After more than 25 years, the Michigan Supreme Court has restored the state’s most important consumer protection statute

On Friday, July 31, 2026, the Michigan Supreme Court did something consumers and the lawyers who represent them have been waiting on for the better part of my career. In Attorney General v Eli Lilly and Company, the Court overruled two decisions — Smith v Globe Life Insurance Co (1999) and Liss v Lewiston-Richards, Inc (2007) — that had quietly reduced the Michigan Consumer Protection Act to something close to a dead letter.

What the MCPA was supposed to do

The Legislature passed the Consumer Protection Act in 1976, and it was aggressive by design. It bans “[u]nfair, unconscionable, or deceptive methods, acts, or practices in the conduct of trade or commerce,” then lists specific prohibited practices — false claims about why a price was reduced, charging a price “grossly in excess” of what similar goods sell for, and many more.

Two features gave the Act teeth. It can be enforced both by the Attorney General and by ordinary consumers filing their own suits. And it shifts fees: a consumer who proves a violation recovers actual damages or $250, whichever is greater, plus reasonable attorney fees. MCL 445.911(2).

That last part matters more than it sounds. A $900 loss is a real injury to the person who suffered it, but nobody can afford to pay a lawyer by the hour to chase it. Fee shifting is how the Legislature made sure the size of the harm doesn’t decide whether a person can find counsel.

How the statute was hollowed out

The Act exempts “[a] transaction or conduct specifically authorized under laws administered by a regulatory board or officer.” MCL 445.904(1)(a). (Emphasis added.) Read naturally, that is narrow: if a regulator blessed the very conduct you’re complaining about, you can’t call it deceptive.

Smith read it differently. The question, the Court said in 1999, is not whether the specific misconduct was authorized, but whether the general transaction was — regardless of whether the misconduct itself is prohibited. Liss extended that reasoning in 2007 to licensed residential home builders.

The consequence was predictable, and Justice Michael F. Cavanagh predicted it in dissent: most businesses selling to consumers hold some license or operate under some regulatory scheme. If a general license is enough, most of them are immune.

That is exactly what followed. Courts applying Smith and Liss held the MCPA inapplicable to home builders, car dealers, car makers, mortgage lenders and servicers, real estate agents, plumbers, doctors, grocery stores, casinos, and pesticide applicators. The mere existence of a license became enough to immunize a defendant, with no inquiry into whether the misconduct had anything to do with what the regulator actually authorized. The perverse result: the more heavily regulated the industry, the more complete its protection.

What the Court held

The case grew out of the Attorney General’s investigation into Eli Lilly’s insulin pricing. Anticipating that Lilly would raise the exemption, the AG asked the courts to declare up front that Smith and Liss did not bar the investigation. The circuit court and the Court of Appeals both said the MCPA didn’t apply, because selling pharmaceuticals is a regulated activity.

The Supreme Court reversed. Writing for a four-justice majority, Justice Noah Hood pointed out that the word “general” appears nowhere in the statute — Smith and Liss had inserted it while writing “specifically authorized” out. The correct question is whether the specific conduct at issue was authorized by law, not whether the industry is regulated.

The Court found no sufficient reason to preserve the two decisions. They had made much of the MCPA “completely unworkable,” and a business’s interest in relying on them to deceive consumers, the Court said, “is not a valid reliance interest.”

Three justices dissented, but on standing grounds only; they expressly took no position on whether Smith and Lisswere rightly decided.

One caution: the Court did not hold that Eli Lilly violated the MCPA. It held that the exemption no longer closes the door before anyone gets to ask.

Why this matters

I have spent almost twenty years litigating consumer protection cases in Michigan, and in most instances, the MCPA has been a statute I had to explain to clients rather than use. A business would deceive someone, we would look at the Act, then look at Smith and Liss, and go find another theory — often there was no fee shifting to go along with the workable theories, which meant no case at all.

That changes now. Michigan consumers again have a statute that reaches deceptive conduct by regulated businesses, and Michigan lawyers again have the fee-shifting provision that makes those cases possible to bring. Not every claim will win; the exemption still exists and still applies where a regulator genuinely authorized the conduct at issue. But the threshold question is no longer “is this defendant licensed?” It is “was this conduct specifically authorized?” For most deceptive practices, the answer is no.

I am glad to have this tool back.

If you believe a business has treated you unfairly or deceptively, Westbrook Law would like to hear from you. Claims that were foreclosed for the last quarter century may now be viable. Get in touch through our contact page: https://westbrook.law/contact/