An Israeli smart packaging company can't enlarge a North Carolina Business Court contract breach suit, a judge ruled Monday, saying the amendment would "wholly transform" the case and prejudice defendant Sealed Air Corp.

In an order denying Water.io Ltd.'s motion to amend, Judge Adam M. Conrad said the proposed amendment — tripling the length of the complaint — would overhaul the case, tack new tort theories onto what's so far been a contract case and revive an already-disposed damages theory. Water.io also failed to put forward a convincing reason to allow the delay after both parties agreed to a case management schedule, he said.

"In vague, conclusory fashion, Water.io contends that its new allegations and claims are based on information learned during discovery," Judge Conrad said.

Water.io, which now does business as ImpacX.io, makes smart packaging materials including water bottles with sensors that transmit data to a mobile app. Sealed Air is a publicly traded packaging company based in Charlotte.

The Israeli company sued North Carolina-based Sealed Air in 2024, accusing it of backing out of a $25 million contract for smart sensors. Water.io says the packager lied about the development process and invented issues to kill the deal, under which Water.io was to develop a smart sensor for Sealed Air's packaging material. The cancellation came just before Water.io's initial public offering, delaying the IPO date and decimating its overall valuation, the company says.

But Judge Conrad found that Water.io unreasonably delayed its motion to amend, as it came 14 months after the original complaint and seven months after the deadline to amend, which Water.io had proposed. Both sides had agreed to a January deadline to amend pleadings and a mid-June one to close fact discovery.

The company also didn't identify the "newly discovered" information with specificity, and little clarity was offered in the exhibits. It's also clear Water.io had much of the key information it sought to add before filing suit, Judge Conrad said.

Granting the motion would prejudice Sealed Air, he said. The events in question happened more than four years ago, which creates a risk that evidence will be lost as "memories fade and witnesses move to new roles or new employers." This concern has already manifested in a dispute over a laptop Water.io hasn't been able to find, the judge said.

Against Water.io's assertions otherwise, the amended complaint would require more discovery, he said. For example, Sealed Air's in-house counsel Lori Tylinski isn't a party to the current suit, and she would be entitled to conduct discovery. In the proposed amendment, Water.io added a claim of negligent misrepresentation against Tylinski.

In September, Judge Conrad handed Sealed Air partial summary judgment on a "single, albeit weighty," issue, ruling that Water.io couldn't recover the multimillion-dollar decline in valuation from the delayed IPO as consequential damages in a contract breach. He noted that Water.io moved to amend its complaint before the summary judgment hearing but rescinded the request.

On the eve of closure of fact discovery, Water.io moved again to amend its complaint, this time looking to tack on 100 paragraphs of new factual allegations and six new claims for relief, all tied to the delayed IPO. The proposed amendment also included negligence claims under both North Carolina and Israeli law.

Also on Monday, Judge Conrad weighed in on discovery disputes. He denied Water.io's motion to obtain a 2021 report from Sealed Air employee William England, finding it's covered under work-product immunity. That report contains England's analysis of the parties' contractual relationship.

But Judge Conrad gave Water.io access to an email England sent to his supervisor, ruling that even if certain portions of the email are privileged, Sealed Air didn't assert that privilege in time.

Counsel for the parties didn't immediately respond to requests for comment Monday.

Water.io is represented by Edward F. Hennessey, Emma Perry and Kelley Storey of Robinson Bradshaw & Hinson PA.

Sealed Air is represented by Scott M. Tyler, Bruce J. Rose, Clara G. Ilkka, Benjamin Austin and Alexis Narducci of Moore & Van Allen PLLC.

The case is Water.io Ltd. v. Sealed Air Corp., case number 2024CVS29851, in the North Carolina Business Court.