UNPUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

No. 09-2135

CSX TRANSPORTATION, INCORPORATED,

Plaintiff - Appellant,

v.

ROBERT V. GILKISON; PEIRCE, RAIMOND & COULTER, PC, a/k/a 

Robert Peirce & Associates, P.C., a Pennsylvania 

Professional Corporation; JOHN DOES; ROBERT N. PEIRCE, JR.; 

LOUIS A. RAIMOND; MARK T. COULTER; RAY A. HARRON, Dr.,

Defendants – Appellees,

and

RICHARD CASSOFF, M.D.,

Party-in-Interest,

LUMBERMENS MUTUAL CASUALTY COMPANY,

Intervenor.

----------------------------------

AMERICAN SOCIETY OF RADIOLOGIC TECHNOLOGISTS; AMERICAN TORT 

REFORM ASSOCIATION; ASSOCIATION OF AMERICAN RAILROADS; 

DANIEL E. BANKS; COALITION FOR LITIGATION JUSTICE, 

INCORPORATED; ALFRED FRANZBLAU; LAWRENCE MARTIN; NATIONAL 

ASSOCIATION OF MANUFACTURERS; PROPERTY CASUALTY INSURERS 

ASSOCIATION OF AMERICA; VIRGINIA SOCIETY OF RADIOLOGIC 

TECHNOLOGISTS; WASHINGTON LEGAL FOUNDATION; WEST VIRGINIA 

CHAMBER OF COMMERCE,

Amici Supporting Appellant.
2

Appeal from the United States District Court for the Northern 

District of West Virginia, at Wheeling. Frederick P. Stamp,

Jr., Senior District Judge. (5:05-cv-00202-FPS-JES)

Argued: October 26, 2010 Decided: December 30, 2010

Before DUNCAN, AGEE, and DAVIS, Circuit Judges.

Affirmed in part, vacated in part, and remanded by unpublished

per curiam opinion. Judge Davis wrote a separate concurring 

opinion.

ARGUED: Dan Himmelfarb, MAYER BROWN, LLP, Washington, D.C., for 

Appellant. Walter P. DeForest, III, DEFOREST KOSCELNIK YOKITIS 

KAPLAN & BERARDINELLI, Pittsburgh, Pennsylvania, for Appellees. 

ON BRIEF: Evan M. Tager, Michael B. Kimberly, MAYER BROWN, LLP, 

Washington, D.C.; E. Duncan Getchell, Jr., Samuel L. Tarry, Jr., 

Mitchell K. Morris, MCGUIREWOODS LLP, Richmond, Virginia; Marc 

E. Williams, Robert L. Massie, NELSON MULLINS RILEY & 

SCARBOROUGH LLP, Huntington, West Virginia, for Appellant. 

Robert A. Lockhart, SCHUDA & ASSOCIATES, PLLC, Charleston, West 

Virginia, David J. Berardinelli, Matthew S. McHale, DEFOREST 

KOSCELNIK YOKITIS KAPLAN & BERARDINELLI, Pittsburgh, 

Pennsylvania, for Appellees Peirce, Raimond & Coulter, PC, 

Robert N. Peirce, Jr., Louis A. Raimond, and Mark T. Coulter; 

Lawrence S. Goldman, Elizabeth M. Johnson, LAW OFFICES OF 

LAWRENCE S. GOLDMAN, New York, New York, Jerald E. Jones, WEST & 

JONES, Clarksburg, West Virginia, Ron Barroso, Corpus Christi, 

Texas, for Appellee Ray A. Harron; John E. Gompers, GOMPERS, 

MCCARTHY & MCCLURE, Wheeling, West Virginia, Stanley W. 

Greenfield, GREENFIELD & KRAUT, Pittsburgh, Pennsylvania, for 

Appellee Robert V. Gilkison. David P. Goch, Heidi K. Abegg, 

WEBSTER CHAMBERLAIN & BEAN, Washington, D.C., for American 

Society of Radiologic Technologists and Virginia Society of 

Radiologic Technologists; Ashley C. Parrish, Candice Chiu, KING 

& SPALDING LLP, Washington, D.C., for American Society of 

Radiologic Technologists, Amici Supporting Appellant. Mark A. 

Behrens, Cary Silverman, SHOOK, HARDY & BACON, LLP, Washington, 

D.C.; H. Sherman Joyce, AMERICAN TORT REFORM ASSOCIATION, 

Washington, D.C.; Ann W. Spragens, Sean McMurrough, PROPERTY 

CASUALTY INSURERS ASSOCIATION OF AMERICA, Des Plaines, Illinois; 

Quentin Riegel, NATIONAL ASSOCIATION OF MANUFACTURERS, 

Washington, D.C.; Daniel Saphire, ASSOCIATION OF AMERICAN 
3

RAILROADS, Washington, D.C., for American Tort Reform 

Association, Association of American Railroads, Coalition for 

Litigation Justice, Incorporated, National Association of 

Manufacturers, and Property Casualty Insurers Association of 

America, Amici Supporting Appellant. David Craig Landin, Cheryl 

G. Ragsdale, HUNTON & WILLIAMS LLP, Richmond, Virginia, for 

Daniel E. Banks, Alfred Franzblau, and Lawrence Martin, Amici 

Supporting Appellant. Daniel J. Popeo, Richard A. Samp, 

WASHINGTON LEGAL FOUNDATION, Washington, D.C., for Washington 

Legal Foundation, Amicus Supporting Appellant. Scott L. 

Winkelman, Michael L. Martinez, Robert L. Willmore, Jennifer G. 

Knight, CROWELL & MORING LLP, Washington, D.C., for West 

Virginia Chamber of Commerce, Amicus Supporting Appellant.

