## Facts

- The EEOC sued the Federal Reserve Bank of Richmond’s Charlotte branch under Title VII, alleging race discrimination in promotions.
- Several Black employees intervened, asserting Title VII and 42 U.S.C. § 1981 claims and seeking to represent a class.
- The district court certified a class of Black employees allegedly discriminated against in promotions, wages, job assignments, and other employment terms since January 3, 1974.
- After trial, the district court found a pattern and practice of racial discrimination in certain specified pay grades, but not as to employees above those grades, and found discrimination against two named intervenors individually.
- Other class members (the “Baxter petitioners”) received notice, did not opt out, and testified at trial; after judgment, they sought to intervene but were denied.
- The Baxter petitioners then filed a separate § 1981 action alleging they were individually denied promotions because of race.
- The Fourth Circuit reversed the class judgment on the merits and held the class judgment precluded the Baxter petitioners’ separate individual suits under res judicata.
- The Supreme Court granted review limited to the preclusion ruling.

## Issues

1. Whether a class action judgment rejecting a class-wide “pattern or practice” discrimination theory precludes class members from later bringing individual discrimination claims based on specific employment decisions.
2. Whether res judicata (and related issue-preclusion principles) barred the Baxter petitioners’ subsequent § 1981 promotion-denial claims.

## Decision

- The Supreme Court reversed and remanded, holding the Baxter petitioners were not precluded from maintaining their separate § 1981 action.
- The Court distinguished a class-wide pattern-or-practice claim from individual disparate-treatment claims, which require proof tied to specific decisions and motives.
- The Court held the class judgment bound class members only on matters actually litigated and determined in the class case; the prior case did not adjudicate the Baxter petitioners’ individual promotion-denial claims.
- The Court acknowledged the class judgment could preclude relitigation of the class-wide pattern-or-practice issue for the same period, but not individualized claims not decided.

## Legal Principles

- Claim and issue preclusion from a class action judgment extend only to claims and issues that were within the class proceeding’s scope and were actually litigated and determined.
- A finding that an employer did not engage in a class-wide pattern or practice of discrimination does not, by itself, resolve whether discrete acts of intentional discrimination occurred in particular employment decisions.
- Class actions primarily resolve common questions; absent litigation and determination of individualized adverse actions and intent, class members may later pursue individual discrimination claims consistent with preclusion limits.

## Conclusion

A class-wide loss on a pattern-or-practice theory bars class members from relitigating that class-wide issue, but it does not automatically bar later individual discrimination suits based on specific promotion decisions and individualized proof when those claims were not adjudicated in the class action.


Cooper v. Fed. Rsrv. Bank of Richmond, 467 U.S. 867 (1984)