U.S. Supreme Court Helicopteros Nacionales v. Hall, 466
U.S. 408 (1984) Helicopteros Nacionales de Columbia
v. Hall No. 82-1127 Argued November 8,
1983 Decided April 24,
1984 466
U.S. 408 CERTIORARI TO THE SUPREME COURT OF
TEXAS Syllabus Petitioner, a Colombian corporation, entered into a contract to
provide helicopter transportation for a Peruvian consortium, the
alter ego of a joint venture that had its headquarters in Houston,
Tex., during the consortium's construction of a pipeline in Peru
for a Peruvian state-owned oil company. Petitioner has no place of
business in Texas, and never has been licensed to do business
there. Its only contacts with the State consisted of sending its
chief executive officer to Houston to negotiate the contract with
the consortium, accepting into its New York bank account checks
drawn by the consortium on a Texas bank, purchasing helicopters,
equipment, and training services from a Texas manufacturer, and
sending personnel to that manufacturer's facilities for training.
After a helicopter owned by petitioner crashed in Peru, resulting
in the death of respondents' decedents -- United States citizens
who were employed by the consortium -- respondents instituted
wrongful death actions in a Texas state court against the
consortium, the Texas manufacturer, and petitioner. Denying
petitioner's motion to dismiss the actions for lack of in personam
jurisdiction over it, the trial court entered judgment against
petitioner on a jury verdict in favor of respondents. The Texas
Court of Civil Appeals reversed, holding that in personam
jurisdiction over petitioner was lacking, but in turn was reversed
by the Texas Supreme Court. Held: Petitioner's contacts with Texas were
insufficient to satisfy the requirements of the Due Process Clause
of the Fourteenth Amendment, and hence to allow the Texas court to
assert in personam jurisdiction over petitioner. The one trip to
Houston by petitioner's chief executive officer for the purpose of
negotiating the transportation services contract cannot be regarded
as a contact of a "continuous and systematic" nature, and thus
cannot support an assertion of general jurisdiction. Similarly,
petitioner's acceptance of checks drawn on a Texas bank is of
negligible significance for purposes of determining whether
petitioner had sufficient contacts in Texas. Nor were petitioner's
purchases of helicopters and equipment from the Texas manufacturer
and the related training trips a sufficient basis for the Texas
court's assertion of jurisdiction. Rosenberg Bros. & Co. v.
Curtis Brown Co., 260 U. S. 516 .
Mere purchases, even if occurring at regular intervals, are not
enough to warrant Page 466 U. S. 409 a State's assertion of in personam jurisdiction over a
nonresident corporation in a cause of action not related to the
purchases. And the fact that petitioner sent personnel to Texas for
training in connection with the purchases did not enhance the
nature of petitioner's contacts with Texas. Pp. 466 U. S.
413 -419. 638 S.W.2d
870 , reversed.

															BLACKMUN, J., delivered the opinion of the Court, in which
BURGER, C.J., and WHITE, MARSHALL, POWELL, REHNQUIST STEVENS, and
O'CONNOR, JJ., joined. BRENNAN, J., filed a dissenting opinion, post, p. 466 U. S.
419 .

															JUSTICE BLACKMUN delivered the opinion of the Court.

															We granted certiorari in this case, 460 U.S. 1021 (1983), to
decide whether the Supreme Court of Texas correctly ruled that the
contacts of a foreign corporation with the State of Texas were
sufficient to allow a Texas state court to assert jurisdiction over
the corporation in a cause of action not arising out of or related
to the corporation's activities within the State. I Petitioner Helicopteros Nacionales de Colombia, S. A. (Helicol),
is a Colombian corporation with its principal place of business in
the city of Bogota in that country. It is engaged in the business
of providing helicopter transportation for oil and construction
companies in South America. On Page 466 U. S. 410 January 26, 1976, a helicopter owned by Helicol crashed in Peru.
Four United States citizens were among those who lost their lives
in the accident. Respondents are the survivors and representatives
of the four decedents.

															At the time of the crash, respondents' decedents were employed
by Consorcio, a Peruvian consortium, and were working on a pipeline
in Peru. Consorcio is the alter ego of a joint venture named
Williams-Sedco-Horn (WSH). [ Footnote 1 ] The venture had its headquarters in Houston,
Tex. Consorcio had been formed to enable the venturers to enter
into a contract with Petro Peru, the Peruvian state-owned oil
company. Consorcio was to construct a pipeline for Petro Peru
running from the interior of Peru westward to the Pacific Ocean.
Peruvian law forbade construction of the pipeline by any
non-Peruvian entity.

															Consorcio/WSH [ Footnote 2 ]
needed helicopters to move personnel, materials, and equipment into
and out of the construction area. In 1974, upon request of
Consorcio/WSH, the chief executive officer of Helicol, Francisco
Restrepo, flew to the United States and conferred in Houston with
representatives of the three joint venturers. At that meeting,
there was a discussion of prices, availability, working conditions,
fuel, supplies, and housing. Restrepo represented that Helicol
could have the first helicopter on the job in 15 days. The
Consorcio/WSH representatives decided to accept the contract
proposed by Restrepo. Helicol began performing before the agreement
was formally signed in Peru on November 11, 1974. [ Footnote 3 ] The contract was written in
Spanish on Page 466 U. S. 411 official government stationery and provided that the residence
of all the parties would be Lima, Peru. It further stated that
controversies arising out of the contract would be submitted to the
jurisdiction of Peruvian courts. In addition, it provided that
Consorcio/WSH would make payments to Helicol's account with the
Bank of America in New York City. App. 12a.

															Aside from the negotiation session in Houston between Restrepo
and the representatives of Consorcio/WSH, Helicol had other
contacts with Texas. During the years 1970-1977, it purchased
helicopters (approximately 80% of its fleet), spare parts, and
accessories for more than $4 million from Bell Helicopter Company
in Fort Worth. In that period, Helicol sent prospective pilots to
Fort Worth for training and to ferry the aircraft to South America.
It also sent management and maintenance personnel to visit Bell
Helicopter in Fort Worth during the same period in order to receive
"plant familiarization" and for technical consultation. Helicol
received into its New York City and Panama City, Fla., bank
accounts over $5 million in payments from Consorcio/WSH drawn upon
First City National Bank of Houston.

															Beyond the foregoing, there have been no other business contacts
between Helicol and the State of Texas. Helicol never has been
authorized to do business in Texas, and never has had an agent for
the service of process within the State. It never has performed
helicopter operations in Texas or sold any product that reached
Texas, never solicited business in Texas, never signed any contract
in Texas, never had any employee based there, and never recruited
an employee in Texas. In addition, Helicol never has owned real or
personal property in Texas, and never has maintained an office or
establishment there. Helicol has maintained no records in Texas,
and has no shareholders in that State. [ Footnote 4 ] None of the Page 466 U. S. 412 respondents or their decedents were domiciled in Texas, Tr. of
Oral Arg. 17, 18, [ Footnote 5 ]
but all of the decedents were hired in Houston by Consorcio/WSH to
work on the Petro Peru pipeline project.

															Respondents instituted wrongful death actions in the District
Court of Harris County, Tex., against Consorcio/WSH, Bell
Helicopter Company, and Helicol. Helicol filed special appearances
and moved to dismiss the actions for lack of in personam
jurisdiction over it. The motion was denied. After a consolidated
jury trial, judgment was entered against Helicol on a jury verdict
of $1,141,200 in favor of respondents. [ Footnote 6 ] App. 174a.

