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Curtiss-Wright Corp. v. General Electric Co.

Supreme Court of the United States · 1980 · Civil Procedure

Civil ProcedureRule 54(b)Final JudgmentAppellate ReviewFederal Rule of Civil Procedure 54(b)multiple claimsfinal judgmentno just reason for delay

Facts

General Electric and Curtiss-Wright had 21 contracts, and Curtiss-Wright sued over fraud, misrepresentation, breach of contract, and also sought $19 million in an outstanding balance due on contracts already performed. General Electric counterclaimed for costs and unjust enrichment arising from alleged extraordinary efforts during contract performance. As to the $19 million claim, the only dispute was whether release clauses in the contracts barred immediate payment while Curtiss-Wright's other claims remained pending. The District Court rejected that argument, granted summary judgment on the undisputed balance, awarded prejudgment interest at 6%, and then certified the judgment under Rule 54(b) after finding the adjudicated claim separate and delay inequitable.

Issue

Whether a district court abuses its discretion under Federal Rule of Civil Procedure 54(b) by certifying as final a judgment on one claim when nonfrivolous counterclaims that might support a setoff remain pending. More specifically, the question was whether the court of appeals may effectively require unusual or harsh circumstances before affirming such a certification.

Rule

Under Rule 54(b), a district court must first determine that it has entered a final judgment, meaning an ultimate disposition of an individual claim in a multiple-claims action. It must then determine whether there is no just reason for delay by considering both judicial administrative interests and the equities involved, including such matters as separability of the adjudicated and pending claims and whether later appeals would require repetitive consideration of the same issues. Counterclaims are not treated differently from other claims; their significance depends on their interrelationship with the certified claim. On appeal, once juridical concerns are satisfied, the district court's balancing of the equities is entitled to substantial deference and should be disturbed only if clearly unreasonable.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

In federal court in Chicago, Nina Romero sued Lakefront Systems LLC on three separate contracts and also alleged fraud in negotiating a fourth deal. The judge granted summary judgment to Nina on one contract count for a fixed unpaid invoice, but left unresolved the amount of prejudgment interest on that count while the other claims remained pending.

If Nina asks the court to certify that ruling under Rule 54(b), what is the best answer?

Explanation. Rule 54(b) requires a two-step inquiry. First, there must be a final judgment, meaning an ultimate disposition of an individual claim in a multiple-claims action. A ruling that leaves part of that claim still to be decided is not yet final. The majority opinion noted that an earlier certification motion had been denied when prejudgment interest had not yet been resolved, showing that unresolved interest can prevent finality. Only after finality exists may the court consider whether there is no just reason for delay.