Cooper v. Federal Reserve Bank of Richmond, 83-185

• Decision Date: 25 June 1984
• Docket Number: No. 83-185,83-185
• Parties: Sylvia COOPER, et al., Petitioners v. FEDERAL RESERVE BANK OF RICHMOND
• Court: U.S. Supreme Court

467 U.S. 867

104 S.Ct. 2794

81 L.Ed.2d 718

Sylvia COOPER, et al., Petitioners

v FEDERAL RESERVE BANK OF RICHMOND.

No. 83-185.

Supreme Court of the United State

Argued March 19, 1984.

Decided June 25, 1984.

Syllabus

The Equal Employment Opportunity Commission brought an action in Federal District Court against respondent Federal Reserve Bank, alleging that one of respondent's branches (the Bank) violated § 703(a) of Title VII of the Civil Rights Act of 1964 by engaging in employment discrimination based on race during a specified time period. Subsequently, four of the Bank's employees (the Cooper petitioners) were allowed to intervene as plaintiffs, and they alleged that the Bank's employment practices violated 42 U.S.C. § 1981, as well as Title VII, and that they could adequately represent a class of black employees against whom the Bank had discriminated. The District Court then certified the class pursuant to Federal Rules of Civil Procedure 23(b)(2) and (3), and ordered that notice be given to the class members. Among the recipients of the notice were the Baxter petitioners. At the trial both the Cooper petitioners and the Baxter petitioners testified, and the District Court held that the Bank had engaged in a pattern and practice of racial discrimination with respect to employees in certain specified pay grades but not with respect to employees above those grades, and found that the Bank had discriminated against two of the Cooper petitioners but not against the others. Thereafter, the Baxter petitioners moved to intervene, but the District Court denied the motion on the ground, as to one petitioner, that since she was a member of the class to which relief had been ordered, her rights would be protected in the later relief stage of the proceedings, and, as to the other petitioners, on the ground that they were employed in jobs above the specified grades for which relief would be granted. These latter Baxter petitioners then filed a separate action against the Bank in the District Court, alleging that each of them had been denied a promotion because of their race in violation of 42 U.S.C. § 1981. The District Court denied the Bank's motion to dismiss but certified its order for interlocutory appeal, which was then consolidated with the Bank's pending appeal in the class action. The Court of Appeals reversed on the merits in the class action, holding that there was insufficient evidence to establish a pattern or practice of racial discrimination in the specified grades, and that none of the Cooper petitioners had been discriminated against. The court further held that, under the doctrine of res judicata, the judgment in the class action precluded the Baxter petitioners from maintaining their individual claims against the Bank.

Held: The Baxter petitioners are not precluded from maintaining their separate action against the Bank. While the Court of Appeals was correct in generally concluding that the Baxter petitioners, as members of the class represented in the class action, were bound by the adverse judgment in that action, the court erred on the preclusive effect it attached to that judgment. The judgment bars the class members from bringing another class action against the Bank alleging a pattern or practice of racial discrimination for the same time period and precludes the class members in any other litigation with the Bank from relitigating the question whether the Bank engaged in such a pattern or practice of racial discrimination during that same time period. But the judgment is not dispositive of the individual claims of the Baxter petitioners. Assuming that they establish a prima facie case of discrimination, the Bank will be required to articulate a legitimate reason for each of the challenged employment decisions, and, if it meets that burden, the ultimate question regarding motivation in the Baxter petitioners' individual cases will be resolved by the District Court. Permitting the Baxter petitioners to bring a separate action will not frustrate the purposes of Rule 23. To deny such permission would be tantamount to requiring that every class member be permitted to intervene to litigate the merits of his individual claim. Moreover, whether the issues framed by the named parties should be expanded to encompass the individual claims of additional class members is a matter that should be decided in the first instance by the District Court. Nothing in Rule 23 requires that the District Court make a finding with respect to each and every matter on which there is testimony in a class action. Rule 23's purpose in providing a mechanism for the expeditious decision of common questions might be defeated by an attempt to decide a host of individual claims before any common question relating to liability has been resolved adversely to the defendant. Pp. 874-881.