															The Texas Court of Civil Appeals, Houston, First District,
reversed the judgment of the District Court, holding that in
personam jurisdiction over Helicol was lacking. 616 S.W.2d 247
(1981). The Supreme Court of Texas, with three justices dissenting,
initially affirmed the judgment of the Court of Civil Appeals. App.
to Pet. for Cert. 46a-62a. Seven months later, however, on motion
for rehearing, the court withdrew its prior opinions and, again
with three justices dissenting, reversed the judgment of the
intermediate court. 638 S.W.2d 870 (1982). In ruling that the Texas courts had Page 466 U. S. 413 in personam jurisdiction, the Texas Supreme Court first
held that the State's long-arm statute reaches as far as the Due
Process Clause of the Fourteenth Amendment permits. Id. at
872. [ Footnote 7 ] Thus, the
only question remaining for the court to decide was whether it was
consistent with the Due Process Clause for Texas courts to assert in personam jurisdiction over Helicol. Ibid. II The Due Process Clause of the Fourteenth Amendment operates to
limit the power of a State to assert in personam Page 466 U. S. 414 jurisdiction over a nonresident defendant. Pennoyer v.
Neff, 95 U. S. 714 (1878). Due process requirements are satisfied when in
personam jurisdiction is asserted over a nonresident corporate
defendant that has

															"certain minimum contacts with [the forum] such that the
maintenance of the suit does not offend 'traditional notions of
fair play and substantial justice.'" International Shoe Co. v. Washington, 326 U.
S. 310 , 326 U. S. 316 (1945), quoting Milliken v. Meyer, 311 U.
S. 457 , 311 U. S. 463 (1940). When a controversy is related to or "arises out of" a
defendant's contacts with the forum, the Court has said that a
"relationship among the defendant, the forum, and the litigation"
is the essential foundation of in personam jurisdiction. Shaffer v. Heitner, 433 U. S. 186 , 433 U. S. 204 (1977). [ Footnote 8 ]

															Even when the cause of action does not arise out of or relate to
the foreign corporation's activities in the forum State, [ Footnote 9 ] due process is not offended
by a State's subjecting the corporation to its in personam jurisdiction when there are sufficient contacts between the State
and the foreign corporation. Perkins v. Benguet Consolidated
Mining Co., 342 U. S. 437 (1952); see Keeton v. Hustler Magazine, Inc., 465 U.
S. 770 , 465 U. S.
779 -780 (1984). In Perkins, the Court addressed
a situation in which state courts had asserted general jurisdiction
over a defendant foreign corporation. During the Japanese Page 466 U. S. 415 occupation of the Philippine Islands, the president and general
manager of a Philippine mining corporation maintained an office in
Ohio from which he conducted activities on behalf of the company.
He kept company files and held directors' meetings in the office,
carried on correspondence relating to the business, distributed
salary checks drawn on two active Ohio bank accounts, engaged an
Ohio bank to act as transfer agent, and supervised policies dealing
with the rehabilitation of the corporation's properties in the
Philippines. In short, the foreign corporation, through its
president, "ha[d] been carrying on in Ohio a continuous and
systematic, but limited, part of its general business," and the
exercise of general jurisdiction over the Philippine corporation by
an Ohio court was "reasonable and just." 342 U.S. at 342 U. S. 438 ,
445.

															All parties to the present case concede that respondents' claims
against Helicol did not "arise out of," and are not related to,
Helicol's activities within Texas. [ Footnote 10 ] We thus must Page 466 U. S. 416 explore the nature of Helicol's contacts with the State of Texas
to determine whether they constitute the kind of continuous and
systematic general business contacts the Court found to exist in Perkins. We hold that they do not.

															It is undisputed that Helicol does not have a place of business
in Texas, and never has been licensed to do business in the State.
Basically, Helicol's contacts with Texas consisted of sending its
chief executive officer to Houston for a contract-negotiation
session; accepting into its New York bank account checks drawn on a
Houston bank; purchasing helicopters, equipment, and training
services from Bell Helicopter for substantial sums; and sending
personnel to Bell's facilities in Fort Worth for training.

															The one trip to Houston by Helicol's chief executive officer for
the purpose of negotiating the transportation services contract
with Consorcio/WSH cannot be described or regarded as a contact of
a "continuous and systematic" nature, as Perkins described
it, see also International Shoe Co. v. Washington, 326
U.S. at 326 U. S. 320 ,
and thus cannot support an assertion of in personam jurisdiction over Helicol by a Texas court. Similarly, Helicol's
acceptance from Consorcio/WSH of checks drawn on a Texas bank is of
negligible significance for purposes of determining whether Helicol
had sufficient contacts in Texas. There is no indication that
Helicol ever requested that the checks be drawn on a Texas bank or
that there was any negotiation between Helicol and Consorcio/WSH
with respect to the location or identity of the bank on which
checks would be drawn. Common sense and everyday experience suggest
that, absent unusual circumstances, [ Footnote 11 ] the bank on which a check is drawn is
generally of little Page 466 U. S. 417 consequence to the payee, and is a matter left to the discretion
of the drawer. Such unilateral activity of another party or a third
person is not an appropriate consideration when determining whether
a defendant has sufficient contacts with a forum State to justify
an assertion of jurisdiction. See Kulko v. California Superior
Court, 436 U. S. 84 , 436 U. S. 93 (1978) (arbitrary to subject one parent to suit in any State where
other parent chooses to spend time while having custody of child
pursuant to separation agreement); Hanson v. Denckla, 357 U. S. 235 , 357 U.S. 253 (1958) ("The
unilateral activity of those who claim some relationship with a
nonresident defendant cannot satisfy the requirement of contact
with the forum State"); see also Lilly, Jurisdiction Over
Domestic and Alien Defendants, 69 Va.L.Rev. 85, 99 (1983).

															The Texas Supreme Court focused on the purchases and the related
training trips in finding contacts sufficient to support an
assertion of jurisdiction. We do not agree with that assessment,
for the Court's opinion in Rosenberg Bros. & Co. v. Curtis
Brown Co., 260 U. S. 516 (1923) (Brandeis, J., for a unanimous tribunal), makes clear that
purchases and related trips, standing alone, are not a sufficient
basis for a State's assertion of jurisdiction.

															The defendant in Rosenberg was a small retailer in
Tulsa, Okla., who dealt in men's clothing and furnishings. It never
had applied for a license to do business in New York, nor had it at
any time authorized suit to be brought against it there. It never
had an established place of business in New York, and never
regularly carried on business in that State. Its only connection
with New York was that it purchased from New York wholesalers a
large portion of the merchandise sold in its Tulsa store. The
purchases sometimes were made by correspondence and sometimes
through visits to New York by an officer of the defendant. The
Court concluded:

															"Visits on such business, even if occurring at regular
intervals, would not warrant the inference that the corporation was
present within the jurisdiction of [New York]." Id. at 518. Page 466 U. S. 418 This Court in International Shoe acknowledged, and did
not repudiate, its holding in Rosenberg. See 326
U.S. at 326 U. S. 318 .
In accordance with Rosenberg, we hold that mere purchases,
even if occurring at regular intervals, are not enough to warrant a
State's assertion of in personam jurisdiction over a
nonresident corporation in a cause of action not related to those
purchase transactions. [ Footnote
12 ] Nor can we conclude that the fact that Helicol sent
personnel into Texas for training in connection with the purchase
of helicopters and equipment in that State in any way enhanced the
nature of Helicol's contacts with Texas. The training was a part of
the package of goods and services purchased by Helicol from Bell
Helicopter. The brief presence of Helicol employees in Texas for
the purpose of attending the training sessions is no more a
significant contact than were the trips to New York made by the
buyer for the retail store in Rosenberg. See also
Kulko v. California Superior Court, 436 U.S. at 436 U. S. 93 (basing California jurisdiction on 3-day and 1-day stopovers in
that State "would make a mockery of " due process limitations on
assertion of personal jurisdiction). III We hold that Helicol's contacts with the State of Texas were
insufficient to satisfy the requirements of the Due Process Page 466 U. S. 419 Clause of the Fourteenth Amendment. [ Footnote 13 ] Accordingly, we reverse the judgment of
the Supreme Court of Texas. It is so ordered. [ Footnote 1 ]

															The participants in the joint venture were Williams
International Sudamericana, Ltd., a Delaware corporation; Sedco
Construction Corporation, a Texas corporation; and Horn
International, Inc., a Texas corporation.

