A class action suit was filed against the Federal Reserve Bank of Richmond (Bank) (defendant), alleging racial discrimination against its employees. The class was certified as all black people who are or were employed at the Bank and were discriminated against because of their race (plaintiffs). Phyllis Baxter and five other Bank employees (Baxter petitioners) were members of the class and received published notice of the certification; they did not choose to opt out of the class. The district court found that the Bank had engaged in a pattern and practice of discrimination over a four year period, but did not engage in sufficient general discrimination pervasive enough to warrant granting relief to the plaintiffs. The Bank appealed. A few days later, the Baxter petitioners filed a discrimination suit separate from the class action. The Bank filed a motion to dismiss this suit, and the motion was denied by the district court. The Bank then filed an interlocutory appeal in the Baxter petitioner case, which was consolidated with the Bank’s pending appeal in the original suit. The United States Court of Appeals for the Fourth Circuit (Court of Appeals) reversed the district court on the merits of the original case, holding that there was not enough evidence to establish a pattern or practice racial discrimination. The Court of Appeals also reversed the district court’s denial of the Bank’s motion to dismiss in the Baxter case, holding that under res judicata, its decision on the merits in the original suit precluded the Baxter petitioners from maintaining their own suits individually. The United States Supreme Court granted certiorari.