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Warner Norcross + Judd LLP is a corporate law firm with over 230 attorneys serving clients in nine offices throughout Michigan. Among the largest law firms in Michigan, Warner works in virtually all areas of business law.

Michigan Law Firm - Warner Norcross + Judd LLP

Changes may be coming to the Michigan Consumer Protection Act (MCPA). The MCPA was enacted in the 1970s and provides consumers statutory claims against businesses that engage in various practices or acts that the MCPA describes as “unfair, unconscionable, or deceptive.” &nbsp;However, Section 4 of the MCPA includes an exemption, stating its provisions do not apply to “a transaction or conduct specifically authorized under laws administered by a regulatory board or officer acting under statutory authority of this state or the United States.”

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In 1999, the Michigan Supreme Court issued a decision in&nbsp;Smith v. Globe Life Insurance Co.&nbsp;interpreting that exemption in a way that placed many businesses outside the scope of the MCPA. In practice,&nbsp;Smith&nbsp;meant that banks, insurers, lenders, utilities, home builders and many other businesses could not be sued under the MCPA on the basis that they were subject to some form of regulation – even if the conduct at issue was not specifically regulated. Consumer advocates have long argued that this decision gutted the MCPA and left Michigan residents with fewer protections than consumers in other states.

Both the legislative and judicial branches in Michigan are now reconsidering the scope of the MCPA. On June 10, the Democratic-controlled Michigan Senate passed <a href="https://www.legislature.mi.gov/Bills/Bill?ObjectName=2025-SB-0134" target="_blank" rel="noreferrer noopener">Senate Bill 134</a> along party lines, which would eliminate the broad exemption that has shielded regulated businesses from MCPA lawsuits. The bill also strengthens the attorney general’s enforcement powers, including the ability to demand documents during investigations, increases potential penalties for misconduct affecting vulnerable adults and enables the attorney general to institute class actions to recover actual damages or $250 per class member, whichever is greater. Previously, the attorney general could bring class actions to recover only actual damages. The legislation has moved to the Republican-controlled House.

At the same time, the Michigan Supreme Court has agreed to hear&nbsp;Attorney General v. Eli Lilly, in which the attorney general has asked the Court to overturn the&nbsp;Smith&nbsp;decision. The justices will consider whether the 1999 ruling misinterpreted the MCPA by applying its Section 4 exemption too broadly. &nbsp;

The implications for Michigan businesses could be significant. If either the legislation passes or the Supreme Court reverses&nbsp;Smith, the MCPA’s consumer protections would once again apply more broadly across sectors that have been exempt for the past 25 years. Companies in industries such as insurance, finance, health care, automotive dealerships and construction could face a new wave of consumer lawsuits, including the potential for class-action litigation and exposure to higher damage awards. At the same time, the attorney general would gain broader authority to investigate practices that may be viewed as unfair or deceptive. For businesses, this would represent a fundamental shift in the legal risk landscape, requiring a renewed focus on compliance programs, consumer communications and dispute-resolution strategies.

Our team will continue to monitor Senate Bill 134 and the Michigan Supreme Court’s review of&nbsp;Smith v. Globe Life. We will provide updates as developments unfold. In the meantime, if you would like to discuss how these potential changes could affect your business, please contact Thomas Amon, Samuel Hauke or your Warner Attorney.

Partner

Thomas M. “Tom” Amon

Associate

Samuel D. “Sam” Hauke

Class Action Defense

Potential Changes to Michigan’s Consumer Protection Act Could Shift Legal Risk

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Potential Changes to Michigan’s Consumer Protection Act Could Shift Legal Risk

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