															[ Footnote 2 ]

															Throughout the record in this case, the entity is referred to
both as Consorcio and as WSH. We refer to it hereinafter as
Consorcio/WSH.

															[ Footnote 3 ]

															Respondents acknowledge that the contract was executed in Peru,
and not in the United States. Tr. of Oral Arg. 22-23. See App. 79a; Brief for Respondents 3.

															[ Footnote 4 ]

															The Colombian national airline, Aerovias Nacionales de Colombia,
owns approximately 94% of Helicol's capital stock. The remainder is
held by Aerovias Corporacion de Viajes and four South American
individuals. See Brief for Petitioner 2, n. 2.

															[ Footnote 5 ]

															Respondents' lack of residential or other contacts with Texas of
itself does not defeat otherwise proper jurisdiction. Keeton v.
Hustler Magazine, Inc., 465 U. S. 770 , 465 U. S. 780 (1984); Calder v. Jones, 465 U. S. 783 , 465 U. S. 788 (1984). We mention respondents' lack of contacts merely to show
that nothing in the nature of the relationship between respondents
and Helicol could possibly enhance Helicol's contacts with Texas.
The harm suffered by respondents did not occur in Texas. Nor is it
alleged that any negligence on the part of Helicol took place in
Texas.

															[ Footnote 6 ]

															Defendants Consorcio WSH and Bell Helicopter Company were
granted directed verdicts with respect to respondents' claims
against them. Bell Helicopter was granted a directed verdict on
Helicol's cross-claim against it. App. 167a. Consorcio/WSH, as
cross-plaintiff in a claim against Helicol, obtained a judgment in
the amount of $70,000. Id. at 174a.

															[ Footnote 7 ]

															The State's long-arm statute is Tex.Rev.Civ.Stat.Ann., Art.
2031b (Vernon 1964 and Supp.1982-1983). It reads in relevant
part:

															"Sec. 3. Any foreign corporation . . . that engages in business
in this State, irrespective of any Statute or law respecting
designation or maintenance of resident agents, and does not
maintain a place of regular business in this State or a designated
agent upon whom service may be made upon causes of action arising
out of such business done in this State, the act or acts of
engaging in such business within this State shall be deemed
equivalent to an appointment by such foreign corporation . . . of
the Secretary of State of Texas as agent upon whom service of
process may be made in any action, suit or proceedings arising out
of such business done in this State, wherein such corporation . . .
is a party or is to be made a party."

															"Sec. 4. For the purpose of this Act, and without including
other acts that may constitute doing business, any foreign
corporation . . . shall be deemed doing business in this State by
entering into contract by mail or otherwise with a resident of
Texas to be performed in whole or in part by either party in this
State, or the committing of any tort in whole or in part in this
State. The act of recruiting Texas residents, directly or through
an intermediary located in Texas, for employment inside or outside
of Texas shall be deemed doing business in this State."

															The last sentence of § 4 was added by 1979 Tex.Gen.Laws, ch.
245, § 1, and became effective August 27, 1979.

															The Supreme Court of Texas, in its principal opinion, relied
upon rulings in U-Anchor Advertising, Inc. v.
Burt, 553 S.W.2d 760 (Tex.1977); Hoppenfeld v. Crook, 498 S.W.2d 52
(Tex.Civ.App.1973); and O'Brien v. Lanpar
Co., 399 S.W.2d 340 (Tex.1966). It is not within our province, of course, to determine
whether the Texas Supreme Court correctly interpreted the State's
long-arm statute. We therefore accept that court's holding that the
limits of the Texas statute are coextensive with those of the Due
Process Clause.

															[ Footnote 8 ]

															It has been said that, when a State exercises personal
jurisdiction over a defendant in a suit arising out of or related
to the defendant's contacts with the forum, the State is exercising
"specific jurisdiction" over the defendant. See Von Mehren
& Trautman, Jurisdiction to Adjudicate: A Suggested Analysis,
79 Harv.L.Rev. 1121, 1144-1164 (1966).

															[ Footnote 9 ]

															When a State exercises personal jurisdiction over a defendant in
a suit not arising out of or related to the defendant's contacts
with the forum, the State has been said to be exercising "general
jurisdiction" over the defendant. See Brilmayer, How
Contacts Count: Due Process Limitations on State Court
Jurisdiction, 1980 S.Ct.Rev. 77, 80-81; Von Mehren & Trautman,
79 Harv.L.Rev. at 1136-1144; Calder v. Jones, 465 U.S. at 465 U. S.
786 .

															[ Footnote 10 ] See Brief for Respondents 14; Tr. of Oral Arg. 26-27,
30-31. Because the parties have not argued any relationship between
the cause of action and Helicol's contacts with the State of Texas,
we, contrary to the dissent's implication, post at 466 U. S.
419 -420, assert no "view" with respect to that
issue.

															The dissent suggests that we have erred in drawing no
distinction between controversies that "relate to" a defendant's
contacts with a forum and those that "arise out of" such contacts. Post at 466 U. S. 420 .
This criticism is somewhat puzzling, for the dissent goes on to
urge that, for purposes of determining the constitutional validity
of an assertion of specific jurisdiction, there really should be no
distinction between the two. Post at 466 U. S.
427 -428.

															We do not address the validity or consequences of such a
distinction, because the issue has not been presented in this case.
Respondents have made no argument that their cause of action either
arose out of or is related to Helicol's contacts with the State of
Texas. Absent any briefing on the issue, we decline to reach the
questions (1) whether the terms "arising out of" and "related to"
describe different connections between a cause of action and a
defendant's contacts with a forum, and (2) what sort of tie between
a cause of action and a defendant's contacts with a forum is
necessary to a determination that either connection exists. Nor do
we reach the question whether, if the two types of relationship
differ, a forum's exercise of personal jurisdiction in a situation
where the cause of action "relates to," but does not "arise out
of," the defendant's contacts with the forum should be analyzed as
an assertion of specific jurisdiction.

															[ Footnote 11 ]

															For example, if the financial health and continued ability of
the bank to honor the draft are questionable, the payee might
request that the check be drawn on an account at some other
institution.

															[ Footnote 12 ]

															This Court in International Shoe cited Rosenberg for the proposition that

															"the commission of some single or occasional acts of the
corporate agent in a state sufficient to impose an obligation or
liability on the corporation has not been thought to confer upon
the state authority to enforce it."

															326 U.S. at 326 U. S. 318 .
Arguably, therefore, Rosenberg also stands for the
proposition that mere purchases are not a sufficient basis for
either general or specific jurisdiction. Because the case before us
is one in which there has been an assertion of general jurisdiction
over a foreign defendant, we need not decide the continuing
validity of Rosenberg with respect to an assertion of
specific jurisdiction, i.e., where the cause of action
arises out of or relates to the purchases by the defendant in the
forum State.

															[ Footnote 13 ]

															As an alternative to traditional minimum contacts analysis,
respondents suggest that the Court hold that the State of Texas had
personal jurisdiction over Helicol under a doctrine of
"jurisdiction by necessity." See Shaffer v. Heitner, 433 U. S. 186 , 433 U. S. 211 ,
n. 37 (1977). We conclude, however, that respondents failed to
carry their burden of showing that all three defendants could not
be sued together in a single forum. It is not clear from the
record, for example, whether suit could have been brought against
all three defendants in either Colombia or Peru. We decline to
consider adoption of a doctrine of jurisdiction by necessity -- a
potentially far-reaching modification of existing law -- in the
absence of a more complete record.

