A large swath of regulated industries are no longer immune from the Michigan Consumer Protection Act, based upon a landmark decision of the Michigan Supreme Court in Attorney General v. Eli Lilly. Paul F. Novak, a Partner in the Detroit office of Weitz & Luxenberg, presented oral argument in the case on behalf of amicus Michigan Association for Justice (MAJ). MAJ supported the Michigan Attorney General’s investigation of possible price gouging by the pharmaceutical company Eli Lilly for its high-priced insulin products.
“Thanks to the Michigan Supreme Court’s decision, companies that engage in price gouging and other deceptive practices will no longer be able to hide behind the fact that they are in regulated industries,” Mr. Novak stated.
Price Gouging Is a Violation of the Michigan Consumer Protection Act
Price gouging is an unfair, unconscionable, or deceptive practice under the Michigan Consumer Protection Act. The Act prohibits charging a price that is “grossly in excess of the price at which similar property or services are sold.” The Act allows the Michigan Attorney General to launch investigations for possible violations of the law. And both the Michigan Attorney General and impacted consumers may bring a claim for damages if a company violates the law.
Eli Lilly Opposes the Attorney General’s Investigation
Insulin is a drug used by millions of people in the United States each year for the treatment of their diabetes. Over the last fifteen years, insulin prices have exploded, increasing at a much faster pace than the general inflation rate.
But when the Michigan Attorney General launched an investigation of possible price gouging of insulin products against pharmaceutical company Eli Lilly, the investigation was stymied by Michigan courts before it ever got underway. Eli Lilly had thwarted the investigation by arguing that two earlier Michigan Supreme Court decisions had given them categorical immunity from the law. These earlier Michigan Supreme Court decisions, Lilly argued, exempted them from the Michigan Consumer Protection Act because their general conduct was regulated by the U.S. Food and Drug Administration.
Michigan Supreme Court Issues New Ruling
Lower courts had found in Lilly’s favor, based upon Michigan Supreme Court precedent, holding that only the Michigan Supreme Court could reverse its earlier decisions. And that is precisely what happened on Friday, July 31, 2026. The Michigan Supreme Court ruled that its earlier decisions, Smith and Liss, were “wrongly decided” and had unduly immunized a broad range of industries by turning “a narrow exception into broad immunity.”
The new decision impacts a broad list of industries that, the Michigan Supreme Court ruled, were judicially immunized in a manner contrary to the plain meaning of the Michigan Consumer Protection Act. Industries listed by the Court included:
- Home builders
- Car dealers
- Car manufacturers
- Mortgage lenders and servicers
- Real estate agents
- Plumbers
- Doctors
- Grocery stores
- Casinos
- Pesticide applicators
“The impact of the decision means that Michigan consumers can obtain remedies for deceptive conduct across a broad range of industries that had been foreclosed by earlier flawed decisions.” Attorney Novak stated. “The Michigan Attorney General successfully restored the Michigan Consumer Protection Act to the same stature it had 27 years ago. Consumers will be able to vindicate their rights across a broad range of industries as the Legislature had intended when it originally passed the law.”
