September 2, 2026

On July 31, 2026, the Michigan Supreme Court made it harder for regulated businesses to escape consumer-protection claims just because their industry is licensed or regulated by the state.

Before the Ruling: A Broad Shield for Regulated Businesses

The Michigan Consumer Protection Act (MCPA) protects consumers from unfair or deceptive business practices. But the law has an exception: it doesn't apply to conduct that is “specifically authorized” by another state or federal regulator.

For years, two Michigan Supreme Court decisions — Smith v Globe Life Ins Co (1999) and Liss v Lewiston-Richards, Inc (2007) — caused this exception to be interpreted broadly. Under Smith and Liss, a business could avoid MCPA claims simply by showing that its industry as a whole was licensed or regulated by the state.

The Case: Attorney General v. Eli Lilly

Michigan's Attorney General alleged that Eli Lilly may have violated the MCPA through how it priced and promoted its insulin products. The key allegations:

  • Insulin list prices in Michigan were significantly higher than prices for the same medications in other countries.
  • Brand-name Humalog was priced substantially higher than Lispro, an authorized generic that is chemically similar.
  • Eli Lilly's promotion of Lispro, and its negotiations with pharmacy benefit managers, may have affected whether consumers could access the lower-cost option.

Eli Lilly argued it was shielded from these claims because pharmaceutical sales are a regulated industry. The Michigan Supreme Court had to decide whether that alone was enough to exempt the company from the MCPA.

What the Court Decided

The Court ruled that operating in a regulated industry does not automatically make a business immune from the MCPA. In doing so, it overturned Smith and Liss.

Going forward, courts must look at whether the specific conduct being challenged was actually authorized by a regulator — not just whether the business belongs to a regulated industry in general.

Narrowing the Exemption

For Michigan residents and public-sector leaders, this ruling strengthens the Attorney General's ability to investigate unfair or deceptive business practices — even in industries that are already licensed or regulated. At the same time, courts will still need to examine the specific conduct at issue before allowing a claim to proceed.

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