															JUSTICE BRENNAN, dissenting.

															Decisions applying the Due Process Clause of the Fourteenth
Amendment to determine whether a State may constitutionally assert in personam jurisdiction over a particular defendant for a
particular cause of action most often turn on a weighing of facts. See, e.g., Kulko v. California Superior Court, 436 U. S. 84 , 436 U. S. 92 (1978); id. at 436 U. S.
101 -102 (BRENNAN, J., dissenting). To a large extent,
today's decision follows the usual pattern. Based on essentially
undisputed facts, the Court concludes that petitioner Helicol's
contacts with the State of Texas were insufficient to allow the
Texas state courts constitutionally to assert "general
jurisdiction" over all claims filed against this foreign
corporation. Although my independent weighing of the facts leads me
to a different conclusion, see infra at 466 U. S.
423 -424, the Court's holding on this issue is neither
implausible nor unexpected.

															What is troubling about the Court's opinion, however, are the
implications that might be drawn from the way in which the Court
approaches the constitutional issue it addresses. First, the Court
limits its discussion to an assertion of general jurisdiction of
the Texas courts because, in its view, the Page 466 U. S. 420 underlying cause of action does "not aris[e] out of or relat[e]
to the corporation's activities within the State." Ante at 466 U. S. 409 .
Then, the Court relies on a 1923 decision in Rosenberg Bros.
& Co. v. Curtis Brown Co., 260 U.
S. 516 , without considering whether that case retains
any validity after our more recent pronouncements concerning the
permissible reach of a State's jurisdiction. By posing and deciding
the question presented in this manner, I fear that the Court is
saying more than it realizes about constitutional limitations on
the potential reach of in personam jurisdiction. In
particular, by relying on a precedent whose premises have long been
discarded, and by refusing to consider any distinction between
controversies that "relate to" a defendant's contacts with the
forum and causes of action that "arise out of" such contacts, the
Court may be placing severe limitations on the type and amount of
contacts that will satisfy the constitutional minimum.

															In contrast, I believe that the undisputed contacts in this case
between petitioner Helicol and the State of Texas are sufficiently
important, and sufficiently related to the underlying cause of
action, to make it fair and reasonable for the State to assert
personal jurisdiction over Helicol for the wrongful death actions
filed by the respondents. Given that Helicol has purposefully
availed itself of the benefits and obligations of the forum, and
given the direct relationship between the underlying cause of
action and Helicol's contacts with the forum, maintenance of this
suit in the Texas courts "does not offend [the] traditional
notions of fair play and substantial justice,'" International
Shoe Co. v. Washington, 326 U. S. 310 , 326 U. S. 316 (1945) (quoting Milliken v. Meyer, 311 U.
S. 457 , 311 U. S. 463 (1940)), that are the touchstone of jurisdictional analysis under
the Due Process Clause. I therefore dissent. I The Court expressly limits its decision in this case to "an
assertion of general jurisdiction over a foreign defendant." Page 466 U. S. 421 Ante at 466 U. S. 418 ,
n. 12. See ante at 466 U. S. 415 ,
and n. 10. Having framed the question in this way, the Court is
obliged to address our prior holdings in Perkins v. Benguet
Consolidated Mining Co., 342 U. S. 437 (1952), and Rosenberg Bros. & Co. v. Curtis Brown Co.,
supra. In Perkins, the Court considered a State's
assertion of general jurisdiction over a foreign corporation that
"ha[d] been carrying on . . . a continuous and systematic, but
limited, part of its general business" in the forum. 342 U.S. at 342 U. S. 438 .
Under the circumstances of that case, we held that such contacts
were constitutionally sufficient "to make it reasonable and just to
subject the corporation to the jurisdiction" of that State. Id. at 342 U. S. 445 (citing International Shoe, supra, at 326 U. S.
317 -320). Nothing in Perkins suggests, however,
that such "continuous and systematic" contacts are a necessary
minimum before a State may constitutionally assert general
jurisdiction over a foreign corporation.

															The Court therefore looks for guidance to our 1923 decision in Rosenberg, supra, which until today was of dubious
validity given the subsequent expansion of personal jurisdiction
that began with International Shoe, supra, in 1945. In Rosenberg, the Court held that a company's purchases
within a State, even when combined with related trips to the State
by company officials, would not allow the courts of that State to
assert general jurisdiction over all claims against the nonresident
corporate defendant making those purchases. [ Footnote 2/1 ] Page 466 U. S. 422 Reasoning by analogy, the Court in this case concludes that
Helicol's contacts with the State of Texas are no more significant
than the purchases made by the defendant in Rosenberg. The
Court makes no attempt, however, to ascertain whether the narrow
view of in personam jurisdiction adopted by the Court in Rosenberg comports with "the fundamental transformation of
our national economy" that has occurred since 1923. McGee v.
International Life Ins. Co., 355 U. S. 220 , 355 U. S.
222 -223 (1957). See also World-Wide Volkswagen Corp.
v. Woodson, 444 U. S. 286 , 444 U. S.
292 -293 (1980); id. at 444 U. S.
308 -309 (BRENNAN, J., dissenting); Hanson v.
Denckla, 357 U. S. 235 , 357 U. S.
250 -251 (1958); id. at 357 U. S. 260 (Black, J., dissenting). This failure, in my view, is fatal to the
Court's analysis.

															The vast expansion of our national economy during the past
several decades has provided the primary rationale for expanding
the permissible reach of a State's jurisdiction under the Due
Process Clause. By broadening the type and amount of business
opportunities available to participants in interstate and foreign
commerce, our economy has increased the frequency with which
foreign corporations actively pursue commercial transactions
throughout the various States. In turn, it has become both
necessary and, in my view, desirable to allow the States more
leeway in bringing the activities of these nonresident corporations
within the scope of their respective jurisdictions.

															This is neither a unique nor a novel idea. As the Court first
noted in 1957:

															"[M]any commercial transactions touch two or more States, and
may involve parties separated by the full continent. With this
increasing nationalization of commerce has come a great increase in
the amount of business conducted by mail across state lines. At
the Page 466 U. S. 423 same time, modern transportation and communication have made it
much less burdensome for a party sued to defend himself in a State
where he engages in economic activity." McGee, supra, at 355 U. S.
222 -223. See also World-Wide Volkswagen, supra, at 444 U. S. 293 (reaffirming that "[t]he historical developments noted in McGee . . . have only accelerated in the generation since
that case was decided"); Hanson v. Denckla, supra, at 357 U. S.
250 -251.

															Moreover, this "trend . . . toward expanding the permissible
scope of state jurisdiction over foreign corporations and other
nonresidents," McGee, supra, at 355 U. S. 222 ,
is entirely consistent with the "traditional notions of fair play
and substantial justice," International Shoe, 326 U.S. at 326 U. S. 316 ,
that control our inquiry under the Due Process Clause. As active
participants in interstate and foreign commerce take advantage of
the economic benefits and opportunities offered by the various
States, it is only fair and reasonable to subject them to the
obligations that may be imposed by those jurisdictions. And chief
among the obligations that a nonresident corporation should expect
to fulfill is amenability to suit in any forum that is
significantly affected by the corporation's commercial
activities.

