This section contains the nature of the case and procedural background.

P is the sole shareholder of FontBank, Inc. P and FontBank entered into a distribution agreement for an electronic marketing device offered through P to its subscribers. In 1996 FontBank sued P in state court for breach of contract. P then filed an action for a declaratory judgment, defamation, intentional interference with contractual relations, and violations of the Ohio Deceptive Trade Practices Act in federal court against both FontBank and P in an alleged attempt to combine all the relevant issues in one proceeding. The district court found P's requests for a declaratory judgment to be compulsory counterclaims in the state court action. P filed counterclaims for defamation, intentional interference with business and contractual relations, and violations of Ohio and Illinois business practices acts. Both parties moved for more definite statements. Without seeking leave of the court as required under FED. R. CIV. P. 15(a). P refiled the same answer with the addition of six new counterclaims. The judge sua sponte dismissing without prejudice P's original four counterclaims, under authority from Rule 16(c) and granted P's motion to strike the six counterclaims added in the Second Amended Answer. FontBank registered as a foreign corporation in Ohio, and P motioned to dismiss its federal court complaint without prejudice. P's action was dismissed with prejudice. D appealed the dismissal of both his and P's claims.

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