High Court Considers Restoring State Consumer Protection Powers

(Source: MIRS.news, Published 11/05/2025) The Michigan Supreme Court heard arguments Tuesday in a case that could determine whether the state can investigate drug manufacturer Eli Lilly & Company over insulin pricing — and more broadly, whether Michigan’s consumer protection law can once again be used to hold corporations accountable for alleged deceptive practices.

Attorney General Dana Nessel is asking the Court to overturn two earlier rulings — the 1999 Smith v. Globe Life decision and the 2007 Liss v. Lewiston-Richards ruling — which have sharply limited the Michigan Consumer Protection Act (MCPA). Those decisions held that if a business or industry is generally regulated by a state or federal agency, it is effectively exempt from the MCPA, even when accused of unfair or deceptive conduct.

Nessel argues the rulings misinterpreted a narrow exemption in the law and have, in practice, blocked the state from investigating wrongdoing in everyday consumer transactions — including prescription drug pricing.

“Eli Lilly has relied on these past Supreme Court decisions that twist a narrow exemption into something far too broad,” Nessel said in a statement. “The Michigan Consumer Protection Act is supposed to protect consumers, but instead it often shields many corporations from any real accountability.”

The Attorney General launched an investigation in January 2022 into whether Eli Lilly engaged in price gouging for insulin, a life-saving medication used by diabetics. An Ingham County judge ruled later that year that the MCPA could not apply to Lilly because insulin sales are regulated by the U.S. Food and Drug Administration. The Michigan Court of Appeals upheld that decision.

At Tuesday’s hearing, Assistant Attorney General Darrin Fowler told justices the earlier precedents incorrectly expanded the exemption and stripped the MCPA of its intended power.

But Eli Lilly attorney John O'Quinn argued the company’s conduct isn't violating the law — and that reversing decades of case law would improperly dismiss the principle that courts should generally follow established precedent.

“Whatever you think of Smith when it was originally decided, this Court has to grapple with the fact that the exact same language has been re-enacted multiple times,” O’Quinn told the justices.

The case drew close attention from lawmakers, including Senate Majority Floor Leader Sam Singh (D-East Lansing), who has introduced legislation to restore the MCPA by removing the regulatory exemption.

“For too long now, Michigan’s worst-in-the-nation consumer protection laws have left residents vulnerable to exploitation and fraudulent business practices,” Singh said. “While it’s my hope that the outcome of this case sets the dial in the right direction, we must also change the laws on our books.”

Singh’s bill, SB 134, would remove the exemptions created by the Smith decision, empower the Attorney General to investigate alleged wrongdoing, create a new fund to support enforcement and consumer education, and increase penalties for violations targeting elderly or vulnerable adults. The bill passed the Senate and is now before the House.

A ruling from the Supreme Court is expected in the coming months.

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