															As a foreign corporation that has actively and purposefully
engaged in numerous and frequent commercial transactions in the
State of Texas, Helicol clearly falls within the category of
nonresident defendants that may be subject to that forum's general
jurisdiction. Helicol not only purchased helicopters and other
equipment in the State for many years, but also sent pilots and
management personnel into Texas to be trained in the use of this
equipment and to consult with the seller on technical matters.
[ Footnote 2/2 ] Moreover,
negotiations for the Page 466 U. S. 424 contract under which Helicol provided transportation services to
the joint venture that employed the respondents' decedents also
took place in the State of Texas. Taken together, these contacts
demonstrate that Helicol obtained numerous benefits from its
transaction of business in Texas. In turn, it is eminently fair and
reasonable to expect Helicol to face the obligations that attach to
its participation in such commercial transactions. Accordingly, on
the basis of continuous commercial contacts with the forum, I would
conclude that the Due Process Clause allows the State of Texas to
assert general jurisdiction over petitioner Helicol. II The Court also fails to distinguish the legal principles that
controlled our prior decisions in Perkins and Rosenberg. In particular, the contacts between petitioner
Helicol and the State of Texas, unlike the contacts between the
defendant and the forum in each of those cases, are significantly
related to the cause of action alleged in the original suit filed
by the respondents. Accordingly, in my view, it is both fair and
reasonable for the Texas courts to assert specific jurisdiction
over Helicol in this case.

															By asserting that the present case does not implicate the
specific jurisdiction of the Texas courts, see ante at 466 U. S. 415 ,
and nn. 10 and 12, the Court necessarily removes its decision Page 466 U. S. 425 from the reality of the actual facts presented for our
consideration. [ Footnote 2/3 ]
Moreover, the Court refuses to consider any distinction between
contacts that are "related to" the underlying cause of action and
contacts that "give rise" to the underlying cause of action. In my
view, however, there is a substantial difference between these two
standards for asserting specific jurisdiction. Thus, although I
agree that the respondents' cause of action did not formally "arise
out of" specific activities initiated by Helicol in the State of
Texas, I believe that the wrongful death claim filed by the
respondents is significantly related to the undisputed contacts
between Helicol and the forum. On that basis, I would conclude that
the Due Process Clause allows the Texas courts to assert specific
jurisdiction over this particular action.

															The wrongful death actions filed by the respondents were
premised on a fatal helicopter crash that occurred in Peru. Helicol
was joined as a defendant in the lawsuits because it provided
transportation services, including the particular helicopter and
pilot involved in the crash, to the joint venture Page 466 U. S. 426 that employed the decedents. Specifically, the respondent Hall
claimed in her original complaint that "Helicol is . . . legally
responsible for its own negligence through its pilot employee."
App. 6a. Viewed in light of these allegations, the contacts between
Helicol and the State of Texas are directly and significantly
related to the underlying claim filed by the respondents. The
negotiations that took place in Texas led to the contract in which
Helicol agreed to provide the precise transportation services that
were being used at the time of the crash. Moreover, the helicopter
involved in the crash was purchased by Helicol in Texas, and the
pilot whose negligence was alleged to have caused the crash was
actually trained in Texas. See Tr. Of Oral Arg. 5, 22.
This is simply not a case, therefore, in which a state court has
asserted jurisdiction over a nonresident defendant on the basis of
wholly unrelated contacts with the forum. Rather, the contacts
between Helicol and the forum are directly related to the
negligence that was alleged in the respondent Hall's original
complaint. [ Footnote 2/4 ] Because
Helicol should have expected to be amenable to suit in the Texas
courts for claims directly related to these contacts, it is fair
and reasonable to allow the assertion of jurisdiction in this
case.

															Despite this substantial relationship between the contacts and
the cause of action, the Court declines to consider whether the
courts of Texas may assert specific jurisdiction over this suit.
Apparently, this simply reflects a narrow interpretation of the
question presented for review. See ante at 466 U. S.
415 -416, n. 10. It is nonetheless possible that the
Court's opinion may be read to imply that the specific jurisdiction
of the Texas courts is inapplicable because the cause of action Page 466 U. S. 427 did not formally "arise out of" the contacts between Helicol and
the forum. In my view, however, such a rule would place
unjustifiable limits on the bases under which Texas may assert its
jurisdictional power. [ Footnote
2/5 ]

															Limiting the specific jurisdiction of a forum to cases in which
the cause of action formally arose out of the defendant's contacts
with the State would subject constitutional standards under the Due
Process Clause to the vagaries of the substantive law or pleading
requirements of each State. For example, the complaint filed
against Helicol in this case alleged negligence based on pilot
error. Even though the pilot was trained in Texas, the Court
assumes that the Texas courts may not assert jurisdiction over the
suit because the cause of action "did not arise out of,' and
[is] not related to," that training. See ante at 466 U. S. 415 .
If, however, the applicable substantive law required that negligent
training of the pilot was a necessary element of a cause of action
for pilot error, or if the respondents had simply added an
allegation of negligence in the training provided for the Helicol
pilot, then presumably the Court would concede that the specific
jurisdiction of the Texas courts was applicable. Our interpretation of the Due Process Clause has never been so
dependent upon the applicable substantive law or the State's formal
pleading requirements. At least since International Shoe Co. v.
Washington, 326 U. S. 310 (1945), the principal focus when determining whether a forum may
constitutionally assert jurisdiction over a nonresident defendant
has been on fairness and reasonableness to the defendant. To this
extent, a court's specific jurisdiction should be applicable
whenever the cause of action arises out of or relates to the
contacts between the defendant and the forum. It is eminently Page 466 U. S. 428 fair and reasonable, in my view, to subject a defendant to suit
in a forum with which it has significant contacts directly related
to the underlying cause of action. Because Helicol's contacts with
the State of Texas meet this standard, I would affirm the judgment
of the Supreme Court of Texas.

															[ Footnote 2/1 ]

															The Court leaves open the question whether the decision in Rosenberg was intended to address any constitutional
limits on an assertion of "specific jurisdiction." Ante at 466 U. S. 418 ,
n. 12 (citing International Shoe, 326 U.S. at 326 U. S.
318 ). If anything is clear from Justice Brandeis'
opinion for the Court in Rosenberg, however, it is that
the Court was concerned only with general jurisdiction over the
corporate defendant. See 260 U.S. at 260 U. S. 517 ("The sole question for decision is whether . . . defendant was
doing business within the State of New York in such manner and to
such extent as to warrant the inference that it was present
there"); id. at 260 U. S. 518 (the corporation's contacts with the forum "would not warrant the
inference that the corporation was present within the jurisdiction
of the State"); ante at 466 U. S. 417 .
The Court's resuscitation of Rosenberg, therefore, should
have no bearing upon any forum's assertion of jurisdiction over
claims that arise out of or relate to a defendant's contacts with
the State.

															[ Footnote 2/2 ]

															Although the Court takes note of these contacts, it concludes
that they did not

															"enhanc[e] the nature of Helicol's contacts with Texas [because
the] training was a part of the package of goods and services
purchased by Helicol." Ante at 466 U. S. 418 .
Presumably, the Court's statement simply recognizes that
participation in today's interdependent markets often necessitates
the use of complicated purchase contracts that provide for numerous
contacts between representatives of the buyer and seller, as well
as training for related personnel. Ironically, however, while
relying on these modern-day realities to denigrate the significance
of Helicol's contacts with the forum, the Court refuses to
acknowledge that these same realities require a concomitant
expansion in a forum's jurisdictional reach. See supra at 466 U. S.
421 -423. As a result, when deciding that the balance in
this case must be struck against jurisdiction, the Court loses
sight of the ultimate inquiry -- whether it is fair and reasonable
to subject a nonresident corporate defendant to the jurisdiction of
a State when that defendant has purposefully availed itself of the
benefits and obligations of that particular forum. Cf. Hanson
v. Denckla, 357 U. S. 235 , 357 U.S. 253 (1958).

