Consumer Protections May Be Restored By The Michigan Supreme Court
The Michigan Consumer Protection Act (MCPA) is one of the most inefficient sets of consumer protections in the United States. As discussed in our post on the topic, the MCPA has been gutted by two Michigan Supreme Court cases that severely limited the scope of the act. The act, in its original form, broadly bans Unfair, Deceptive, and Abusive Practices (UDAP) in the areas of trade or commerce. There was an exception, however, for transactions "specifically authorized under laws administered by a regulatory board or officer acting under statutory authority of this state or the United States." This exception was designed as a narrow use case only to be used if a specific transaction or practice was specifically permitted by a regulatory law.
Unfortunately, the exception's power was wildly misunderstood in the 1999 Michigan Supreme Court case of Smith v. Globe Life Insurance, where the court interpreted the exception to apply to Globe Life Insurance because they were regulated by the state commissioner of Insurance. This functionally dismantled the MCPA, as whole industries of business could not be held accountable under the MCPA as long as their activity was regulated in some way. The final nail in the coffin for Michigan's consumer protections was the 2007 Michigan Supreme Court Case of Liss v. Lewiston-Richards. The court ruled that because a licensed home builder's "transaction" of building a residential home was "specifically authorized", the MCPA could not be enforced against it, even if parts of their conduct within the "transaction" of building the home were unfair, deceptive, or considered abuse.
For years since these cases, consumers paid the price. If a hospital overbilled a patient, they were found not liable because the practice of medicine was regulated under the law. If there was an engineering failure within a model of a car manufacturer, the manufacturer cannot be found liable because automobile sales were regulated under the law. Consumers were without protection and without help.
A new case in front of the Michigan Supreme Court may fix our broken consumer protections.
In Attorney General v. Eli Lilly and Co., the pharmaceutical manufacturer Eli Lilly is being investigated regarding its insulin pricing scheme for diabetic Michiganders. Attorney General Dana Nessel also sought to confirm that Eli Lilly would not be exempt from the MCPA. While Eli Lilly was originally found to be exempt, the Michigan Supreme Court is considering an appeal that would overrule Smith v. Globe Life Insurance and restore the MCPA to its former glory.
Many organizations came out in favor of overruling the 1999 case, including the Michigan Poverty Law Program, one of our consumer protection coalition partners. In their amicus brief, they document the harms that consumers, especially low-income consumers, continue to face due to businesses freely acting unfairly or deceptively without any accountability.
The MCPA currently covers almost no business and serves practically no use for consumers in trouble. The issues that Protect MI Families looks to address, including bad faith insurers, workplaces mistreating employees, data privacy laws, and much more, are so widespread because our Supreme Court removed the teeth of our consumer protection act in 1999. The Supreme Court now has the chance to fix their mistake by narrowing the exemption back to its original intent and restore critical consumer protections for Michiganders.
The Supreme Court is expected to decide on the case by the end of July. We wait with bated breath to see if Michigan's Consumer Protections can be restored to their formal glory, and make our job as advocates for consumer protection just a little easier.
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