claim; in this case a claim for physical personal injuries. In100 T.C. 124">*145
In
In
The majority conclude, majority op. p. 8, that none of the interest portion of the award can be treated as damages because it serves a purpose fundamentally different from the underlying damages -- compensating petitioners for the C & O's delay in payment. However, this overemphasizes the time value of money aspect of the recovery. The regulation under
The term "damages received (whether by suit or agreement)" means an
This regulation covers all amounts received and does1993 U.S. Tax Ct. LEXIS 10">*57 not distinguish among the component parts of an award received by a plaintiff in a tort action, such as lost future earnings, medical and funeral expenses, pain and suffering, loss of companionship, etc., or interest. Instead, the regulation focuses on the nature of the underlying claim. Once it is found that the personal injury claim is tort or tortlike, all amounts received from the defendant and its insurer through the prosecution of the claim are excluded from gross income. See
As the majority recognize, majority op. p. 6, petitioners' wrongful death claim against the C & O was for personal injuries and sounded in tort. Consequently, under the Code and regulations, any amount petitioners received on account of that claim was "damages" for such personal injuries within the meaning of
D.
The majority state, majority op. pp. 11-12, that, under Michigan law, statutory interest is not an element of damages and therefore must be treated differently1993 U.S. Tax Ct. LEXIS 10">*59 from interest awarded as an element of damages. As support for this argument, the majority cite
The majority's reliance on
Although the Michigan Court of Appeals, in
According to the majority, "petitioners' right to 'damages' for wrongful 1993 U.S. Tax Ct. LEXIS 10">*61 death stems solely from, and is limited to, what is provided by
reasonable medical, hospital, funeral, and burial expenses for which the estate is liable; reasonable compensation for the pain and suffering, while conscious, undergone by the deceased person during the period intervening between the time of the injury and death; and damages for the loss of financial support and the loss of the society and companionship of the deceased. * * * [
The statute also provides that "the court or jury may award damages as the court or jury shall consider fair and equitable".
There is nothing in subsection 6 of the Michigan Wrongful Death Act that prohibits a Michigan court or jury from including an interest (time value of money) element in its100 T.C. 124">*149 verdict, so long as it's "fair and equitable". 1993 U.S. Tax Ct. LEXIS 10">*62 The indented language quoted above simply provides what must be included in the damages for wrongful death; it does not limit the damage award to those amounts or prohibit what may be included in addition to them. Moreover, the Michigan Supreme Court did not say anything in
1993 U.S. Tax Ct. LEXIS 10">*63 In
The majority correctly observe that statutory interest is awarded under a separate statute from the basic wrongful death damages. Majority op. pp. 11-12. However, that does not dispose of the question before us. The statute providing for interest on damages,
The majority point out that statutory interest is calculated on and added to the judgment. Majority op. pp. 11-12. In Michigan, when a plaintiff obtains a money judgment in any civil action, the plaintiff is automatically entitled to receive interest on the judgment under
E.
The approach the Court should take in the case is consistent with the legislative purposes of
1993 U.S. Tax Ct. LEXIS 10">*67 Another view is that the exclusion of personal damages is grounded in compassion for the victim. That is, "taxation of recoveries carved from pain and suffering is offensive, and the victim is more to be pitied rather than taxed." Harnett, "Torts and Taxes",
1993 U.S. Tax Ct. LEXIS 10">*68 1.
1993 U.S. Tax Ct. LEXIS 10">*69 In addition, victims of personal injury who settle their claims may exclude from gross income amounts that the parties take account of as interest yet characterize as damages in their settlement agreement. See
1993 U.S. Tax Ct. LEXIS 10">*71 100 T.C. 124">*153 Just as there is no reason to distinguish between damages and interest received by settlement and damages and prejudgment interest received by verdict, there is no reason to distinguish between interest when it is received in a lump sum or in periodic payments. The jurisprudence of this Court and Congress' 1982 amendment to
2.
1993 U.S. Tax Ct. LEXIS 10">*73 3.
1993 U.S. Tax Ct. LEXIS 10">*75 Nor should the doctrine of "reenactment" referred to by the majority, majority op. p. 10, impede us from properly deciding this case. There is no valid reason to believe that Congress reenacted the Board of Tax Appeals' decision in
Even if the majority properly read
It is urged that re-enactment of
1993 U.S. Tax Ct. LEXIS 10">*77 The long-standing judicial view of this subject is, if anything, contrary to the majority's reading of
the "interest" was included in the judgment as part of just compensation for damages sustained. * * * Here, the stipulation denominated the sum of $ 84,531.73 as the "amount received for damages measured by interest" and in its opinion the Court of Claims stated: "The plaintiff is entitled to interest, as has been said, because such allowance is 'rightful' and is necessary adequately to compensate it for the damage." * * * Here the obligation of the United States is to make just compensation for the unlawful detention of the vessel. Just compensation for the damage so suffered requires that the party damaged be made whole. An integral part of a payment for such purpose is interest covering the period of detention. In such a case it is merely a convenient method of measuring the amount of one of the factors of damage. It is not a separable item of interest on an obligation. [
F.