															[ Footnote 2/3 ]

															Nor do I agree with the Court that the respondents have conceded
that their claims are not related to Helicol's activities within
the State of Texas. Although parts of their written and oral
arguments before the Court proceed on the assumption that no such
relationship exists, other portions suggest just the opposite:

															"If it is the concern of the Solicitor General [appearing for
the United States as amicus curiae ] that a holding for
Respondents here will cause foreign companies to refrain from
purchasing in the United States for fear of exposure to general
jurisdiction on unrelated causes of action, such concern is not
well founded."

															"Respondents' cause is not dependent on a ruling that mere
purchases in a state, together with incidental training for
operating and maintaining the merchandise purchased, can constitute
the ties, contacts and relations necessary to justify jurisdiction
over an unrelated cause of action. However, regular purchases and
training coupled with other contacts, ties and relations may form
the basis for jurisdiction."

															Brief for Respondents 13-14. Thus, while the respondents'
position before this Court is admittedly less than clear, I believe
it is preferable to address the specific jurisdiction of the Texas
courts because Helicol's contacts with Texas are in fact related to
the underlying cause of action.

															[ Footnote 2/4 ]

															The jury specifically found that "the pilot failed to keep the
helicopter under proper control," that "the helicopter was flown
into a treetop fog condition, whereby the vision of the pilot was
impaired," that "such flying was negligence," and that "such
negligence . . . was a proximate cause of the crash." See App. 167a-168a. On the basis of these findings, Helicol was ordered
to pay over $1 million in damages to the respondents.

															[ Footnote 2/5 ] Compare Von Mehren & Trautman, Jurisdiction to
Adjudicate: A Suggested Analysis, 79 Harv.L.Rev. 1121, 1144-1163
(1966), with Brilmayer, How Contacts Count: Due Process
Limitations on State Court Jurisdiction, 1980 S.Ct.Rev. 77, 80-88. See also Lilly, Jurisdiction Over Domestic and Alien
Defendants, 69 Va.L.Rev. 85, 100-101, and n. 66 (1983).


U.S. Supreme Court Cooper v. FRB of Richmond, 467
U.S. 867 (1984) Cooper v. Federal Reserve Bank of
Richmond No. 83-185 Argued March 19, 1984 Decided June 25, 1984 467
U.S. 867 CERTIORARI TO THE UNITED STATES
COURT OF APPEALS FOR THE FOURTH
CIRCUIT 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 Page 467 U. S. 868 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. 467 U. S.
874 -881.

															698 F.2d 633, reversed and remanded.

															STEVENS, J., delivered the opinion of the Court, in which
BURGER, C.J., and BRENNAN, WHITE, BLACKMUN, REHNQUIST, and
O'CONNOR, JJ., joined. MARSHALL, J., concurred in the judgment.
POWELL, J., took no part in the decision of the case. Page 467 U. S. 869 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. [ Footnote 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 [ Footnote 2 ] were
allowed to intervene as plaintiffs. In Page 467 U. S. 870 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. [ Footnote 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.
[ Footnote 4 ] Among the
recipients of the Page 467 U. S. 871 notice were Phyllis Baxter and five other individuals employed
by the Bank. [ Footnote 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 Page 467 U. S. 872 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 race in violation of 42 U.S.C. § 1981.
The Bank moved to dismiss the complaint on the ground that each of
them was a member of the class Page 467 U. S. 873 that had been certified in the Cooper litigation, that each was
employed in a grade other than 4 or 5, and that they were bound by
the determination that there was no proof of any classwide
discrimination above grade 5. The District Court denied the motion
to dismiss, but certified its order for interlocutory appeal under
28 U.S.C. § 1292(b). The Bank's interlocutory appeal from the order
was then consolidated with the Bank's pending appeal in the Cooper
litigation.

															The United States Court of Appeals for the Fourth Circuit
reversed the District Court's judgment on the merits in the Cooper
litigation, concluding that (1) there was insufficient evidence to
establish a pattern or practice of racial discrimination in grades
4 and 5, and (2) two of the intervening plaintiffs had not been
discriminated against on account of race. EEOC v. Federal
Reserve Bank of Richmond, 698 F.2d 633 (1983). The court
further held that, under the doctrine of res judicata, the
judgment in the Cooper class action precluded the Baxter
petitioners from maintaining their individual race discrimination
claims against the Bank. The court thus reversed the order denying
the Bank's motion to dismiss in the Baxter action, and remanded for
dismissal of the Baxter complaint. We granted certiorari to review
that judgment, 464 U.S. 932 (1983), [ Footnote 6 ] and we now reverse. II Claims of two types were adjudicated in the Cooper litigation.
First, the individual claims of each of the four intervening
plaintiffs have been finally decided in the Bank's favor. [ Footnote 7 ] Those individual decisions
do not, of course, foreclose any other individual claims. Second,
the class claim that the Bank followed "policies and practices" of
discriminating Page 467 U. S. 874 against its employees has also been decided. [ Footnote 8 ] It is that decision on which the
Court of Appeals based its res judicata analysis.

															There is of course no dispute that, under elementary principles
of prior adjudication, a judgment in a properly entertained class
action is binding on class members in any subsequent litigation. See, e.g., Supreme Tribe of Ben-Hur v. Cauble, 255 U. S. 356 (1921); Restatement of Judgments § 86 (1942); Restatement (Second)
of Judgments § 41(1)(e) (1982); see also Fed.Rule
Civ.Proc. 23(c)(3); see generally Moore & Cohn,
Federal Class Actions -- Jurisdiction and Effect of Judgment, 32
Ill.L.Rev. 555 (1938). Basic principles of res judicata (merger and bar or claim preclusion) and collateral estoppel (issue
preclusion) apply. A judgment in favor of the plaintiff class
extinguishes their claim, which merges into the judgment granting
relief. A judgment in favor of the defendant extinguishes the
claim, barring a subsequent action on that claim. A judgment in
favor of either side is conclusive in a subsequent action between
them on any issue actually litigated and determined, if its
determination was essential to that judgment. III A plaintiff bringing a civil action for a violation of 703(a) of
Title VII of the Civil Rights Act of 1964, 78 Stat. 255, as
amended, 42 U.S.C. § 2000e-2(a), has the initial burden of
establishing a prima facie case that his employer
discriminated against him on account of his race, color, religion,
sex, or national origin. A plaintiff meets this initial burden by
offering evidence adequate to create an inference that he was
denied an employment opportunity on the basis of a discriminatory
criterion enumerated in Title VII. Page 467 U. S. 875 A plaintiff alleging one instance of discrimination establishes
a prima facie case justifying an inference of individual
racial discrimination by showing that he (1) belongs to a racial
minority, (2) applied and was qualified for a vacant position the
employer was attempting to fill, (3) was rejected for the position,
and (4) after his rejection, the position remained open and the
employer continued to seek applicants of the plaintiff's
qualifications. McDonnell Douglas Corp. v. Green, 411 U. S. 792 , 411 U. S. 802 (1973). Once these facts are established, the employer must produce
"evidence that the plaintiff was rejected, or someone else was
preferred, for a legitimate, nondiscriminatory reason." Texas
Dept. of Community Affairs v. Burdine, 450 U.
S. 248 , 450 U. S. 254 (1981). At that point, the presumption of discrimination "drops
from the case," id. at 450 U. S. 255 ,
n. 10, and the district court is in a position to decide the
ultimate question in such a suit: whether the particular employment
decision at issue was made on the basis of race. United States
Postal Service Board of Governors v. Aikens, 460 U.
S. 711 , 460 U. S.
714 -715 (1983); Texas Dept. of Community Affairs v.
Burdine, 450 U.S. at 450 U. S. 253 .
The ultimate burden of persuading the trier of fact that the
defendant intentionally discriminated against the plaintiff
regarding the particular employment decision "remains at all times
with the plaintiff," ibid., and in the final analysis, the
trier of fact "must decide which party's explanation of the
employer's motivation it believes." United States Postal
Service Board of Governors v. Aikens, 460 U.S. at 460 U. S.
716 .

