LANSING, Mich. (Michigan News Source) – For years, many Michigan businesses had a simple legal defense when consumers accused them of deceptive practices: “We’re regulated.” That argument often ended lawsuits before they ever got started.
Not anymore. In a major decision, the Democratic-majority Michigan Supreme Court overturned two decades-old rulings that had sharply limited the reach of the Michigan Consumer Protection Act, giving Democratic Attorney General Dana Nessel a significant legal victory and restoring the state’s ability to pursue many consumer fraud cases against licensed and regulated businesses. The old rulings meant that if a company was licensed or regulated by a state or federal agency, consumers often couldn’t use the law against it – even if they claimed they had been misled or overcharged.
What changes for consumers?
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The ruling means licensed businesses – including car dealers, contractors, pharmacies, lenders, insurance companies and many other regulated industries – can once again face claims under the Consumer Protection Act if they’re accused of deceptive or unfair business practices.
Nessel celebrated the decision, saying it restores protections for consumers who have been victims of deceptive business practices.
Insulin Investigation Back on Track
One of the biggest cases affected by the old legal precedent involved Nessel’s attempt to investigate pharmaceutical giant Eli Lilly over insulin pricing. In 2022, Nessel launched an investigation into whether the company violated the Michigan Consumer Protection Act by charging excessive prices for insulin. But lower courts ruled the investigation could not proceed because Eli Lilly is a federally regulated drug manufacturer, relying on the same Michigan Supreme Court decisions that were overturned this week. With those rulings now gone, the legal barrier that blocked the state’s investigation has been removed, although the underlying case will still have to work its way through the courts.
Not everyone is celebrating the court’s decision, however. Critics warn it could trigger a new wave of lawsuits against companies that believed decades of Michigan Supreme Court precedent protected them. Businesses may now face increased litigation costs even in industries already overseen by state and federal regulators.
Whether this decision ultimately protects consumers, enriches trial lawyers, or both will likely be decided one lawsuit at a time.