Unpublished opinions are not binding precedent in this circuit.
4

PER CURIAM:

CSX Transportation, Incorporated (“CSX”) filed a complaint 

against Robert V. Gilkison (“Gilkison”), Peirce, Raimond & 

Coulter, P.C. (“Peirce firm”), Robert N. Peirce, Jr. (“Peirce”), 

Louis A. Raimond (“Raimond”), Mark T. Coulter (“Coulter”), and 

Ray Harron, M.D. (“Harron”), alleging violations of the 

Racketeer Influenced and Corrupt Organizations Act (“RICO”), 18 

U.S.C. § 1961, et seq., common law fraud, and civil conspiracy, 

all “aris[ing] from the successful efforts of the defendants to 

deliberately fabricate and prosecute objectively unreasonable, 

false and fraudulent asbestosis claims against CSX.” (J.A. 143).1

The district court granted defendants’ motion to dismiss as 

to the RICO counts and as to all but two fraud counts. On 

appeal, CSX contends that the district court erred by dismissing 

those RICO and fraud claims, abused it discretion by denying CSX 

leave to amend its complaint, erred by granting the defendants’ 

motion for summary judgment on one remaining fraud count, and 

abused its discretion by excluding certain evidence during trial 

on another fraud count. For the following reasons, we affirm in 

part and vacate in part the district court’s judgment and remand 

the case for further proceedings. 

 1 We refer to the individuals Peirce, Raimond, and Coulter 

collectively as the “lawyer defendants” in keeping with the use 

of that convention by the parties and the district court.
5

I.

In its first amended complaint (hereinafter “complaint”),2

In order to perpetrate this alleged scheme, CSX contends

“the lawyer defendants gained access to potential clients 

through unlawful means, [and] retained clients and procured 

medical diagnoses for them through intentionally unreliable mass 

screenings.” (J.A. 145-46). CSX charges that the screenings 

were unreliable, in part, because “[t]he lawyer defendants . . . 

deliberately hired unreliable doctors such as . . . Harron to 

‘read’ the x-rays for signs of asbestosis.” (J.A. 148). In the 

complaint, CSX averred that, Harron “agreed to read unusually 

high numbers of x-rays with reckless or deliberate disregard for 

CSX alleges that the defendants—a law firm, certain attorneys,

an investigator, and a medical expert, all employed by the law 

firm—“embarked upon a calculated and deliberate strategy to 

participate in and to conduct the affairs of the Peirce firm 

through a pattern and practice of unlawful conduct, including 

bribery, fraud, conspiracy, and racketeering,” (J.A. 145), by 

“orchestrat[ing] a scheme to inundate CSX[] and other entities 

with thousands of asbestosis cases without regard to their 

merit.” (J.A. 142).

 2 CSX’s original complaint was dismissed without prejudice, 

and CSX was granted leave to amend.
6

their true content with the full knowledge that the lawyer 

defendants intended to file personal injury claims based on his 

diagnoses.” (J.A. 163). Ultimately, CSX alleges that defendants 

used this scheme to “fabricate[] and prosecute[] asbestosis 

claims with no basis in fact.” (J.A. 146). 

The complaint specifies nine personal injury suits the 

Peirce firm filed against CSX on behalf of former CSX employees, 

which CSX alleges to have been “a deliberate effort by the 

lawyer defendants to defraud CSX[].” (J.A. 160). Count 1 of the 

complaint charged the lawyer defendants with violating RICO as 

to each of the nine suits while Count 2 charged a RICO 

conspiracy as to those suits. Count 3 charged the lawyer 

defendants, individually, with common law fraud as to each of 

the nine suits. Count 4 charged the lawyer defendants and 

Harron with common law civil conspiracy as to each of the nine 

suits, and Counts 5 and 6 charged Gilkison and the Peirce firm

with conspiracy and fraud as to the so-called “May/Jayne 

Incident,” infra. 

The defendants moved pursuant to Federal Rule of Civil 

Procedure 12(b)(6) to dismiss Counts 1 through 4 and Count 6 of 

the complaint. The district court granted the motion in part 

and denied the motion in part. As to the RICO counts, the 

district court found that because “eight of the nine lawsuits 

that comprise the basis of th[e] claims were filed more than 
7

four years before CSX filed its amended complaint in this case,”

(J.A. 696), and “CSX was on inquiry notice of the injuries 

alleged in Counts 1 and 2 when the nine allegedly fraudulent 

claims against it were filed and/or settled,” (J.A. 698), eight 

of the claims were time-barred. As to the ninth suit, (the 

“Baylor suit” on behalf of Earl Baylor), the district court 

reasoned that since the other eight RICO claims were timebarred, and because proving “[a] ‘pattern of racketeering 

activity’ requires a showing of at least two acts of 

racketeering activity[,] . . . . CSX has failed to show the 

requisite pattern to sustain its RICO claims.” (J.A. 699-700). 

As to the common law fraud and conspiracy counts, the 

district court held that “[t]he foregoing [RICO] statute of 

limitations analysis similarly applies to [those] [c]ounts.” 

(J.A. 700). As a result, the district court concluded that,

“[b]ecause eight of the nine lawsuits . . . were filed more than 

two years before the amended complaint was filed in this case, 

reliance on those suits is time-barred” under West Virginia law.

(J.A. 700). The Baylor suit was not time-barred but decided on 

summary judgment as discussed below. 

The district court denied the motion to dismiss Count 6, 

and the fraud and conspiracy claims arising from the May/Jayne 

Incident proceeded to trial.
8

After the district court’s ruling on the Rule 12(b)(6) 

motion, CSX moved for leave to amend its complaint and proffered

a proposed second amended complaint, which “added [eleven] more 

recent fraudulently filed claims as well as detailed allegations 

concerning the difficulty of discovering the fraud.” 

(Appellant’s Br. 13). The district court denied the motion.

