Michigan consumers may have a stronger path to challenge deceptive or unfair business practices after the state’s highest court narrowed a legal exemption that had limited the reach of the Michigan Consumer Protection Act for more than two decades.

On July 31, 2026, the Michigan Supreme Court ruled in Attorney General v. Eli Lilly & Co., siding with Michigan Attorney General Dana Nessel in a dispute over whether the state could use the Michigan Consumer Protection Act (MCPA) to investigate alleged misconduct involving insulin pricing.

The decision overturned earlier interpretations of the law that had broadly exempted businesses when their general activity was authorized or regulated by state or federal law.

Under the court's new interpretation, the exemption applies more narrowly: the specific conduct at issue must be authorized, rather than simply the type of business or transaction being regulated.

Consumer advocates say that distinction could restore the MCPA as an important enforcement tool against deceptive and unfair practices across industries ranging from financial services and home repair to automotive sales and prescription drugs. The National Consumer Law Center called the decision a major restoration of consumer protections in Michigan.

Why One Legal Exemption Had Such a Large Impact

The Michigan Consumer Protection Act is designed to prohibit unfair, unconscionable, or deceptive practices in trade and commerce.

But previous Michigan Supreme Court decisions had interpreted an exemption in the law broadly.

In Smith v. Globe Life Insurance Co. in 1999 and Liss v. Lewiston-Richards, Inc. in 2007, the court developed an interpretation that could exempt a business from MCPA liability when the general transaction or activity it performed was authorized by law—even when the allegedly deceptive conduct itself was not specifically authorized. Michigan's Attorney General had argued that this interpretation went far beyond the language and purpose of the statute.

The practical result was significant.

According to the Michigan Attorney General's office, the earlier interpretation had been used to shield transactions involving products and services such as automobiles, home construction and repair, telecommunications and prescription medications from certain MCPA claims.

The new ruling changes that analysis.

A company cannot necessarily avoid the Michigan Consumer Protection Act merely because it operates in a regulated industry. The question becomes whether the specific conduct being challenged was affirmatively authorized.

The Case Started With Insulin Pricing

The dispute began with an investigation into pharmaceutical company Eli Lilly.

In 2022, Michigan Attorney General Dana Nessel sought to investigate aspects of the company's insulin pricing practices under the MCPA.

Eli Lilly argued that its insulin sales were exempt because selling FDA-approved medications is an authorized and regulated activity. Lower courts agreed, relying on the Michigan Supreme Court's earlier decisions in Smith and Liss.

The Attorney General appealed, arguing that approval to sell insulin should not automatically exempt every business practice connected to those sales from scrutiny under Michigan's consumer protection law.

The Michigan Supreme Court ultimately agreed with the narrower interpretation of the exemption, overturning those earlier precedents.

That does not mean the court determined that Eli Lilly engaged in unlawful pricing practices. Rather, the decision addresses whether Michigan's consumer protection statute can be used to investigate or pursue conduct that is not itself specifically authorized by regulators.

That distinction is important: the ruling restores a legal pathway for scrutiny. It does not resolve the underlying allegations against the company.

The Decision Reaches Far Beyond Prescription Drugs

Although the case arose from an insulin-pricing investigation, its significance extends well beyond the pharmaceutical industry.

The MCPA applies broadly to consumer transactions and prohibits numerous categories of deceptive and unfair conduct.

The National Consumer Law Center says the ruling may strengthen consumers' ability to challenge practices involving areas such as:

• Deceptive automobile sales

• Predatory home-repair practices

• Hidden rental fees

• Financial scams

• Other unfair or misleading consumer transactions

NCLC and Michigan legal-aid organizations had argued that the previous interpretation left many consumers with limited remedies because so many businesses operate within industries that are regulated in some form.

The court's decision does not mean every consumer complaint will succeed. Plaintiffs will still need to establish that the conduct violates the law, and other exemptions or legal defenses may apply.

What changes is the ability to bring or investigate certain claims in the first place.

State Consumer Protection Laws Matter More Than Many People Realize

Consumer protection is often associated with federal agencies such as the Federal Trade Commission or Consumer Financial Protection Bureau.

But states maintain their own consumer-protection statutes and enforcement agencies, and those laws can provide additional routes for addressing unfair or deceptive practices.

That matters because the protections available to consumers can differ substantially depending on where they live.

State attorneys general may investigate businesses, seek injunctions, negotiate settlements or pursue other remedies under state law. In many states, consumers themselves may also have private rights of action depending on the statute and circumstances.

Michigan's ruling illustrates why the interpretation of a single state-law exemption can influence consumer rights across an enormous range of everyday transactions.

What the Ruling Could Mean for Financial Consumers

For consumers making major financial decisions, the ruling is particularly relevant because financial harm does not always come from an obviously fraudulent transaction.

Problems can arise through:

• Misleading pricing or fee disclosures

• Representations that omit important limitations

• Deceptive financing terms

• Misleading sales practices

• Hidden costs

• Unfair servicing practices

• Misrepresentations surrounding products or services

Whether a specific practice violates Michigan law will depend on the facts and applicable statutes. But a regulated business can no longer rely as broadly on the argument that regulation of its industry alone removes its conduct from the MCPA.

That creates a potentially stronger accountability mechanism for Michigan consumers.

A Bigger Shift in the Consumer Protection Landscape

The decision also arrives during a period when states are taking a more visible role in financial and consumer regulation.

Federal and state governments often have overlapping enforcement authority, but the strength of state law becomes especially important when federal priorities, regulations or enforcement activity change.

NCLC specifically pointed to that dynamic in welcoming the Michigan ruling, arguing that robust state consumer-protection laws provide another layer of accountability for consumers.

For individuals, the practical lesson is straightforward: federal law is not the only source of consumer rights.

Someone facing a disputed transaction, deceptive business practice or financial scam may have protections under state law that differ from—or extend beyond—federal remedies.

What Michigan Consumers Should Take From the Decision

The ruling does not create an automatic refund, guarantee a lawsuit will succeed or make every undesirable business practice illegal.

It does, however, change the legal framework governing which conduct may be challenged under the Michigan Consumer Protection Act.

Consumers should continue to:

• Keep contracts, receipts and account statements.

• Save advertisements and written representations made before a purchase.

• Document disputed fees or charges.

• Retain emails, text messages and other communications with businesses.

• Review financing agreements before signing.

• Report suspected scams or deceptive practices to appropriate regulators.

• Seek qualified legal guidance when a significant financial loss is involved.

Documentation can become especially important when a dispute turns on what a business represented, disclosed or promised.

Why This Decision Matters Beyond Michigan

The Michigan case also highlights a broader principle in financial wellness: consumer protection is part of financial protection.

Budgeting and saving matter, but consumers can still suffer serious financial damage when important information is concealed, products are misrepresented, or business practices make it difficult to understand the true cost of a transaction.

Strong financial decision-making therefore involves more than managing money after a transaction occurs. It also means understanding your rights, reviewing agreements carefully and knowing where to turn when something appears wrong.

The Michigan Supreme Court's ruling restores a tool designed to address that part of the financial equation.

For Michigan consumers, it could mean a greater ability to challenge conduct that previously fell outside the practical reach of one of the state's primary consumer-protection laws.

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