Attorney General v Eli Lilly and Company
Key claim: The Michigan Supreme Court held that the MCPA exemption in MCL 445.904(1)(a) covers only specifically authorized transactions or conduct—not general regulated activity—and therefore overruled Smith and Liss, allowing the Attorney General’s insulin-pricing investigation of Eli Lilly to proceed.
Abstract
Michigan Supreme Court opinion decided 2026-07-31. Michigan Supreme Court Lansing, Michigan
Syllabus Chief Justice: Justices: Megan K. Cavanagh Brian K. Zahra Richard H. Bernstein Elizabeth M. Welch Kyra H. Bolden Kimberly A. Thomas Noah P. Hood
This syllabus constitutes no part of the opinion of the Court but has been Reporter of Decisions: prepared by the Reporter of Decisions for the convenience of the reader. Kimberly K. Muschong
ATTORNEY GENERAL v ELI LILLY AND COMPANY
Docket No. 165961. Argued November 5, 2025 (Calendar No. 1). Decided July 31, 2026.
The Attorney General filed a petition in the Ingham Circuit Court, requesting authorization
to issue subpoenas related to a civil investigation into the practices of Eli Lilly and Company under
the Michigan Consumer Protection Act (MCPA), MCL 445.901 et seq., alleging that there was
probable cause to believe that Eli Lilly had artificially increased the list prices of its insulin
medications in violation of MCL 445.903(1)(z), given the disparity in pricing between its insulin
products sold in Michigan and its products sold in other countries and the disparity in pricing
between Eli Lilly’s branded drug, Humalog, and its generic version, Lispro. The Attorney General
also argued that there was probable cause to believe that Eli Lilly had violated MCL 445.903(1)(i)
by making false representations in its promotion of Lispro.
Simultaneously, the Attorney General filed a complaint for declaratory relief under MCR
2.605, seeking a declaration that the civil investigation, and any resultant lawsuit, was not
foreclosed by MCL 445.904(1)(a), which provides an exemption from the MCPA for “[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.” The Attorney General
argued that Smith v Globe Life Ins Co, 460 Mich 446 (1999), and Liss v Lewiston-Richards, Inc,
478 Mich 203 (2007)—which both held that this exemption broadly encompasses general
transactions authorized by law, even where the specific alleged misconduct is prohibited—were
wrongly decided.
The circuit court issued an order concluding that probable cause existed to believe that Eli
Lilly violated the MCPA and authorizing the Attorney General to issue civil investigative
subpoenas. Eli Lilly moved to stay the proceedings, including the issuance of subpoenas, pending
resolution of the Attorney General’s complaint for declaratory relief. Eli Lilly also moved for
summary disposition under MCR 2.116(C)(8), arguing that the sale of pharmaceuticals was a
regulated activity and thus exempt from the MCPA under MCL 445.904(1)(a) under Smith and
Liss.
In a stipulated order, Eli Lilly agreed to withdraw its pending motion to stay without
prejudice, and the Attorney General agreed to refrain from issuing subpoenas until the declaratory-
judgment action resulted in a decision permitting the Attorney General to proceed with her
investigation or another event took place making issuance of subpoenas appropriate. The Attorney General filed a cross-motion for summary disposition under MCR 2.116(I)(1) and MCR 2.116©(9), arguing that Smith and Liss were wrongly decided and that the MCL 445.904(1)(a) exemption should be narrowly construed.
The circuit court, Wanda M. Stokes, J., granted summary disposition in favor of Eli Lilly
and dismissed the Attorney General’s complaint, ruling that the Attorney General’s MCPA claims were foreclosed by Smith and Liss. The Court of Appeals, RIORDAN, P.J., and BORRELLO and BOONSTRA, JJ., affirmed in an unpublished per curiam opinion, issued June 22, 2023 (Docket No. 362272). The Attorney General sought leave to appeal in the Supreme Court, which directed and heard oral argument on the application. 513 Mich 1003 (2024). Following oral argument, the Supreme Court granted the application, directing the parties to address (1) whether the Attorney General adequately pleaded a claim that Eli Lilly violated the MCPA, (2) whether it was necessary for the Attorney General to adequately plead a violation of the MCPA for a court to determine whether MCL 445.904(1)(a) applies, (3) whether Smith and Liss correctly interpreted MCL 445.904(1)(a), and (4) if Smith and Liss were incorrectly decided, whether they should nonetheless be retained under principles of stare decisis. ___ Mich ___; 18 NW3d 513 (2025).
In an opinion by Justice HOOD, joined by Chief Justice CAVANAGH and Justices WELCH
and THOMAS, the Supreme Court held:
When determining whether an MCPA claim falls under the MCL 445.904(1)(a) exemption,
courts should consider whether the specific transaction or conduct at issue, rather than the general transaction, is authorized by law. Because Smith and Liss were wrongly decided and unsupported by stare decisis principles, they were overruled. The Court of Appeals decision was reversed, the circuit court’s order was vacated, and the case was remanded to the circuit court for further proceedings.
1. The Attorney General adequately pleaded a request for declaratory relief. Under MCL
445.907(1), the Attorney General can petition the circuit court to authorize an investigation into an alleged MCPA violation, and the circuit court, if it finds probable cause to believe a person has engaged, is engaging, or is about to engage in a method, act, or practice that is unlawful under the MCPA, may issue a subpoena compelling a person to appear before the Attorney General and answer under oath questions relating to the alleged violation. In this case, the Attorney General filed a petition requesting that the circuit court authorize civil investigative subpoenas on the basis of suspected violations of MCL 445.903(1)(z) and MCL 445.903(1)(i). The circuit court found probable cause, which authorized the Attorney General to serve investigative subpoenas on Eli Lilly or others, and this finding is not being challenged on appeal. Both parties have agreed to a stay of proceedings, effectively pausing the issuance of subpoenas and any challenge to them. Petitions for civil investigative subpoenas are not pleadings, are not required to state a claim under MCR 2.111(B)(1), and are not subject to attack for failure to state a claim under MCR 2.116©(8). Instead, the purpose of the investigative stage is to explore and provide context for subsequent claims when probable cause exists. The circuit court found probable cause and authorized investigatory subpoenas based on allegations that Eli Lilly had possibly violated the MCPA through its insulin pricing practices, but the Attorney General’s request for subpoenas is not, in and of itself, an MCPA enforcement action. The only pleading filed in this case was the Attorney General’s complaint for declaratory relief.
2. Under the circumstances of this case, the Attorney General did not have to first bring a
separate claim alleging an MCPA violation for the applicability of MCL 445.904(1)(a) to be litigated. Generally, a circuit court may grant declaratory relief when ther
Why this matters
By narrowing the MCPA’s regulated-industry exemption to only specifically authorized conduct, the Michigan Supreme Court materially expands the Attorney General’s consumer-protection authority over businesses in regulated sectors, including pharmaceuticals, insurance, and homebuilding. Employers previously shielded under Smith and Liss now face renewed exposure to MCPA investigations and enforcement actions, while consumers gain broader recourse for deceptive practices in otherwise regulated industries.