CSX noted a timely appeal as to all its claims, and this 

Court has jurisdiction over the appeal pursuant to 28 U.S.C. § 

1291. 

II.

A.

CSX first contends that the district court erred by 

granting the defendants’ motion to dismiss the RICO and common 

law fraud counts. CSX argues that this Court should adopt the 

so-called “separate accrual rule” for RICO statute of 

limitations purposes, under which “a cause of action accrues 

when new predicate acts occur within the limitations period, 

even if other acts were committed outside the limitations 

period.” (Appellant’s Br. 19) (quotations and alterations

omitted). CSX also asserts that the district court erred by 

concluding that CSX had or should have had notice of its 

injuries, for both the RICO and fraud counts, near the dates the

suits were filed and/or settled. CSX contends that the district 
9

court’s “analysis [on this point] depended upon mistaken 

assumptions about the materials to which CSX[] had access and 

disregarded features of mass asbestos litigation that severely

limited CSX[]’s ability to discover the fraud.” (Appellant’s Br. 

33). Finally, CSX suggests that “a Rule 12(b)(6) motion may be 

granted only in the unusual case in which all facts necessary to 

the defense clearly appear on the face of the complaint,” and

that the case at bar does not meet that standard. (Appellant’s 

Br. 14). 

We review the district court’s grant of the motion to 

dismiss the RICO and common law claims de novo. Monroe v. City 

of Charlottesville, 579 F.3d 380, 385 (4th Cir. 2009). In 

reviewing the order, “we must take the facts in the light most 

favorable to the plaintiff.” E. Shore Markets, Inc. v. J.D. 

Assocs. Ltd. P’ship, 213 F.3d 175, 180 (4th Cir. 2000).

1. RICO Claims

This Court has recognized that a “dismissal [pursuant to a 

Rule 12(b)(6) motion] is inappropriate unless, accepting as true 

the well-pleaded facts in the complaint and viewing them in the 

light most favorable to the plaintiff, ‘it appears to a 

certainty that the plaintiff would be entitled to no relief 

under any state of facts which could be proved in support of his 

claim.’” Brooks v. City of Winston-Salem, 85 F.3d 178, 181 (4th 
10

Cir. 1996) (quoting Mylan Lab., Inc. v. Matkari, 7 F.3d 1130, 

1134 & n.4 (4th Cir. 1993)). We have noted that asserting an 

affirmative defense, like a statute of limitations defense, in a 

motion to dismiss presents a particular “procedural stumbling 

block” for defendants. Richmond, Fredericksburg & Potomac R.R. 

v. Forst, 4 F.3d 244, 250 (4th Cir. 1993). Accordingly, 

a motion to dismiss filed under Federal Rule of 

Procedure 12(b)(6) . . . generally cannot reach the 

merits of an affirmative defense, such as the defense 

that the plaintiff’s claim is time-barred. But in the 

relatively rare circumstances where facts sufficient 

to rule on an affirmative defense are alleged in the 

complaint, the defense may be reached by a motion to 

dismiss filed under Rule 12(b)(6). This principle 

only applies, however, if all facts necessary to the 

affirmative defense “clearly appear[] on the face of 

the complaint.”

Goodman v. Praxair, Inc., 494 F.3d 458, 464 (4th Cir. 2007) 

(quoting Forst, 4 F.3d at 250). “To require otherwise would 

require a plaintiff to plead affirmatively in his complaint 

matters that might be responsive to affirmative defenses even 

before the affirmative defenses are raised.” Id. at 466.

The Supreme Court has held, as did the district court 

below, that the applicable statute of limitations for RICO

violations is four years. See Agency Holding Corp. v. MalleyDuff & Assocs., Inc., 483 U.S. 143, 152 (1987). There is no

contest on this point, as the dispute in this case concerns when 

the injury accrued, that is, when did the four year statute of 

limitations begin to run. See Brooks, 85 F.3d at 181. This 
11

Court has held that “the statutory period [for a RICO claim] 

begins to run when a plaintiff knows or should know of the 

injury that underlies his cause of action.” Pocahontas Supreme 

Coal Co. v. Bethlehem Steel Corp., 828 F.2d 211, 220 (4th Cir. 

1987); see also Rotella v. Wood, 528 U.S. 549, 555 (2000) 

(“[D]iscovery of the injury . . . is what starts the clock.”).

Having set out the applicable law, we turn to the complaint 

to determine whether all the facts necessary to conclude CSX’s 

claims are time-barred appear on its face. In that regard, we 

note the complaint was filed July 5, 2007, so the specific 

inquiry is whether the face of the complaint pleads facts such 

that it clearly appears CSX was on notice of its claimed injury 

by July 4, 2003. We conclude a fair reading of the complaint’s 

allegations does not establish such notice on the face of the 

complaint and therefore the district court erred in granting the 

Rule 12(b)(6) motion. 

The complaint alleges the following with respect to the 

timing of the RICO violations: in December 2003, Peirce was 

linked to a union president who had pled guilty to federal 

racketeering charges; in 2007, Harron lost his medical license; 

the B-reads for the underlying lawsuits ranged from 2000 to 

2003; the dates the underlying lawsuits were filed and settled, 

ranging from 2000 to 2006; several specific alleged acts of mail 

and wire fraud occurring since 2000; and allegations of civil 
12

RICO conspiracy beginning in “the early to mid 1990s.” (J.A. 

163). Viewed in the light most favorable to CSX, it is not at 

all clear from these facts when CSX knew or should have known of 

the alleged RICO violations, that is, when the fraud commenced. 

The district court, however, conflated the filing of the 

various underlying suits as, in and of themselves, putting CSX 

on notice of the fraudulent scheme underlying the RICO counts. 

However, nothing “clearly appears” on the face of the complaint 

to show that the filing of these suits by the lawyer defendants, 

as well as the settlements, establish that CSX knew or ought to 

have known by July 2003 that the alleged fraud was afoot. 

