Overview
Until July 31, 2026, if a business sued under the Michigan Consumer Protection Act (“MCPA”) was in a regulated industry, that business was largely protected by the MCPA’s regulated-industry exemption (the “Exemption”).[1] Those protections were greatly diminished in the Michigan Supreme Court’s 4-3 decision in Attorney General v. Eli Lilly & Co.[2] The Eli Lilly decision exposes many regulated-industry players to risk under the MCPA, including the automotive industry, which the Michigan Supreme Court identified in the Eli Lilly opinion as a previously “judicially immunized” industry.[3]
The MCPA and the Regulated-Industry Exemption
The MCPA prohibits “[u]nfair, unconscionable, or deceptive methods, acts, or practices in the conduct of trade or commerce,”[4] broadly defined to include any business providing goods or services “primarily for personal, family, or household purposes.”[5] A private plaintiff may recover actual damages or $250, whichever is greater, plus attorney fees;[6] the Attorney General may separately investigate by subpoena, seek civil fines, and bring class actions.[7]
MCL 445.904(1)(a) exempts from MCPA liability “[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,” an affirmative defense the defendant must prove.[8]
From “General Transaction” to “Specific Conduct”
Before Eli Lilly, the Michigan Supreme Court broadly read the Exemption, as shown by its 1999 opinion in Smith v. Globe Life Insurance Co.: “the relevant inquiry is not whether the specific misconduct alleged … is ‘specifically authorized.’ Rather, it is whether the general transaction is specifically authorized by law, regardless of whether the specific misconduct alleged is prohibited.”[9] Under the Smith rule, showing that an industry was licensed or regulated was enough for a defendant to avail itself of the Exemption. The Court reaffirmed that approach in Liss v. Lewiston-Richards, Inc., holding that the Exemption “requires a general transaction that is ‘explicitly sanctioned.’”[10] As the Eli Lilly court put it, that protection had immunized “a broad range of industries,” including “car dealers” and “car makers.”[11]
The Eli Lilly court reversed course, overruling Smith and Liss as having “improperly broadened the scope of the exemption, contrary to the plain language, structure, and purpose of the statute.”[12] Under Eli Lilly, the Exemption now applies only if the specific transaction or conduct challenged (not the defendant’s business in general) is authorized by law. As the court framed it, lower courts must “first consider the specific transaction or conduct that the plaintiff alleges violates the MCPA,” then ask whether that conduct is “specifically authorized” by law.[13]
The Auto-Industry Examples
The Eli Lilly opinion cites two motor-vehicle cases as examples of the old rule’s reach.[14] In Jimenez v. Ford Motor Credit Co., a dealer allegedly sold a vehicle as new despite a minor collision during a pre-delivery test drive; the buyer’s MCPA claim failed because the sale itself was “specifically authorized” by the dealer’s license, irrespective of the alleged misrepresentation.[15] Under Eli Lilly, the dealer would presumably have no Exemption defense because the specific conduct, an alleged misrepresentation, would not be authorized by law.
Cyr v. Ford Motor Co. went further. It arose from 83 consolidated cases brought by more than 12,000 plaintiffs who had opted out of a class action over allegedly defective transmissions; the Court of Appeals held that manufacturing, selling, leasing, and warranting vehicles is all conduct “specifically authorized” given the industry’s extensive regulation, dismissing the MCPA claims without regard to the specific defect or concealment alleged.[16] That outcome would likely be different under Eli Lilly, as a manufacturer sued over allegedly concealing a known defect must show that the concealment was authorized.
Why This Matters
- MCPA defendants in regulated industries previously had a near-complete exemption, and now face potential liability; and
- That liability includes attorney fees, which may encourage plaintiffs’ lawyers to bring MCPA lawsuits.
- Businesses that previously relied on the Exemption based solely on their industry's licensure or regulation should reassess whether that defense remains viable for their specific conduct under the new standard; and
- Businesses facing existing or threatened MCPA claims should evaluate their exposure under the new “specific transaction or conduct” standard.
Automotive-industry participants should take note of the Eli Lilly decision and factor this shift in the law into any defense strategy for claims asserted under the MCPA.
If you have questions about how this decision may affect your business, please contact Steven Yatvin, Mara Easterbrook Klebaner, or your Barack Ferrazzano contact.
DISCLAIMER: This article provides general information only and does not constitute legal advice.
[1] MCL 445.904(1)(a).
[2] Attorney General v. Eli Lilly & Co., No. 165961, 2026 WL 2212544 (Mich. July 31, 2026).
[3] Id. at *14.
[4] MCL 445.903(1).
[5] MCL 445.902(1)(g).
[6] MCL 445.911(2).
[7] MCL 445.905(1); MCL 445.907(1); MCL 445.910(1).
[8] MCL 445.904(1)(a), 445.904(4).
[9] Smith v. Globe Life Ins. Co., 460 Mich. 446, 465, 597 N.W.2d 28 (1999), overruled by Eli Lilly, 2026 WL 2212544 (Mich. July 31, 2026).
[10] Liss v. Lewiston-Richards, Inc., 478 Mich. 203, 213, 732 N.W.2d 514 (2007), overruled by Eli Lilly, 2026 WL 2212544 (Mich. July 31, 2026).
[11] Eli Lilly, 2026 WL 2212544, at *14.
[12] Id. at *12.
[13] Id. at *15.
[14] Id. at *14 nn.11–12 (citing Jimenez v. Ford Motor Credit Co., No. 322909, 2015 WL 9318913 (Mich. Ct. App. Dec. 22, 2015), and Cyr v. Ford Motor Co., No. 345751, 2019 WL 7206100 (Mich. Ct. App. Dec. 26, 2019)).
[15]Jimenez, 2015 WL 9318913, at *1, *5–7.
[16]Cyr, 2019 WL 7206100, at *1–3.
