Advocacy News – Nov. 14, 2024
On Wednesday, Nov. 13, the Senate Finance, Insurance and Consumer Protection Committee advanced legislation to spur costly litigation, including class action litigation, against a host of Michigan businesses.
Why it matters: Senate Bill 1022 is a litigation nightmare for industries regulated by state and federal law because it would repeal the regulatory compliance exemption under the Michigan Consumer Protection Act (MCPA). If the legislation is signed into law, nearly every industry and profession regulated under state and federal law will be subject to lawsuits under the MCPA – in addition to the remedies available to consumers under their regulatory statutes. The MCPA creates additional avenues to class action lawsuits and the awarding of treble damages.
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 Smith v. Glove Life Ins. Co. and Liss v. Lewiston-Richards, Inc. decisions, 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.
Go deeper: Read the coalition letter, organized by the MI Chamber or contact Wendy Block with questions.