Additional factual development may or may not prove that

premise, but it is not plainly apparent on the face of the 

complaint.

The case at bar is readily distinguishable from the rare 

cases in which this Court has held the district court properly 

dismissed, pursuant to Rule 12(b)(6), a complaint as timebarred. In Brooks, we found that, because it was undisputed 

that the relevant charge of unlawful warrantless arrest 

“accrue[s] on the date of . . . arrest,” the date of arrest was 

included in the complaint, and because “[t]here is no question 

that on the day of his arrest Brooks knew or should have known 

both of the injury . . . and who was responsible for any 

injury,” dismissal on a Rule 12(b)(6) motion was appropriate. 85 
13

F.3d at 182; see also McMullen v. Lewis, 32 F.2d 481, 484 (4th 

Cir. 1929) (“Where upon the face of the bill the staleness of 

the demand is apparent—that is, the claim has remained 

unasserted for 50 years—the question of its antiquity can always 

be called to the court’s attention . . . . [T]he laches of the 

complainant in asserting his claim is a bar in equity, if that 

objection is apparent on the bill itself, there can be no good 

reason for requiring a plea or answer to bring it to the notice 

of the court.” (quotations omitted)). 

In contrast to the foregoing cases in which the complaint 

clearly identified the start date for the running of the statute 

of limitations, the case at bar necessitates a fact-intensive 

inquiry as to when CSX knew or should have known of the

existence of the claimed RICO violations. The fact that an 

underlying asbestos suit was filed or settled, without more, 

does not establish as a matter of law that the separate gravamen 

of RICO fraud should have been known by that event alone. The 

district court thus erred in making the unilateral finding that 

either the date of the filing or of the settlement of the 

underlying lawsuits was dispositive on this question. It does 

not follow from the facts pled on the face of the complaint that

CSX knew or should have known that the underlying asbestos

lawsuits were fraudulently filed when they were filed. Nor does 

reading the face of the complaint show that CSX knew or should 
14

have known of the alleged fraudulent screening scheme when the 

lawsuits were filed or settled.

Accordingly, the case at bar does not qualify as one of the

“rare circumstances,” in which Rule 12(b)(6) dismissal of the 

RICO claims as time-barred was appropriate. Thus, “we conclude 

that the face of the complaint does not allege facts 

sufficiently clear to conclude that the statute of limitations 

had run, and the district court therefore erred in dismissing 

the complaint on that basis.” Goodman, 494 F.3d at 466. 

Instead, we find that in this case “[t]h[is] defense[] [is] more 

properly reserved for consideration on a motion for summary 

judgment,” Forst, 4 F.3d at 250, and we vacate the district 

court’s judgment in so far as it granted the motion to dismiss 

Counts 1 and 2 of the complaint.3

 3 Because we find that the district court erred by 

dismissing the RICO counts for the reasons just described, we do 

not address CSX’s argument regarding the separate accrual rule 

for RICO statute of limitations purposes. 

As a separate matter, since the issue may arise on remand, 

we do note our concern regarding the district court’s apparent 

alternate holding that, “[b]ecause only one alleged act of 

racketeering activity is not time-barred, CSX has failed to show 

the requisite pattern to sustain its RICO claims.” (J.A. 700). 

While we have determined that, at the motion to dismiss stage, 

the district court erred in finding the CSX claims time-barred, 

some of those claims may yet be determined as time-barred at a 

later stage of the proceedings. However, even if a claim or 

claims are found to be time-barred, that fact alone does not 

make the claim ineligible as a predicate act to establish a RICO 

pattern.

(Continued)
15

2. Common Law Fraud Claims

Common law fraud under West Virginia law is the gravamen of 

Counts 3 and 4 of the complaint. West Virginia’s applicable 

statute of limitations for such common law fraud claims is two 

years. See Alpine Prop. Owners Assoc., Inc. v. Mountaintop Dev.

Co., 365 S.E.2d 57, 66 (W. Va. 1987). Similar to a RICO claim, 

a West Virginia fraud claim accrues from “the perpetration of 

the fraud,” or if “there has been fraudulent concealment,” then 

“the statute begins to run only from the time when the wrong was 

discovered, or ought to have been discovered.” Plant v. 

Humphries, 66 S.E. 94, 98 (W. Va. 1909).

Viewed in the light most favorable to CSX, the complaint 

alleges the same facts as to the West Virginia common law fraud 

counts as recounted above regarding the RICO counts. For the 

same reasons discussed above concerning the RICO counts, the 

pled facts do not reveal when CSX knew or should have known of 

the alleged fraud. That is, the face of the complaint does not 

 

In order to demonstrate the requisite pattern of RICO 

activity, the statute permits the contemplation of acts within a 

ten year period. 18 U.S.C. § 1961(5). Thus, even assuming that 

only one of those acts occurred within the statute of 

limitations period, that would not defeat the existence of a 

RICO pattern provided the other predicate act took place within 

the applicable ten year period. Whether all of the injuries 

might independently support an award of damages is a separate 

issue. 
16

plead facts which conclusively show CSX knew or should have 

known of the alleged fraud by July 4, 2005, two years prior to 

the filing of the complaint. 

Our analysis of the error in the district court’s dismissal 

of CSX’s RICO claims likewise applies to its dismissal of the 

common law fraud claims. Accordingly, because the face of the 

complaint does not allege sufficient facts to conclusively 

determine when CSX knew or should have known of the existence of 

the common law fraud, the district court erred by granting 

defendants’ Rule 12(b)(6) motion to dismiss Counts 3 and 4 of 

the complaint.

B.

