Known Unknown: 7th Cir. Uses Heightened Discovery Rule For Wisconsin Businesses

In a case decided last Friday, KDC Foods v. Gray, Plant, Mooty, Mooty & Bennett, P.A., No. 13-3678 (7th Cir. Aug. 15, 2014), the Seventh Circuit warned companies not to expect much leeway from statutes of limitation under Wisconsin law.

The court used a heightened discovery-rule standard—one that asks "when a reasonable corporate actor would have had enough knowledge"—that accounts for the often greater sophistication of corporate litigants.

KDC Foods hired a new CFO in March 2004, only to see him leave eight months later. The CFO had enough time to engage a law firm for KDC, but days after he left, the law firm resigned, and KDC's assets were sold in bankruptcy to First Products, Inc.—the former CFO's new company.