Legislation introduced to subject regulated entities to lawsuits under MI Consumer Protection Act

Legislation was introduced in the Michigan House this week to create new and costly litigation against over 80 different regulated businesses, trades and professions under the Michigan Consumer Protection Act (MCPA) by eliminating what’s known as the “regulatory compliance exemption.”

Background: The MCPA currently does not apply to “[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.” In its Globe decision, the Michigan Supreme Court (MSC) interpreted this to mean the following: if a person or company is licensed or approved to engage in a certain business or profession, and the transaction at issue falls within the scope of that license, that conduct falls outside the MPCA.

While these rulings do not give a complete exemption to regulated industries from the MCPA (i.e., if the person or business is operating outside the scope of the occupation or profession, there could be an MCPA claim), they do provide protections.

Why it matters: If the legislation is passed, nearly every industry and profession regulated under state and federal law will be subject to lawsuits, including class action lawsuits, under the MCPA, including:

Go deeper: Read the main bill, HB 5201 and the companion bills, HBs 5199, 5200, 5202.