CSX next contends that the district court abused its 

discretion by denying the motion to file a second amended 

complaint. In denying leave to amend, the district court found 

“that CSX was dilatory in filing this motion for leave” and 

“[m]oreover, this Court finds that CSX’s proposed amendment to 

the complaint would be futile.” (J.A. 791). Referring to its 

earlier decision that the RICO and common law fraud claims were 

time-barred, the district court stated “CSX is charged with 

notice of its injury by March 2000 when the first alleged 

objectively baseless and fraudulent lawsuit was filed against 

it,” and thus the additional claims in the proposed second 
17

amended complaint would likewise be time-barred. (J.A. 792-93). 

Because the district court found that amendment would be futile, 

it also observed that “allowing CSX to file a second amended 

complaint would unduly prejudice the defendants by extending 

discovery when it is not necessary.” (J.A. 795). The district 

court made no finding that CSX acted with a dilatory motive or 

that being dilatory alone would cause any prejudice to the 

defendants.

Because CSX contends that the district court erred in 

dismissing its RICO and fraud claims as time-barred, CSX 

correspondingly argues that amendment of the complaint would not 

have been futile. This is so, CSX argues, because of the seven 

additional claims in the proposed second amended complaint, 

“[o]ne . . . was filed in the same lawsuit as the Baylor claim 

(as to which the district court found no time bar); three were 

filed after the Baylor claim (and thus necessarily raise no time 

bar); and three were filed in the same lawsuit as the Peterson 

and Wiley claims (as to which discovery commenced less than four 

years before CSX[] filed its RICO claims).” (Appellant’s Br. 34-

35). Accordingly, CSX avers that the additional claims 

proffered in the second amended complaint were not time-barred.

This Court reviews a district court’s denial of leave to 

amend for abuse of discretion. United States ex rel. Wilson v. 

Kellog Brown & Root, Inc., 525 F.3d 370, 376 (4th Cir. 2008).
18

Leave to amend “should freely [be given] when justice so 

requires.” Fed. R. Civ. P. 15(a)(2). Thus, “[i]n the absence of 

any apparent or declared reason—such as undue delay, bad faith 

or dilatory motive on the part of the movant, repeated failure 

to cure deficiencies by amendments previously allowed, undue 

prejudice to the opposing party by virtue of allowance of the 

amendment, futility of amendment, etc.—the leave sought should, 

as the rules require, be ‘freely given.’” Foman v. Davis, 371 

U.S. 178, 182 (1962). 

The district court’s finding that amendment would have been 

futile followed solely from its earlier holding in granting the 

motion to dismiss the RICO and fraud counts as time-barred. 

From that basis the district court reasoned that the additional 

claims must likewise be time-barred. However, because we 

determined above that the district court erred by dismissing 

CSX’s RICO and common law fraud claims in the complaint as timebarred, it axiomatically follows that the district court’s

finding of futility based on the later, additional claims was 

erroneous and thereby an abuse of discretion as a matter of law.4

 4 The record supports the district court’s finding that CSX 

was dilatory in offering its second amended complaint. CSX had 

access to the information about the additional eleven asbestos 

cases it now claims were fraudulent when it filed the complaint, 

but, for whatever reason, did not include those claims. 

However, there is no evidence that CSX’s delay was in bad faith 

and, more importantly, “[d]elay alone, without prejudice, does 

(Continued)
19

See Koon v. United States, 518 U.S. 81, 100 (1996) (“A district 

court by definition abuses its discretion when it makes an error 

of law.”).

Likewise, the district court’s finding that amendment would 

be unduly prejudicial to the defendants was based solely on its

finding that the additional claims would be futile. The 

district court found that the defendants would be prejudiced 

because amendment would “extend[] discovery when it is not 

necessary,” (J.A. 795), based only on its conclusion that the 

additional claims were time-barred. Because the district court 

erred in its futility determination, and because that 

determination directly informed the court’s unduly prejudicial 

determination, the court’s unduly prejudicial determination must 

also fail. Accordingly, the district court’s finding that 

amendment would be unduly prejudicial to the defendants was also 

an abuse of discretion. 

Therefore, we find the district court abused its discretion 

by denying the motion for leave to amend and the district 

court’s judgment to that effect is hereby vacated. 

 

not support the denial of a motion for leave to amend.” Deasy v. 

Hill, 833 F.2d 38, 41 (4th Cir. 1987). Without a finding of 

dilatory motive and prejudice, the district court’s finding that 

CSX acted in a dilatory manner is an insufficient ground upon 

which to deny the motion to amend.
20

C.

CSX next argues that the district court erroneously granted 

summary judgment to the defendants in the Baylor suit. In its 

award of summary judgment, the district court found that “[t]he 

undisputed facts show that CSX cannot produce evidence 

sufficient for a reasonable jury to find that CSX relied upon 

the defendants’ alleged fraudulent act.” (J.A. 2091). In the 

district court’s view, “there remains no evidence that the 

lawyer defendants knew that Mr. Baylor did not have asbestosis,” 

because “CSX, itself, admits that ‘a B reader could 

hypothetically undertake to review the 2003 x-ray and believe in 

good faith that they [sic] find [signs of asbestosis].’” (J.A. 

2092). 

CSX offers three contentions for reversal of the grant of 

summary judgment:

First, the positive x-ray reading resulted from an 

unreliable screening mechanism designed by the lawyer 

defendants to generate false positives. Second, the 

lawyer defendants failed to conduct a reasonable 

inquiry before filing suit, and thus failed to uncover 

medical records in their own files that effectively 

ruled out asbestosis. Third, the only evidence that 

Baylor had been exposed to asbestos while working for 

CSX[] was a questionnaire that Baylor himself 

confirmed was fabricated.

(Appellant’s Br. 39-40) (emphasis deleted). If we assume, 

without deciding, that sufficient evidence was before the 

district court so as to permit summary judgment on the first two 
21

issues, there clearly were material facts in dispute as to the 

last issue.