															In Franks v. Bowman Transportation Co, 424 U.
S. 747 (1976), the plaintiff, on behalf of himself and
all others similarly situated, alleged that the employer had
engaged in a pervasive pattern of racial discrimination in various
company policies, including the hiring, transfer, and discharge of
employees. In that class action, we held that demonstrating the
existence of a discriminatory pattern or practice established a
presumption that the individual class members had been
discriminated against on account of race. Id. at 424 U. S. 772 .
Proving Page 467 U. S. 876 isolated or sporadic discriminatory acts by the employer is
insufficient to establish a prima facie case of a pattern
or practice of discrimination; rather, it must be established by a
preponderance of the evidence that "racial discrimination was the
company's standard operating procedure -- the regular, rather than
the unusual, practice." Teamsters v. United States, 431 U. S. 324 , 431 U. S. 336 (1977) (footnote omitted). [ Footnote 9 ] While a finding of a pattern or practice of
discrimination itself justifies an award of prospective relief to
the class, additional proceedings are ordinarily required to
determine the scope of individual relief for the members of the
class. Id. at 431 U. S.
361 .

															The crucial difference between an individual's claim of
discrimination and a class action alleging a general pattern or
practice of discrimination is manifest. The inquiry regarding an
individual's claim is the reason for a particular employment
decision, while

															"at the liability stage of a pattern-or-practice trial, the
focus often will not be on individual hiring decisions, but on a
pattern of discriminatory decisionmaking." Id. at 431 U. S. 360 ,
n. 46. See generally Furnco Construction Corp. v. Waters, 438 U. S. 567 , 438 U. S. 575 ,
n. 7 (1978).

															This distinction was critical to our holding in General
Telephone Co. of Southwest v. Falcon, 457 U.
S. 147 (1982), that an individual employee's claim that
he was denied a promotion on racial grounds did not necessarily
make him an adequate representative of a class composed of persons
who had allegedly been refused employment for discriminatory
reasons. We explained:

															"Conceptually, there is a wide gap between (a) an individual's
claim that he has been denied a promotion on discriminatory
grounds, and his otherwise unsupported allegation that the company
has a policy of discrimination, and (b) the existence of a class of
persons who have Page 467 U. S. 877 suffered the same injury as that individual, such that the
individual's claim and the class claims will share common questions
of law or fact and that the individual's claim will be typical of
the class claims. For respondent to bridge that gap, he must prove
much more than the validity of his own claim. Even though evidence
that he was passed over for promotion when several less deserving
whites were advanced may support the conclusion that respondent was
denied the promotion because of his national origin, such evidence
would not necessarily justify the additional inferences (1) that
this discriminatory treatment is typical of petitioner's promotion
practices, (2) that petitioner's promotion practices are motivated
by a policy of ethnic discrimination that pervades petitioner's
Irving division, or (3) that this policy of ethnic discrimination
is reflected in petitioner's other employment practices, such as
hiring, in the same way it is manifested in the promotion
practices." Id. at 457 U. S.
157 -158. After analyzing the particulars of the
plaintiff's claim in that case, we pointed out that, if

															"one allegation of specific discriminatory treatment were
sufficient to support an across-the-board attack, every Title VII
case would be a potential companywide class action." Id. at 457 U. S. 159 .
We further observed:

															"In this regard, it is noteworthy that Title VII prohibits
discriminatory employment practices, not an abstract policy of
discrimination. The mere fact that an aggrieved private plaintiff
is a member of an identifiable class of persons of the same race or
national origin is insufficient to establish his standing to
litigate on their behalf all possible claims of discrimination
against a common employer." Id. at 457 U. S. 159 ,
n. 15. Falcon thus holds that the existence of a valid
individual claim does not necessarily warrant the conclusion that
the individual plaintiff may successfully maintain a class action.
It Page 467 U. S. 878 is equally clear that a class plaintiff's attempt to prove the
existence of a companywide policy, or even a consistent practice
within a given department, may fail even though discrimination
against one or two individuals has been proved. The facts of this
case illustrate the point.

															The District Court found that two of the intervening plaintiffs,
Cooper and Russell, had both established that they were the victims
of racial discrimination but, as the Court of Appeals noted, they
were employed in grades higher than grade 5, and therefore their
testimony provided no support for the conclusion that there was a
practice of discrimination in grades 4 and 5. [ Footnote 10 ] Given the burden of establishing a prima facie case of a pattern or practice of
discrimination, it was entirely consistent for the District Court
simultaneously to conclude that Cooper and Russell had valid
individual claims, even though it had expressly found no proof of
any classwide discrimination above grade 5. It could not be more
plain that the rejection of a claim of classwide discrimination
does not warrant the conclusion that no member of the class could
have a valid individual claim. "A racially balanced workforce
cannot immunize an employer from liability for specific acts of
discrimination." Furnco Construction Corp. v. Waters, 438
U.S. at 438 U. S.
579 .

															The analysis of the merits of the Cooper litigation by the Court
of Appeals is entirely consistent with this conclusion. In essence,
the Court of Appeals held that the statistical Page 467 U. S. 879 evidence, buttressed by expert testimony and anecdotal evidence
by three individual employees in grades 4 and 5, was not sufficient
to support the finding of a pattern of bankwide discrimination
within those grades. It is true that the Court of Appeals was
unpersuaded by the anecdotal evidence; it is equally clear,
however, that it did not regard two or three instances of
discrimination as sufficient to establish a general policy.
[ Footnote 11 ] It quite
properly recognized that a

															"court must be wary of a claim that the true color of a forest
is better revealed by reptiles hidden in the weeds than by the
foliage of Page 467 U. S. 880 countless freestanding trees." NAACP v. Claiborne Hardware Co., 458 U.
S. 886 , 458 U. S. 934 (1982). Conversely, a piece of fruit may well be bruised without
being rotten to the core.

															The Court of Appeals was correct in generally concluding that
the Baxter petitioners, as members of the class represented by the
intervening plaintiffs in the Cooper litigation, are bound by the
adverse judgment in that case. The court erred, however, in the
preclusive effect it attached to that prior adjudication. That
judgment (1) bars the class members from bringing another class
action against the Bank alleging a pattern or practice of
discrimination for the relevant time period and (2) precludes the
class members in any other litigation with the Bank from
relitigating the question whether the Bank engaged in a pattern and
practice of discrimination against black employees during the
relevant time period. The judgment is not, however, dispositive of
the individual claims the Baxter petitioners have alleged in their
separate action. Assuming they establish a prima facie case of discrimination under McDonnell Douglas, the Bank
will be required to articulate a legitimate reason for each of the
challenged decisions, and if it meets that burden, the ultimate
questions regarding motivation in their individual cases will be
resolved by the District Court. Moreover, the prior adjudication
may well prove beneficial to the Bank in the Baxter action: the
determination in the Cooper action that the Bank had not engaged in
a general pattern or practice of discrimination would be relevant
on the issue of pretext. See McDonnell Douglas, 411 U.S.
at 411 U. S.
804 -805.

															The Bank argues that permitting the Baxter petitioners to bring
separate actions would frustrate the purposes of Rule 23. We think
the converse is true. The class action device was intended to
establish a procedure for the adjudication of common questions of
law or fact. If the Bank's theory were adopted, it would be
tantamount to requiring that every member of the class be permitted
to intervene to litigate the merits of his individual claim. Page 467 U. S. 881 It is also suggested that the District Court had a duty to
decide the merits of the individual claims of class members, at
least insofar as the individual claimants became witnesses in the
joint proceeding and subjected their individual employment
histories to scrutiny at trial. [ Footnote 12 ] Unless these claims are decided in the main
proceeding, the Bank argues that the duplicative litigation that
Rule 23 was designed to avoid will be encouraged, and that
defendants will be subjected to the risks of liability without the
offsetting benefit of a favorable termination of exposure through a
final judgment.

