Civil Investigative Demand (CID) Litigation Equitably Tolls Limitations Periods for Minnesota Attorney General § 8.31 Enforcement Actions

Introduction

In State of Minnesota Office of the Attorney General v. Madison Equities, Inc. (Minn. Jan. 7, 2026), the Minnesota Supreme Court addressed a recurring enforcement problem: when the Attorney General (AG) uses a statutory civil investigative demand (CID) under Minn. Stat. § 8.31 (2024) to investigate suspected unlawful business practices, can years of CID litigation consume the statute of limitations for the eventual civil enforcement action?

The dispute arose from employee complaints in 2019 alleging “wage theft” and systematic evasion of overtime obligations under the Minnesota Fair Labor Standards Act (MFLSA), Minn. Stat. §§ 177.21-.35 (2024). The AG issued a CID in October 2019. Madison Equities moved to quash (seeking a protective order), producing more than three years of litigation. After the CID litigation concluded, the AG filed a civil enforcement action in June 2023 that included an MFLSA overtime claim. Madison Equities moved to dismiss under Minn. R. Civ. P. 12.02(e) as untimely under the two-year wage claim limitations period, Minn. Stat. § 541.07(5) (2024). The central question became whether the limitations clock stopped during the CID litigation.

Summary of the Opinion

The court reversed the court of appeals and held that litigation over a CID tolls the statute of limitations for a subsequent civil enforcement action brought by the Attorney General under Minn. Stat. § 8.31, provided the CID litigation concerns the same alleged unlawful practice.

The court emphasized the holding is narrow:

Only CID litigation (not mere service of a CID) triggers tolling.
Tolling runs from the commencement of CID litigation to the point when the target complies by producing the evidence sought.
The CID and the later enforcement action must concern the same alleged unlawful practice.
The rule is limited to the AG’s authority under § 8.31 to investigate and enforce laws described in § 8.31, subd. 1.

Applying that rule, the court concluded the MFLSA claim should not have been dismissed at the pleading stage and remanded to reinstate it.

Analysis

Precedents Cited

Pleading and Rule 12.02(e) framework

Walsh v. U.S. Bank, N.A., 851 N.W.2d 598 (Minn. 2014): cited for the Rule 12.02(e) principle that allegations are accepted as true and reasonable inferences drawn for the nonmovant.
State by Smart Growing Minneapolis v. City of Minneapolis, 954 N.W.2d 584 (Minn. 2021): cited for the ability to consider documents referenced or attached to the complaint on a motion to dismiss.
Hansen v. U.S. Bank Nat'l Ass'n, 934 N.W.2d 319 (Minn. 2019): anchors the de novo standard of review for dismissals and cautions that limitations-based dismissal is proper only when untimeliness is clear from the complaint. The court also used Hansen to reiterate that courts should not “make inferential leaps” favoring defendants at the pleading stage.
MacRae v. Grp. Health Plan, Inc., 753 N.W.2d 711 (Minn. 2008): cited for the proposition that statute of limitations is an affirmative defense and the defendant bears the burden of proving it.
Hoskin v. Krsnak, 25 N.W.3d 398 (Minn. 2025): cited to emphasize plaintiffs are not required to plead around affirmative defenses (including tolling) in the complaint.
Schmidt v. Skolas, 770 F.3d 241 (3d Cir. 2014): used persuasively for the proposition that a complaint need not anticipate and defeat a limitations defense.

Authority for tolling and its “exceptional” character

Minn. Laborers Health & Welfare Fund v. Granite Re, Inc., 844 N.W.2d 509 (Minn. 2014): cited for de novo review of tolling and for the contours of fraudulent-concealment tolling (though the court disclaimed any finding of fraud here).
Sanchez v. State, 816 N.W.2d 550 (Minn. 2012): cited both for the principle that courts generally cannot extend statutory limitations periods and for the notion that equitable tolling remains possible “unless the Legislature expressly provides otherwise,” while stressing the “high” bar for tolling.
Young v. United States, 535 U.S. 43 (2002), and Petrella v. Metro-Goldwyn-Mayer, Inc., 572 U.S. 663 (2014): cited for the general proposition that limitations periods are customarily subject to equitable tolling absent inconsistency with the governing statute.
Wild v. Rarig, 234 N.W.2d 775 (Minn. 1975), and Abel v. Abbott Nw. Hosp., 947 N.W.2d 58 (Minn. 2020): cited as examples of narrow tolling doctrines Minnesota recognizes (fraudulent concealment; continuing violations).
St. Paul, M. & M. Ry. Co. v. Olson, 91 N.W. 294 (Minn. 1902): the majority’s key historical analogue for tolling where a party is prevented from exercising a remedy by “paramount authority.” The court acknowledged this case was not identical but used it to justify tolling when a legal process effectively blocks timely enforcement.
Holmgren v. Isaackson, 116 N.W. 205 (Minn. 1908), and DeMars v. Robinson King Floors, Inc., 256 N.W.2d 501 (Minn. 1977): referenced as later applications that limited rather than expanded Olson, illustrating Minnesota’s restraint with tolling.