This Court reviews a district court’s grant of summary 

judgment de novo. Shipbuilders Council of Am. v. U.S. Coast 

Guard, 578 F.3d 234, 243 (4th Cir. 2009). 

“Summary judgment is only appropriate ‘if the pleadings, 

the discovery and disclosure materials on file, and any 

affidavits show that there is no genuine issue as to any 

material fact and that the movant is entitled to judgment as a 

matter of law.’” George & Co. v. Imagination Entm’t Ltd., 575 

F.3d 383, 392 (4th Cir. 2009) (quoting Fed. R. Civ. P. 56(c)). 

“We construe the evidence in the light most favorable to . . . 

the party opposing [the] summary judgment motion, and draw all 

reasonable inferences in its favor.” Id.

In order to make a prima facie claim for injuries arising 

from asbestosis, not only must the plaintiff plead and show that 

he has asbestosis, but “the threshold for every theory is [also] 

proof that an injured plaintiff was exposed to asbestoscontaining products for which the defendant is responsible.” 

Blackston v. Shook & Fletcher Insulation Co., 764 F.2d 1480, 

1481 (11th Cir. 1985); see also Marlin v. Bill Rich Const., 

Inc., 482 S.E.2d 620, 635 (W. Va. 1996) (“[I]nhaling asbestos 

fibers or other dustborne particles does not constitute an 

injury under [West Virginia’s worker compensation statute], 
22

absent the further showing that occupational pneumoconiosis has 

been contracted after exposure . . . .”). Thus, to make out a 

claim of injury from asbestosis, counsel must plead not only 

that the claimant has the disease, but the additional element of 

exposure to asbestos while working for the defendant.

“[R]ecovery will require the plaintiff to show that he was 

exposed to defendant’s asbestos-containing product by working 

with or in close proximity to the product.” Blackston, 764 F.2d 

at 1481; see also Restatement 2d Torts § 431(a). It follows 

that if the evidence could reasonably show that a lawyer filed 

an asbestos claim knowing the necessary element of occupational

exposure did not exist, a reasonable jury could conclude that to 

be an act of fraud. Of course, fraud is the gravamen of the 

claim by CSX against the defendants in the Baylor suit. 

Even if we assume, as the lawyer defendants argue and the 

district court held, that CSX could not show the defendants did 

not know Baylor did not have asbestosis, that assumption is 

insufficient to support the grant of summary judgment. This is 

because material facts remain in dispute as to whether the 

lawyer defendants committed fraud in their representation that 

the necessary element of occupational exposure was met in 

Baylor’s case.

After Breyer confirmed Harron’s reading of Baylor’s x-ray, 

the Peirce firm sent Baylor a copy of an “Asbestos 
23

Questionnaire” with directions to complete the questionnaire, 

although someone at the Peirce firm had already “partially 

completed” it. (J.A. 92). In the response to a section of the 

questionnaire entitled “Claimed Exposures,” the terms “Asbestos 

rope, cement, Asbestos valve packing” are written. (J.A. 93).5

 5 Additional information is written in that section; 

however, the rest of the response does not allege any asbestos 

exposure. 

 

The foregoing writing appears to be in handwriting different 

from that on the remainder of the questionnaire, and Baylor 

testified that it was “not [his] writing.” (J.A. 1199). He also 

testified that it was “not [his] wife’s writing,” (J.A. 1199),

and responded “[n]o” when he was asked “whether someone [from 

the Peirce firm] might have asked you questions and wrote things 

on this form while . . . you were sitting there?” (J.A. 1204). 

Moreover, Baylor testified that while employed by CSX he did not 

work with any asbestos rope or with any cement products. If the 

jury believed this evidence, it could reasonably conclude the 

lawyer defendants committed an act of fraud by falsifying the 

occupational exposure required as a necessary element of the 

asbestos claim they filed. Obviously, CSX would have “relied” 

on the representation by filing the Baylor claim that all 

elements of the cause of action were met as CSX would have had 

no reason to know of the alleged act of fraud. 
24

Thus, viewing the evidence in the light most favorable to 

CSX, a reasonable jury could find that the lawyer defendants at 

worst fraudulently manufactured the claimed exposures, or at 

least lacked a good faith basis to file an asbestos injury claim 

because they knew it lacked the necessary element of 

occupational exposure. Consequently, a jury could find that the 

lawyer defendants committed fraud by filing the lawsuit because 

there was no evidence upon which they could have believed that 

Baylor was exposed to asbestos-containing products in the course 

of his employment with CSX. Consequently, a reasonable jury 

could find CSX relied to its detriment on the defendants’ 

alleged fraud as the basis of the Baylor claim.6

Accordingly, because material facts remain in dispute, we 

reverse the district court’s award of summary judgment to the 

defendants in the Baylor case.

 

7

 6 Harron contends an independent basis (Breyer’s B-read of 

Baylor’s x-ray) exists to sustain the award of summary judgment 

as to him. We disagree. From the record evidence, a reasonable 

jury could conclude Harron falsely certified Baylor’s x-ray and 

that Breyer was also involved in a similar scheme particularly 

if the jury found Breyer’s B-read came after receiving Harron’s 

previous diagnosis. Thus, material facts remain in dispute as 

to Harron which preclude summary judgment upon the current 

record. 

7 We have reviewed defendants’ arguments that alternative 

grounds exist for the district court’s grant of summary judgment 

and have found all of them to be without merit. This finding 

includes, but is not limited to, the defendants’ argument that 

CSX’s fraud claim is barred by the Noerr-Pennington doctrine. 

(Continued)
25

D.

The fraud and conspiracy claim that proceeded to trial 

arose from CSX’s allegation of Gilkison’s and, vicariously, the 

Peirce firm’s participation in the so-called May/Jayne Incident. 

