Nelson v. Adams USA, Inc., 529 U.S. 460, 4 (2000)

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Cite as: 529 U. S. 460 (2000)

Opinion of the Court

holder of OCP, in his individual capacity. In pursuit of that objective, Adams moved under Rule 15 of the Federal Rules of Civil Procedure to amend its pleading to add Nelson as a party; Adams also asked the court, under Rule 59(e), to amend the fee award. The District Court granted the motion in full, simultaneously making Nelson a party and subjecting him to judgment. The Court of Appeals affirmed. We hold that the District Court erred in amending the judgment immediately upon permitting amendment of the pleading. Due process, as reflected in Rule 15 as well as Rule 12, required that Nelson be given an opportunity to respond and contest his personal liability for the award after he was made a party and before the entry of judgment against him.

I

OCP and its successor corporation held two patents relating to the method of manufacturing a foamed padding used in athletic equipment. In 1994, OCP sued Adams for infringement. Adams maintained that the patents had been anticipated by prior art and were therefore invalid under 35 U. S. C. § 102(b). The District Court ruled in Adams' favor and dismissed the infringement complaint.

Adams then moved for attorney fees and costs. The District Court granted the motion on the ground that Nelson, who was at all relevant times president and sole shareholder of OCP, had deceitfully withheld the prior art from the United States Patent and Trademark Office. This behavior, the District Court concluded, constituted inequitable conduct chargeable to OCP. On January 20, 1998, the District Court awarded Adams costs and fees in the amount of $178,888.51 against OCP.

Adams feared, however, that it would be unable to collect the award. This was an altogether understandable concern; it stemmed from a letter OCP's counsel had sent Adams warning that OCP would be liquidated if exposed to a judgment for fees more than nominal in amount. Adams there-

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