Meaning and operation of § 8.31 investigative authority

Madison Equities, Inc. v. Off. of Att'y Gen. (Madison Equities I), 967 N.W.2d 667 (Minn. 2021): supplied the statutory architecture central to this case—distinguishing § 8.31, subd. 1 (investigative mandate) and subd. 2 (investigative tools via CID), and describing CID practice, including that pre-suit discovery is contemplated.
Kohn v. State ex rel. Humphrey, 336 N.W.2d 292 (Minn. 1983): invoked to articulate the purpose of § 8.31, subd. 2 as a fair pre-suit mechanism to test whether complaints have “substance” from the party “best positioned to know.”

Statutes of limitations policy and preservation

In re Individual 35W Bridge Litig., 806 N.W.2d 811 (Minn. 2011): cited for basic purposes of limitations periods.
Abbott v. McNeff, 171 F. Supp. 2d 935 (D. Minn. 2001), quoting Walker v. Armco Steel Corp., 446 U.S. 740 (1980), and Weavewood, Inc. v. S & P Home Inv., LLC, 821 N.W.2d 576 (Minn. 2012): used to frame the classic goals of limitations periods (fairness, repose, avoiding stale evidence).
Miller v. Lankow, 801 N.W.2d 120 (Minn. 2011): cited to support the court’s point that a CID places targets on notice of reasonably foreseeable litigation, triggering preservation duties and reducing staleness concerns.

Other cited authorities affecting interpretive method

Dereje v. State, 837 N.W.2d 714 (Minn. 2013): cited for the canon that different words used in the same context are presumed to have different meanings—important for “reasonable ground” (subd. 2) vs. “becoming satisfied” (subd. 3).
Minneapolis Star & Trib. Co. v. Schumacher, 392 N.W.2d 197 (Minn. 1986): cited for Minnesota’s policy favoring settlement without litigation, supporting the court’s efficiency rationale.
State v. Beganovic, 991 N.W.2d 638 (Minn. 2023): cited for the principle that the court is not bound by parties’ arguments and must decide in accordance with law.

Dissent-cited authorities framing the separation-of-powers critique

Weston v. Jones, 199 N.W. 431 (Minn. 1924): relied upon to argue courts generally lack power to modify legislatively prescribed limitations periods.
Knipple v. Lipke, 300 N.W. 620 (Minn. 1941): used to argue against extending “pendency” concepts where litigation does not prevent bringing the merits action.
Park Nicollet Clinic v. Hamann, 808 N.W.2d 828 (Minn. 2011): used in the dissent’s accrual argument (cause accrues when it can be brought and survive a motion to dismiss).
Wiegand v. Walser Auto. Grps., Inc., 683 N.W.2d 807 (Minn. 2004): cited by the dissent in emphasizing Minnesota’s notice-pleading standard.

Legal Reasoning

The majority’s reasoning proceeds in three main steps:

Equitable tolling remains available in Minnesota, but only in exceptional circumstances. Relying on Sanchez v. State and related authority, the court reiterated it cannot rewrite limitations statutes as a general matter, yet equitable tolling can apply unless the Legislature clearly forecloses it.
The structure of § 8.31 makes pre-suit investigation integral to the AG’s enforcement role. The court read § 8.31 as establishing distinct phases:
- Subdivision 2: the AG may investigate with “information providing a reasonable ground” and obtain pre-suit discovery via CID.
- Subdivision 3: “on becoming satisfied” that the law has been or is being violated, the AG may sue for injunctive relief and civil penalties.
The court reasoned that refusing tolling would collapse these stages by pressuring the AG to sue based on the same preliminary information that justified investigation, undermining the Legislature’s choice to authorize pre-suit discovery.
CID litigation can function as a practical barrier to timely enforcement and can incentivize strategic delay. The court emphasized the policy problem: if CID litigation does not toll limitations, targets are incentivized to litigate CIDs until limitations expire, and the AG is incentivized to file enforcement actions prematurely (or reflexively) whenever a CID is challenged. The court treated tolling during CID litigation as a “shield” to preserve the statutory investigation/enforcement design.