This case involved two prior CSX employees: Danny Jayne 

(“Jayne”) and Ricky May (“May”). Jayne had “attended and was 

examined at a screening for asbestosis conducted by the Peirce 

firm,” and his x-ray was read by Harron as having irregularities 

“consistent with asbestosis.” (J.A. 166). As a result of this 

diagnosis, the Peirce firm filed a personal injury suit on 

Jayne’s behalf against CSX in 2000, which was ultimately 

settled. 

CSX alleged that, subsequently, Gilkison “suggested to . . 

. May that he should get someone who had previously tested 

positive for asbestosis to sit for his exam,” so that he would 

“be able to file a claim against CSX.” (J.A. 167). May asked 

Jayne to appear at an asbestosis screening and represent himself 

 

As the district court found, “CSX’s amended complaint contains 

sufficient allegations to support the sham exception,” (J.A. 

703), and the record has sufficient evidence to support that 

finding. Moreover, the defendants have not challenged the 

district court’s finding of fact by cross appeal. The 

defendants also contend a release by Baylor forecloses a claim 

by CSX related to him. However, the district court has not 

considered this ground and has made no factual findings which 

would be a necessary condition precedent to appellate review. 
26

to be May, which Jayne did. The resulting x-ray was later 

“presented to CSX[] on behalf of . . . May by the Peirce firm as 

part of a settlement package.” (J.A. 170). 

At trial, May testified that “the idea” to “ask[] someone 

else to sit on [his] behalf . . . came from . . . Gilkison.” 

(J.A. 1622). Jayne testified that May “called [him] and asked 

[him] to attend a screening and sit in his place and pretend[] 

that [he was] May so that he could obtain a positive screening,” 

and that May had told him that the suggestion for the scheme 

originated with Gilkison. (J.A. 1720). Gilkison denied that he 

was either the mastermind or a participant in the scheme. 

Peirce testified that he had no knowledge of the scheme before 

or during the time it was executed, and after he discovered the 

fraud, he told May “he is no longer our client and he better get 

a lawyer to defend himself on the allegations that CSX had made. 

I wanted nothing to do with him at that point . . . .” (J.A. 

1544). 

During trial, CSX attempted to introduce evidence that the 

Peirce firm had continued to represent May after the incident in 

various personal injury matters against third parties other than 

CSX (hereinafter “third party claims”). The district court

granted the defendants’ motion to exclude that evidence, finding

that “what actions the Peirce Law Firm did with regard to those 

other [third party claims] seems to me to be irrelevant in the 
27

first place under 401 and probably confusing to the jury and 

unfairly prejudicial.” (J.A. 1323). Later, the district court 

again found that “the third-party issues, which are described as 

such which really involve claims that May had or may have had 

against other asbestos manufacturers and possibly other related 

parties, is not relevant to the claim of CSX against Gilkison 

and Peirce for their damages for the fraud.” (J.A. 1560).

On appeal, CSX argues that the evidence was “manifestly 

relevant” under Rule 401 because it “directly contradict[ed] 

Peirce’s testimony” and “made it more likely that the fraud was 

a calculated scheme by Gilkison and the Peirce firm to generate 

revenue for the firm and assist May.” (Appellant’s Br. 56-57). 

CSX contends that the evidence was particularly significant

because “the case ultimately came down to whether the jury 

believed May and Jayne, on the one hand, or Gilkison and Peirce, 

on the other.” (Appellant’s Br. 59).

This court reviews the district court’s decision to exclude 

this evidence for an abuse of discretion. United States v. 

Blake, 571 F.3d 331, 350 (4th Cir. 2009).

“To be relevant, evidence need only to have ‘any tendency 

to make the existence of any fact that is of consequence to the 

determination of the action more probable or less probable than 

it would be without the evidence.’” United States v. Aramony, 88 

F.3d 1369, 1377 (4th Cir. 1996) (quoting Fed. R. Evid. 401). 
28

However, relevant evidence “must be excluded if its probative 

value is substantially outweighed by the danger of undue 

prejudice,” which occurs when “there is a genuine risk that the 

emotions of a jury will be excited to irrational behavior, and 

that this risk is disproportionate to the probative value of the 

offered evidence.” Id. at 1378 (quotations omitted). 

Because the district court has first-hand knowledge of 

the trial proceedings, we have consistently held that 

the district court should be afforded ‘wide 

discretion’ in determining whether evidence is unduly 

prejudicial and that the district court’s evidentiary 

determinations should not be overturned “except under 

the most extraordinary of circumstances.”

Id. at 1377 (quoting United States v. Heyward, 729 F.2d 297, 301 

n.2 (4th Cir. 1984)). 

We find that the district court did not abuse its 

discretion by excluding the evidence. First, the evidence was 

not clearly impeaching, as it was consistent with Peirce’s 

testimony that the Peirce firm ceased representing May on 

asbestos matters against CSX after Peirce discovered the fraud. 

Evidence that the Peirce firm continued to represent May in 

actions against other parties is not contrary to Peirce’s 

testimony. Thus, Peirce’s credibility is not called into 

question by the evidence.

Furthermore, Peirce’s testimony was not at all conclusive 

on the issue of Gilkison’s guilt. Because CSX’s allegations as 

to the Peirce firm’s liability were premised on a theory of 
29

vicarious liability, and not on any direct actions on the part 

of the Peirce firm, the evidence is not particularly relevant. 

Therefore, the district court did not abuse its discretion by 

finding that the possible confusion to the jury and prejudice to 

the defendants outweighed any marginal relevance the evidence 

may have had. 

 

III.

For the foregoing reasons, we affirm the district court’s 

judgment regarding the May/Jayne Incident. We vacate the 

district court’s judgment granting the motion to dismiss as to 

Counts 1 through 4. We also vacate the district court’s 

judgment denying the motion by CSX to amend its complaint. 

