## Facts

- Ohio Cellular Products Corp. (OCP) sued Adams USA, Inc. for patent infringement.
- The district court dismissed OCP’s claims and awarded Adams costs and attorney’s fees, relying on findings of inequitable conduct attributed to OCP and involving Donald Nelson, OCP’s president and sole shareholder.
- After judgment, Adams sought to ensure collectability by moving to (1) amend the pleadings to add Nelson as a party and (2) amend the judgment to make Nelson personally liable for the existing fee award.
- The district court granted both requests at once: it added Nelson as a party and immediately entered an amended judgment holding him personally liable.
- The Federal Circuit affirmed, reasoning that adding a party postjudgment was unusual but acceptable because Nelson had not shown prejudice.
- The Supreme Court granted review.

## Issues

1. Whether due process and the Federal Rules permit a court to add an individual as a new party by amended pleading and, in the same action, enter judgment against that individual without allowing an opportunity to respond.
2. Whether the absence of demonstrated “prejudice” can substitute for notice and an opportunity to be heard before imposing personal liability.

## Decision

- The Supreme Court reversed and remanded.
- Due process, as implemented through the Federal Rules, required that Nelson be given an opportunity to respond and contest personal liability after being added as a party and before judgment was entered against him.
- The district court erred by moving directly from amendment of the pleadings to entry of judgment against the newly added party.
- The Court rejected the Federal Circuit’s prejudice-based rationale; judgment cannot rest on speculation that the party would have lost even if properly charged and heard.

## Legal Principles

- The Federal Rules of Civil Procedure are designed to further the due process of law guaranteed by the Constitution.
- A person newly added as a party must receive notice and a meaningful opportunity to respond to the amended pleading before personal liability may be imposed.
- Rule 15’s authorization of amended pleadings does not permit bypassing the procedural sequence that follows amendment; the litigation must proceed so the added party can answer or otherwise respond.
- Rule 12 mechanisms for defenses and responsive pleadings reflect the same due-process requirement; courts may not enter judgment before the added party has a chance to use them.
- Issue preservation does not require specific verbal formulas; it is sufficient if the trial court is fairly alerted to the substance of the objection.

## Conclusion

A court may not impose a personal judgment on an individual at the moment the individual is first added as a party; due process and the Federal Rules require time and a real opportunity to respond and contest liability before judgment.


Nelson v. Adams USA, Inc., 529 U.S. 460 (2000)