In reaching our conclusion in
Absent
G.
1993 U.S. Tax Ct. LEXIS 10">*82 Insofar as
II. 1993 U.S. Tax Ct. LEXIS 10">*85
As the majority point out, the parties have agreed that if the interest portion of the award is includable in gross income, the attorney's fees allocable to the taxable interest are deductible under section 212(1). As a result, the deductible portion of the attorney's fees is not deductible "above the line" in arriving at adjusted gross income, and is subject to the 2-percent floor of section 67 because section 212(1) deductions are not among the "above the line" deductions enumerated in section 62.
Following respondent's lead, the majority cite
Total Attorney's Fees x Nonexempt Income / Total Award = Deductible Fees
Petitioners did not argue this issue other than to preserve the point that, 1993 U.S. Tax Ct. LEXIS 10">*86 if any part of the interest should be held taxable, the attorney's fees allocable thereto would be deductible.
Although it might initially appear that the proper allocation of the attorney's fees is a cut-and-dried proposition, some aspects of the question do deserve further attention. It is not self-evident that a pro rata apportionment should be used to compute the deductible interest.
Petitioners' contingent fee agreement with the attorneys who represented them in the wrongful death action is not part of the stipulated record in this case. We do know that the total award of $ 2,254,741.70 was disbursed as follows:
Attorney's Fees | $ 749,535.72 |
Costs | 6,134.53 |
Petitioners' Receipts (Gross) | 1,499,071.45 |
Total | $2,254,741.70 |
It is clear that the agreed attorney's fees were one-third (33-1/3 percent) of the gross award, as it had been reduced by costs:
Gross Award | $ 2,254,741.70 |
Less: Costs | 6,134.53 |
Net Award before Fees | 3)2,248,607.17 |
Attorney's Fees | $ 749,535.72 |
At first blush, this computation would seem to confirm that a pro rata
First, the fact that the attorney's contingent fee agreement did not differentiate between basic damages and statutory100 T.C. 124">*160 interest in computing the fee reinforces my view (expressed in Part I) that statutory interest on the basic damages is part of the damages for the purposes of the
Second, the pro rata
Authority for total disallowance of the deduction is found in the treatment of attorney's fees paid to obtain condemnation awards. Inasmuch as the majority rely on
Petitioners' attorney's fees were for services in1993 U.S. Tax Ct. LEXIS 10">*89 connection with obtaining the jury award. Interest on the jury award accrued as a matter of right so that it cannot be said that the attorney's services made any direct contribution to the interest element. Thus there is no basis for allocating any part of the fee to the collection of interest.
100 T.C. 124">*161 Our views on the treatment of attorney's fees in condemnation awards are at variance with our views on their treatment in personal injury actions. The views expressed in
Irrespective of whether the amount taxable is the postjudgment interest (approximately $ 30,000, see
1993 U.S. Tax Ct. LEXIS 10">*92 In conclusion, I would hold: (I) That the prejudgment interest portion of the award is excluded from gross income under
COLVIN,
1. Cases of the following petitioners are consolidated herewith: Lois E. Kovacs, docket No. 5618-90; Mary Ann Kovacs, docket No. 5619-90; and Kathleen L. Kovacs, docket No. 5620-90.↩
2. Unless otherwise indicated, all section references are to the Internal Revenue Code in effect for the year in issue, and all Rule references are to the Tax Court Rules of Practice and Procedure. ↩
3. The original verdict of $ 1,500,000 was reduced one-third due to Charles L. Kovacs' contributory negligence and further reduced by $ 5,000 for an amount previously paid by the Board of Road Commissioners for the County of Livingston to settle claims against the board.↩
4. Michigan Compiled Laws (M.C.L.)
(1) Interest shall be allowed on a money judgment recovered in a civil action, as provided in this section * * *
(2) For complaints filed before June 1, 1980, in an action involving other than a written instrument having a rate of interest exceeding 6% per year, the interest on the judgment shall be calculated from the date of filing the complaint to June 1, 1980, at the rate of 6% per year and on and after June 1, 1980, to the date of satisfaction of the judgment at the rate of 12% per year compounded annually.↩
5. See also
6. Cf.
7. The Revenue Act of 1928, ch. 852,
Amounts received, through accident or health insurance or under workmen's compensation acts, as compensation for personal injuries or sickness, plus the amount of any damages received whether by suit or agreement on account of such injuries or sickness;↩
8. Cf.
9. See Periodic Payment Settlement Act of 1982, Pub. L. 97-473, sec. 101(a), 96 Stat. 2605;
10. See also
11. Under the Michigan statute, interest is awarded as a matter of right upon entry of the judgment at a specified rate regardless of the type of claim or the importance of any element thereof. See
12. Historically, judges and commentators have debated over whether interest constitutes an award "in the nature of damages". See 25 C.J.S., Damages, sec. 51 (1966), and cases cited therein. The historically debated status of interest shows, at a minimum, that it has always been recognized as a concept with its own identity distinct from "damages".