															This argument fails to differentiate between what the District
Court might have done and what it actually did. The District Court
did actually adjudicate the individual claims of Cooper and the
other intervening plaintiffs, as well as the class claims, but it
pointedly refused to decide the individual claims of the Baxter
petitioners. Whether the issues framed by the named parties before
the court should be expanded to encompass the individual claims of
additional class members is a matter of judicial administration
that should be decided in the first instance by the District Court.
Nothing in Rule 23 requires as a matter of law that the District
Court make a finding with respect to each and every matter on which
there is testimony in the class action. Indeed, Rule 23 is
carefully drafted to provide a mechanism for the expeditious
decision of common questions. Its purposes might well 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. We do not find the District Court's denial of the
Baxter petitioners' motion for leave to intervene in the Cooper
litigation, or its decision not to make findings regarding the
Baxter petitioners' testimony in the Cooper litigation, to be
inconsistent with Rule 23. Page 467 U. S. 882 The judgment of the Court of Appeals is reversed, and the case
is remanded for further proceedings consistent with this
opinion. It is so ordered. JUSTICE MARSHALL concurs in the judgment.

															JUSTICE POWELL took no part in the decision of this case.

															[ Footnote 1 ]

															The Bank is organized pursuant to a federal statute, 12 U.S.C. §
341, that enables it to sue and be sued, to appoint its own
employees, and to define their duties.

															[ Footnote 2 ]

															Sylvia Cooper, Constance Russell, Helen Moore, and Elmore
Hannah, Jr., sometimes referred to by the District Court as the
"intervening plaintiffs" and by the parties as the "Cooper
petitioners." In our order granting certiorari, we declined to
review two questions that were presented by these parties. 464 U.S.
932 (1983).

															[ Footnote 3 ]

															App. to Pet. for Cert. 200a (brackets in original).
Certification was also sought for a class of female employees, but
the District Court concluded that the evidence did not warrant the
certification of a class with respect to the claims of sex
discrimination. Id. at 200a, n. 1.

															[ Footnote 4 ]

															The actual text of the critical paragraphs of the notice read as
follows:

															"3. The class of persons who are entitled to participate in this
action as members of the class represented by the
plaintiff-intervenors, for whom relief may be sought in this action
by the plaintiff-intervenors and who will be bound by the
determination in this action is defined to include: all black
persons who were employed by the Federal Reserve Bank of Richmond
at its Charlotte Branch Office at any time since January 3,
1974."

															"4. If you fit in the definition of the class in paragraph 3,
you are a class member. As a class member, you are entitled to
pursue in this action any claim of racial discrimination in
employment that you may have against the defendant. You need to do
nothing further at this time to remain a member of the class.
However, if you so desire, you may exclude yourself from the class
by notifying the Clerk, United States District Court, as provided
in paragraph 6 below."

															"5. If you decide to remain in this action, you should be
advised that: the court will include you in the class in this
action unless you request to be excluded from the class in writing;
the judgment in this case, whether favorable or unfavorable to the
plaintiff and the plaintiff-intervenors, will include all members
of the class; all class members will be bound by the judgment or
other determination of this action; and if you do not request
exclusion, you may appear at the hearings and trial of this action
through the attorney of your choice."

															"6. If you desire to exclude yourself from this action, you will
not be bound by any judgment or other determination in this action
and you will not be able to depend on this action to toll any
statutes of limitations on any individual claims you may have
against the defendant. You may exclude yourself from this action by
notifying the Clerk in writing that you do not desire to
participate in this action. The Clerk's address is: Clerk, United
States District Court, Post Office Box 1266, Charlotte, North
Carolina 28232."

															App. 35a-37a.

															[ Footnote 5 ]

															In addition to Baxter, they were Brenda Gilliam, Glenda Knott,
Emma Ruffin, Alfred Harrison, and Sherri McCorkle. All of these
individuals, sometimes referred to as the "Baxter petitioners,"
stipulated that they received the notice. See id. at
95a.

															[ Footnote 6 ]

															As noted, n 2, supra, our limited grant of certiorari does not encompass
the questions raised by the Cooper petitioners concerning the Court
of Appeals' disposition of the merits of their case.

															[ Footnote 7 ]

															Two of those claims were rejected by the District Court and two
by the Court of Appeals; all four of those determinations are now
equally final.

															[ Footnote 8 ]

															The District Court rejected all of the class claims except that
pertaining to grades 4 and 5; the claim on behalf of that subclass
was rejected by the Court of Appeals. Again, that distinction
between subclasses is no longer significant, for the entire class
claim has now been decided.

															[ Footnote 9 ]

															Although Teamsters involved an action litigated on the
merits by the Government as plaintiff under § 707(a) of the Act, it
is plain that the elements of a prima facie pattern-or-practice case are the same in a private class action. See Teamsters v. United States, 431 U.S. at 431 U. S.
358 -360.

															[ Footnote 10 ]

															The Court of Appeals wrote:

															"In denying the motion, the District Court stated that all
intervenors 'in grades higher than grade 5' were not members of the
class in whose favor the District Court had found 'classwide
discrimination.' By this test, Cooper, Moore, Russell, Baxter,
Gilliam, Knott and McCorkle were not members of the class in which
discrimination was found, and their testimony could not have been
included within the District Court's term 'oral testimony of class
members,' complaining of promotion out of either pay grade 4 or pay
grade 5; only the testimony of Ruffin and Harrison met that
qualifying standard." EEOC v. Federal Reserve Bank of Richmond, 698 F.2d 633,
644 (1983).

															[ Footnote 11 ]

															It wrote:

															"The claim here is a pattern or practice of intentional
discrimination against an entire group by treating it less
favorably because of race. That is the typical disparate treatment
case. This case should accordingly be properly treated as such.
However, the result reached by us would not be substantially
different whether the class action be considered as a disparate
impact or a disparate treatment case." Id. at 639.

															"This case accordingly presents quite a contrast with Teamsters, where the 'oral testimony of class members'
demonstrated 40 cases of specific instances of discrimination in
support of the statistical evidence offered by plaintiffs, or with
that in our own case of Chisholm v. United States Postal
Service, 665 F.2d 482, 495 (4th Cir.1981), where there were 20
'class members' testifying of individual discrimination. Here all
we have is the testimony of but two class members testifying of
individual discrimination in promotion out of either pay grade 4 or
pay grade 5 on which a finding of discriminatory practices can be
rested. This is even less of a presentation of oral testimony in
support of a pattern of discrimination than that found wanting in Ste. Marie v. Eastern R. Ass'n., 650 F.2d 395, 405-06 (2d
Cir.1981), where the Court declared that the small number of
incidents of discrimination in promotion over a period of years in
that case 'would be insufficient to support the inference of a
routine or regular practice of discrimination . . . ,' or, in Goff v. Continental Oil Co., 678 F.2d 593, 597 (5th
Cir.1982), where the Court held that"

															"even if all three witnesses' accounts of racial discrimination
were true, this evidence would not have been enough to prove a
pattern or practice of company-wide discrimination by Conoco."

															"It follows that these two incidents of failure to promote
Ruffin or Harrison, even if regarded as discriminatory, (which we
assume only arguendo ), would not support the District
Court's finding of a pattern of class discrimination in promotions
out of grades 4 and 5." Id. at 643-644 (footnotes omitted).

															[ Footnote 12 ]

															We find the Bank's contention that the District Court actually
found against the Baxter petitioners on the basis of the testimony
in the Cooper action wholly without merit.