## Facts

- General Electric Co. (GE) and Curtiss-Wright Corp. entered into 21 contracts (1968–1972) for components for nuclear-powered naval vessels, totaling about \$215 million.
- Curtiss-Wright sued GE in federal court under diversity jurisdiction (D.N.J.), alleging fraud, misrepresentation, and breach of contract and seeking damages and reformation.
- One claim sought approximately \$19 million as the unpaid balance on contracts already performed.
- GE asserted counterclaims seeking about \$1.9 million for alleged extra costs and about \$52 million for alleged unjust enrichment.
- Each contract contained a release clause stating that, as a condition precedent to final payment, the seller released the buyer and the government from liabilities and claims arising under the order.
- The district court granted Curtiss-Wright summary judgment on the \$19 million balance due (plus prejudgment interest at a 6% statutory rate), rejecting GE’s argument that the release clause barred payment while other claims remained pending.
- The district court then entered partial final judgment under Federal Rule of Civil Procedure 54(b), expressly finding “no just reason for delay,” citing separability of the resolved claim, low risk of duplicative appeals, and economic harm from delaying payment when market interest rates exceeded the statutory prejudgment rate.
- The Third Circuit dismissed the appeal, holding Rule 54(b) certification was an abuse of discretion because GE’s counterclaims created a possibility of setoff and, absent harsh or unusual circumstances, the status quo should be maintained.

## Issues

1. Whether the district court abused its discretion by certifying a partial final judgment under Rule 54(b) on Curtiss-Wright’s \$19 million claim despite unresolved counterclaims that could yield a setoff.
2. What deference a court of appeals must give a district court’s determination that there is “no just reason for delay” under Rule 54(b).

## Decision

- The Supreme Court unanimously reversed the Third Circuit.
- The Court held the district court did not abuse its discretion in granting Rule 54(b) certification.
- The Court rejected a near-categorical rule that substantial counterclaims or potential setoff generally bar certification absent harsh or unusual circumstances.
- The Court concluded the district court permissibly considered both judicial-administration concerns (finality, separability, duplication risk) and equitable factors (economic loss from delayed payment and interest-rate disparity).

## Legal Principles

- Rule 54(b) permits entry of final judgment on fewer than all claims only if (1) the judgment is final as to an entire claim and (2) the court expressly determines there is no just reason for delay.
- The “no just reason for delay” determination is discretionary and requires balancing sound judicial administration and the equities of the case.
- Courts of appeals must give substantial deference to a district court’s Rule 54(b) determination and may reverse only for clear abuse of discretion.
- The mere presence of unresolved counterclaims or the possibility of setoff does not automatically make Rule 54(b) certification improper, particularly where claims are separable and the district court reasonably assesses collection and fairness concerns.

## Conclusion

The Court held that Rule 54(b) certification is a case-specific, discretionary judgment committed primarily to the district court; potential setoff from pending counterclaims does not itself defeat certification when the resolved claim is final, separable, and immediate appeal serves efficient administration and equitable interests.


Curtiss-Wright Corp. v. Gen. Elec. Co., 446 U.S. 1 (1980)