To permit an award of interest it is necessary that the claim for damages shall represent a pecuniary loss which is susceptible of computation with reasonable certainty, or by means of established market values or other generally recognized standards. [25 C.J.S., Damages, sec. 51, at 790 (1966)].
The cases in Michigan make clear that statutory interest computed from the date of filing a claim until payment pursuant to
13. The Periodic Payment Settlement Act of 1982, Pub. L. 97-473, sec. 101, 96 Stat. 2605, amended
14. The legislative history cites four prior revenue rulings dealing with settlements of personal injury claims. See S. Rept. 97-646 (1982),
15. Attorney's fees attributable to the damages excludable from income are not deductible. Sec. 265(a);
16. In
Total Attorney's Fees X Nonexempt Income / Total Award = Deductible Fees ↩
1. Judge Beghe↩, in his dissent,informs us that petitioners have conceded the taxability of certain "postjudgment" interest. I would limit my holding for petitioners to "prejudgement" interest, saving the question of "postjudgment" interest for another day.
2. The Court relied in part on
1.
2.
3.
4.
5. Of
6.
7. Opposed to the thrust of each such maxim or canon of construction is a parry or counterthrust. See Llewellyn, The Common Law Tradition: Deciding Appeals, 521-535 (1960);
8.
9. See, e.g.,
10. The thrust of Judge Halpern's dissent is that petitioners' concession should be disregarded and that, for cash basis taxpayers such as petitioners, the entire award received by them is entitled to exclusion under
11. Petitioners have not provided a computation of the taxable amount, but, at the 12-percent compounded rate under Mich. Comp. Laws (M.C.L.)
12. The trial court had awarded statutory interest under
13. Although Professor McCormick's treatise on the law of damages has remained unchanged since its publication in 1935, it continues to be cited as one of the leading authorities on the subject, particularly with reference to its exposition of the history of interest as an element of damages. See, e.g.,
14. See
15. The majority rule at common law was that prejudgment interest was not allowed on personal injury claims, at least with respect to pain and suffering and other nonfinancial harms. 4
Be that as it may, the Michigan statutory system for interest now applies to all types of claims without any distinction between contractual and noncontractual claims, and between pecuniary harms and other types of injury.
16. Subject, of course, to the current restrictions on the deductibility of personal interest under sec. 163(h) and the economic performance requirements under sec. 461(h).↩
17. This is consistent with respondent's view that dividends on restricted stock that is not substantially vested under sec. 83, as to which the employee-stockholder has not made a sec. 83(b) election, are treated as compensation and not as dividend income. See
18.
19.
20. As the majority observe, wrongful death is a purely statutory tort unknown at common law, majority op. p. 11. Prosser & Keeton, Law of Torts, sec. 127, at 945-947 (5th ed. 1984).↩
21. The exclusion for damages received on account of personal injuries or sickness first appeared in the Revenue Act of 1918, ch. 18, sec. 213(b)(6), 40 Stat. 1057, 1066.↩
22. The human capital justification for
23. The compassion justification has also been criticized on the ground that there is nothing in the legislative history of
24.
25. In
26. It might be argued that there is a public policy reason for favoring settlements by providing personal injury plaintiffs who settle with more favorable tax consequences than if they pursue their claims to final judgment. Insofar as this tax case is concerned, however, it could be improper for us to be distracted by what is essentially a local law consideration that already appears to have been adequately taken care of by the Michigan statute. The Michigan statute providing for judgment interest already has built-in provisions that are designed in a more discriminating way to favor settlement and to discourage parties who reject reasonable settlements and hold out for final judgment on the merits.
27. For a similar analysis that arrives at a contrary conclusion, see Abreu, "Distinguishing Interest from Damages: A Proposal For a New Perspective",
28. A current example of the administrative application and extension of the compassion approach is the pending proposal to allow terminally ill beneficiaries (such as AIDS victims) of life insurance policies to draw down the proceeds free of income tax.
29. Although our decision in
30. In
the fact that a comprehensive reexamination and significant amendment of the CEA left intact the statutory provisions under which the federal courts had implied a cause of action is itself evidence that Congress affirmatively intended to preserve that remedy. A review of the legislative history of the statute persuasively indicates that preservation of the remedy was indeed what Congress actually intended. [Fn. ref. omitted.]
Although Congress is presumed to be aware of judicial interpretations of a statute and to adopt them when it reenacts a statute without change, see
31. See also
32. But see
33. Petitioners ask us to distinguish
34. In
35. Inasmuch as punitive damages are much more speculative, and subject to attack on appeal, it might be reasonable to expect that it was the punitive damages that were reduced by agreement of the parties in a post-trial pre-appeal settlement. But see
36.