icon on The Michigan Supreme Court recently issued a decision in Attorney General v. Eli Lilly & Company, that will have a large impact on viability of claims under the Michigan Consumer Protection Act (“MCPA”).
In Attorney General v. Eli Lilly & Company, the Michigan Supreme Court overruled its prior decisions in Smith v. Globe Life Insurance Co. and Liss v. Lewiston-Richards, Inc., which had broadly interpreted MCL 445.904(1)(a) to exempt virtually any business engaged in a generally authorized or regulated activity from MCPA liability. The Court held that the statute’s plain language requires a narrower inquiry: whether the specific transaction or conduct alleged to violate the MCPA is expressly authorized by law, not whether the defendant’s business activities are generally regulated or licensed. In so doing, the Court created a new test for applying the MCPA exemption. Initially, a court must consider whether the specific transaction or conduct alleged by a plaintiff violates the MCPA. Then, a court must determine whether the conduct or transaction at issue is “specifically authorized under laws administered by a regulatory board or officer acting under statutory authority of this state or the United States.” MCL 445.904(1)(a).
MCPA claims are popular with plaintiffs because of the statutory provision of attorney’s fees for a successful plaintiff. Businesses therefore must be aware that under this ruling, MCPA claims may become a viable avenue of recovery for plaintiffs and will certainly require a more detailed analysis of liability at the outset of cases.