Finally, we vacate the district court’s grant of summary 

judgment to the defendants on the Baylor claim. Accordingly, 

this case is remanded to the district court for further 

proceedings in accordance with this opinion.

AFFIRMED IN PART,

VACATED IN PART,

AND REMANDED
30

DAVIS, Circuit Judge, concurring:

I concur fully in the panel opinion and in the disposition 

of this appeal. I write separately to express some lingering 

reservations regarding our vacatur of the district court’s 

summary judgment on the Baylor claim. 

In West Virginia, as elsewhere, a plaintiff must prove 

fraud by clear and convincing evidence. See, e.g., Bowling v. 

Ansted Chrysler-Plymouth-Dodge, Inc., 425 S.E.2d 144, 148 (W.Va. 

1992); White v. National Steel Corp., 938 F.2d 474, 490 (4th 

Cir. 1991). While the uncertainty surrounding the unidentified 

handwriting on Baylor’s Asbestos Questionnaire may present a 

factual issue, I have grave doubt that any reasonable resolution

of that uncertainty is sufficient on this record to show fraud 

on the part of the lawyer defendants in light of the heightened 

burden of proof West Virginia law imposes on plaintiffs. It is 

far from obvious that a reasonable jury could find, by clear and 

convincing evidence, that the lawyer defendants committed fraud 

in “representing” that Baylor had been exposed to asbestos. 

CSX argues that a fabricated Questionnaire is “compelling 

evidence” that Baylor’s exposure history was falsified and, 

thus, evidence that the lawyer defendants knowingly 

misrepresented this fact in support of his claim when they filed 

suit on Baylor’s behalf against CSX. The record shows that the 

Questionnaire was not completed until 2005, two years after 
31

Baylor’s initial screening. J.A. 92-95, 1154, 1157. The 

Questionnaire alone, created after the lawyer defendants had 

opened a file for Baylor on the basis of his work and medical 

history, seems insufficient to show by clear and convincing 

evidence that the individual lawyer defendants knowingly filed 

Baylor’s claim on the basis of a factual allegation they knew to 

be false. This is all the more so given the evidence in the 

record supporting Baylor’s exposure history. According to 

evidence in the record, brake exposures to track men (Baylor’s 

position) were “certainly a possible source of exposure.” J.A. 

1195. As this court has previously noted, “[f]raud ‘is not 

deducible from facts and circumstances which would be equally 

consistent with honest intentions.’” White, 938 F.2d at 491 

(citing Steele v. Steele, 295 F.Supp. 1266, 1269 (S.D.W.Va. 

1969)). 

Furthermore, even if one assumes that CSX has projected 

evidence sufficient to establish, by clear and convincing 

evidence, a material misrepresentation, it is highly doubtful 

that CSX can show its reasonable reliance on any such 

misrepresentation. CSX claims that there “can be no question 

that . . . CSX[] relied on that misrepresentation by treating 

the claim like every other one in the mass asbestos docket.” 

Appellant’s Br. at 48. However, a successful fraud action 

requires that a plaintiff not only have “relied upon the 
32

misrepresentation,” but to have been “justified in relying upon 

it.” Martin v. ERA Good fellow Agency, Inc., 423 S.E.2d 379, 381 

(W. Va. 1992) (emphasis added). Here, Baylor’s underlying 

damages claim was based on allegations in a civil lawsuit 

against CSX. As the defendant in that suit, CSX had the ability, 

and its lawyers had a duty, to access, examine, and where 

appropriate, contest the other side’s evidence, including, as 

here, evidence with respect to the sufficiency of Baylor’s 

asbestosis claim. Instead, CSX’s claim here, that it was damaged 

by its (ostensibly reasonable) reliance on a misrepresentation 

regarding Baylor’s workplace exposure, appears to turn on its 

head the very adversarial regime that is one of the hallmarks of 

our system of civil justice. One is left to ponder how a party 

represented by capable counsel might reasonably rely on the 

allegations made on behalf of its adversary. 

I note, as well, that to the extent CSX rests its claim for 

fraud on the lawyer defendants’ alleged “misrepresentation” of 

their “good-faith basis” for filing the Baylor claim, this court 

received no coherent answer at oral argument to its question 

seeking the source of any such duty under West Virginia law. CSX 

appears to rely for this proposition on West Virginia Rule of 

Civil Procedure 11(a). Appellant’s Br. 39. However, West 

Virginia courts have noted that “[t]he purpose of Rule 11 and 

Rule 37 of the West Virginia Rules of Civil Procedure is to 
33

allow trial courts to sanction parties who do not meet minimum 

standards of conduct in a variety of circumstances.” Davis ex 

rel. Davis v. Wallace, 565 S.E.2d 386, 389 (2002) (citing 

Bartles v. Hinkle, 472 S.E.2d 827, 835 (1996)). Accordingly, 

CSX’s claims for fraud on the basis of this rule appear plainly 

unfounded. As has long been true of the corresponding federal 

rule, a private cause of action may not be based on this rule of 

procedure. See, e.g., Port Drum Co. v. Umphrey, 852 F.2d 148, 

148-49 (5th Cir. 1988) (“Under [plaintiff’s] unique and 

imaginative theory, injured third parties derive from Rule 11 a 

private cause of action to enforce an attorney's professional 

duties . . . . [W]e reject this novel legal argument.”). As we 

have analogously observed, “[c]ourts have consistently refused 

to use ethical codes to define standards of civil liability for 

lawyers.” Schatz v. Rosenberg, 943 F.2d 485, 492 (4th Cir.

1991), cert. denied sub. nom. Schatz v. Weinberg and Green, 503 

U.S. 936 (1992). 

Notwithstanding my lingering misgivings, for the reasons 

described in the panel opinion, I am content to remand the 

Baylor claim to the district court so that the above issues 

might have a proper airing.