The court analogized (carefully) to St. Paul, M. & M. Ry. Co. v. Olson (inability to proceed due to another tribunal’s exclusive authority), and to fraudulent-concealment principles in Minn. Laborers Health & Welfare Fund v. Granite Re, Inc. (concealment stops the clock), while acknowledging Madison Equities did not commit fraud. The analogy served a narrower point: § 8.31 gives the AG a legislatively chosen pre-suit discovery track, and CID litigation can deprive the AG of that track long enough to make the limitations period meaningless.

Finally, the court confined the rule to avoid perceived abuse: service of a CID alone does not toll; only litigation does; and tolling is limited to the same unlawful practice. The court also identified an endpoint: tolling ended when Madison Equities produced the “last set of documents responsive to the CID on July 20, 2022,” rather than when final judgment entered in the CID dispute.

Impact

Strengthens § 8.31 investigations by neutralizing “run-the-clock” CID challenges. The rule reduces incentives for targets to litigate CIDs primarily to exhaust limitations time.
Shifts strategic behavior in enforcement matters. The AG can more credibly refrain from filing early “protective” enforcement suits while CID litigation is pending; conversely, CID targets must factor in that litigating scope will not automatically reduce exposure through time lapse.
Procedural consequences in limitations litigation. Statute-of-limitations defenses in § 8.31 enforcement cases will now require courts to identify: (a) when CID litigation commenced, (b) when compliance occurred, and (c) whether the later enforcement claim matches the CID’s subject matter.
Potential new disputes over “compliance” and “same unlawful practice.” Future cases may litigate whether partial production, rolling productions, or disputed deficiencies count as “compliance,” and how closely aligned claims must be to satisfy the “same alleged unlawful practice” requirement.
Institutional and separation-of-powers debate preserved. The dissent’s core concern—that the court effectively extends legislatively enacted limitations periods for a single governmental litigant—signals continued controversy and may invite legislative clarification.

Complex Concepts Simplified

Civil Investigative Demand (CID): A statutory pre-suit investigative tool allowing the Attorney General to demand documents, interrogatory answers, or deposition testimony relevant to suspected unlawful practices, without filing a lawsuit first (subject to protective orders and court supervision).
Statute of limitations: A deadline for filing a lawsuit. For wage and overtime recovery in Minnesota, the default period is generally two years under Minn. Stat. § 541.07(5) (with certain extensions to three years in specified circumstances).
Tolling: A legal rule that “stops the clock” on the statute of limitations for a period of time, so that the time does not count against the filing deadline.
Equitable tolling: A judge-made doctrine applied in exceptional circumstances to prevent unfairness when strict enforcement of the deadline would defeat justice and is not inconsistent with the statute.
Rule 12.02(e) motion to dismiss: A motion arguing the complaint fails to state a claim upon which relief can be granted. At this stage, courts assume the complaint’s factual allegations are true and draw reasonable inferences for the plaintiff.
“Reasonable ground” vs. “becoming satisfied” in § 8.31: “Reasonable ground” is the threshold to investigate and use CIDs under § 8.31, subd. 2. “Becoming satisfied” is the statutory phrasing tied to the AG’s decision to sue under § 8.31, subd. 3. The court treated these as meaningfully different stages, supporting the idea that the AG should not be forced to sue without completing (or attempting to complete) investigation.

Conclusion

The decision establishes a new, explicitly limited Minnesota rule: when the Attorney General issues a CID under Minn. Stat. § 8.31 and ensuing CID litigation concerns the same alleged unlawful practice, the statute of limitations for the later § 8.31 civil enforcement action is equitably tolled during the pendency of that CID litigation. The court framed the rule as necessary to preserve the Legislature’s two-step design—pre-suit investigative discovery followed by enforcement when warranted—while cabining it to avoid converting CIDs into an automatic limitations-stopping device.

The dissent underscores the stakes: whether the judiciary should create a special tolling regime for a particular governmental litigant absent express legislative authorization, and whether the majority’s reliance on § 8.31’s “becoming satisfied” language introduces uncertainty into accrual and pleading expectations. Regardless, the practical precedent is clear: in Minnesota, CID litigation no longer functions as a limitations “burn-off” strategy against § 8.31 enforcement actions tied to the CID’s subject matter.