Background
The Michigan Attorney General obtained circuit-court authorization to issue civil investigative subpoenas concerning whether Eli Lilly and Company’s insulin-pricing and promotional practices violated the Michigan Consumer Protection Act. The Attorney General cited alleged disparities between insulin prices in Michigan and other countries, disparities between branded Humalog and generic Lispro, and allegedly false representations in the promotion of Lispro.
At the same time, the Attorney General sought a declaration that the investigation and any resulting enforcement action were not barred by MCL 445.904(1)(a), which exempts transactions or conduct specifically authorized under laws administered by a regulatory authority. The circuit court granted summary disposition to Eli Lilly under Michigan Supreme Court precedents broadly applying that exemption to generally authorized transactions, and the Court of Appeals affirmed. The parties had stipulated that the Attorney General would refrain from issuing the authorized subpoenas while the declaratory action was resolved.
The Court’s Holding
The Michigan Supreme Court held that the declaratory action presented an actual, justiciable controversy even though the Attorney General had not yet filed an MCPA enforcement claim. The circuit court’s unchallenged probable-cause determination, its authorization of investigative subpoenas, the parties’ dispute over the statutory exemption, and their stipulated pause made declaratory relief available. A petition for investigative subpoenas is not a pleading and need not state a claim under the ordinary pleading rules.
The Court also held that MCL 445.904(1)(a) narrowly exempts only the specific transaction or conduct authorized by law—not every activity within a generally regulated or licensed line of business. It overruled Smith v. Globe Life Insurance Co. and Liss v. Lewiston-Richards, Inc. as inconsistent with the statutory text and concluded that stare decisis did not justify retaining them. The Court reversed the Court of Appeals, vacated the circuit court’s order, and remanded for further proceedings; it did not decide that Eli Lilly had violated the MCPA.
Key Takeaways
- A regulated or licensed business is not categorically exempt from the MCPA merely because its general commercial activity is authorized by law.
- Courts applying MCL 445.904(1)(a) must ask whether the specific transaction or conduct at issue is authorized by law.
- An authorized MCPA subpoena investigation can support a justiciable declaratory dispute even before the Attorney General files a substantive enforcement claim.
- The ruling permits the Attorney General’s insulin-pricing investigation to proceed but does not establish liability against Eli Lilly.
Why It Matters
By overruling Smith and Liss, the Court substantially narrowed a precedent-based exemption that had shielded broad categories of regulated businesses from MCPA claims. Regulated entities may now face MCPA investigations and lawsuits when the challenged conduct itself lacks specific legal authorization, even if their general business activities are licensed or regulated.
The decision also confirms that Michigan’s Attorney General may seek judicial resolution of a disputed MCPA exemption during the investigative-subpoena stage, without first pleading and proving a completed consumer-protection violation.