## Facts

- Marc B. Goodman, a lobbyist/consultant, contracted in April 1998 with Tracer Research Corp. to seek regulatory exemptions for Tracer’s chemical tracers from certain Clean Air Act requirements.
- The compensation scheme was performance-based and tied to the number of tracers exempted, using contractual percentage and reasonableness standards rather than a fixed payment date.
- On December 19, 2000, the EPA informed Tracer that 20 tracers were not fuel additives and therefore were exempt from particular testing requirements.
- Goodman alleged the EPA determination triggered an obligation to pay him $650,000, but he received only $30,000.
- After the contract, Praxair Services, Inc. acquired Tracer and merged it into Praxair Services; Praxair Services was a wholly owned subsidiary of Praxair, Inc.
- On December 18, 2003, Goodman sued Praxair, Inc. in Maryland state court for breach of contract and under the Maryland Wage Payment and Collection Act, alleging Praxair, Inc. was Tracer’s successor.
- The case was removed to federal court; Praxair, Inc. asserted it was not Tracer’s successor and that Praxair Services was the successor.
- Goodman amended the complaint to add Praxair Services as a defendant after the limitations period would have expired if measured from the EPA letter date.

## Issues

1. Whether dismissal under Rule 12(b)(6) was proper because the pleadings conclusively showed the claims were barred by Maryland’s three-year limitations period for contract actions.
2. Whether the amendment adding Praxair Services after the limitations period related back under Federal Rule of Civil Procedure 15(c) because the original failure to name Praxair Services resulted from a mistake about the proper party’s identity and Praxair Services had timely notice.

## Decision

- The Fourth Circuit reversed and remanded.
- The court held the limitations bar was not apparent from the face of the amended complaint, making Rule 12(b)(6) dismissal on limitations grounds improper.
- The court held the amendment adding Praxair Services related back under Rule 15(c) because the claim arose from the same conduct and Praxair Services had timely notice and should have known it would have been named but for a mistake about the proper defendant.

## Legal Principles

- A statute of limitations is ordinarily an affirmative defense; dismissal at the pleading stage is proper only when the complaint itself conclusively shows the action is time-barred.
- In a breach of contract case, if the pleadings do not unambiguously establish when breach or accrual occurred, limitations cannot be resolved on a Rule 12(b)(6) motion.
- Under Rule 15(c), an amendment that changes a party or the naming of a party relates back when: (1) the amended claim arises from the same transaction or occurrence, (2) within the Rule 4(m) period the added party received notice such that it is not prejudiced in defending, and (3) the added party knew or should have known it would have been sued but for a mistake concerning identity.
- Misidentifying a closely related corporate entity (such as naming a parent instead of a wholly owned subsidiary that is the successor) can qualify as a Rule 15(c) “mistake” when the added entity had timely notice and expected it was the intended defendant.

## Conclusion

The Fourth Circuit held that the pleadings did not conclusively establish a limitations bar and that Rule 15(c) permitted relation back where the plaintiff sued the wrong but closely related corporate entity and the correct successor entity had timely notice and should have expected to be named.


Goodman v. Praxair, Inc., 494 F.3d 458 (4th Cir. 2007)