698 F.2d 633 (4th Cir.1983), reversed and remanded.

Eric Schnapper, New York City, for petitioners.

Harriet S. Shapiro, Washington, D.C., for United States and E.E.O.C. as amicus curiae, by special leave of Court.

George R. Hodges, Charlotte, N.C., for respondent.

Justice STEVENS delivered the opinion of the Court.

The question to be decided is whether a judgment in a class action determining that an employer did not engage in a general pattern or practice of racial discrimination against the certified class of employees precludes a class member from maintaining a subsequent civil action alleging an individual claim of racial discrimination against the employer.

I

On March 22, 1977, the Equal Employment Opportunity Commission commenced a civil action against respondent, the Federal Reserve Bank of Richmond.¹ Respondent operates a branch in Charlotte, N.C. (the Bank), where during the years 1974-1978 it employed about 350-450 employees in several departments. The EEOC complaint alleged that the Bank was violating § 703(a) of Title VII of the Civil Rights Act of 1964 by engaging in "policies and practices" that included "failing and refusing to promote blacks because of race." App. 9a.

Six months after the EEOC filed its complaint, four individual employees ² were allowed to intervene as plaintiffs. In their "complaint in intervention," these plaintiffs alleged that the Bank's employment practices violated 42 U.S.C. § 1981, as well as Title VII; that each of them was the victim of employment discrimination based on race; and that they could adequately represent a class of black employees against whom the Bank had discriminated because of their race. In due course, the District Court entered an order conditionally certifying the following class pursuant to Federal Rules of Civil Procedure 23(b)(2) and (3):

"All black persons who have been employed by the defendant at its Charlotte Branch Office at any time since January 3, 1974 [6 months prior to the first charge filed by the intervenors with EEOC], who have been discriminated against in promotion, wages, job assignments and terms and conditions of employment because of their race." ³

After certifying the class, the District Court ordered that notice be published in the Charlotte newspapers and mailed to each individual member of the class. The notice described the status of the litigation, and plainly stated that members of the class "will be bound by the judgment or other determination" if they did not exclude themselves by sending a written notice to the Clerk.⁴ Among the recipients of the notice were Phyllis Baxter and five other individuals employed by the Bank.⁵ It is undisputed that these individuals—the Baxter petitioners—are members of the class represented by the intervening plaintiffs and that they made no attempt to exclude themselves from the class.

At the trial the intervening plaintiffs, as well as the Baxter petitioners, testified. The District Court found that the Bank had engaged in a pattern and practice of discrimination from 1974 through 1978 by failing to afford black employees opportunities for advancement and assignment equal to opportunities afforded white employees in pay grades 4 and 5. Except as so specified, however, the District Court found that "there does not appear to be a pattern and practice of discrimination pervasive enough for the court to order relief." App. to Pet. for Cert. 193a-194a. With respect to the claims of the four intervening plaintiffs, the court found that the Bank had discriminated against Cooper and Russell, but not against Moore and Hannah. Finally, the court somewhat cryptically stated that although it had an opinion about "the entitlement to relief of some of the class members who testified at trial," it would defer decision of such matters to a further proceeding. Id., at 194a.

Thereafter, on March 24, 1981, the Baxter petitioners moved to intervene, alleging that each had been denied a promotion for discriminatory reasons. With respect to Emma Ruffin, the court denied the motion because she was a member of the class for which relief had been ordered and therefore her rights would be protected in the Stage II proceedings to be held on the question of relief. With respect to the other five Baxter petitioners, the court also denied the motion, but for a different reason. It held that because all of them were employed in jobs above the grade 5 category, they were not entitled to any benefit from the court's ruling with respect to discrimination in grades 4 and 5. The District Court stated: "The court has found no proof of any classwide discrimination above grade 5 and, therefore, they are not entitled to participate in any Stage II proceedings in this case." Id., at 287a. The court added that it could "see no reason why, if any of the would be intervenors are actively interested in pursuing their claims, they cannot file a Section 1981 suit next week. . . ." Id., at 288a.

A few days later the Baxter petitioners filed a separate action against the Bank alleging that each of them had been denied a promotion because of their...