Michigan is a hardworking Midwestern state. While we are known as the state that put the world on wheels, the backbone of our economy is family-owned operations and small businesses. But big or small, employers and job creators rely on rules and regulations that are simple, clear and easy to follow. Unfortunately, that foundation is now at risk, not just from a case before our state Supreme Court, but from a broader national trend that is seeping into states like ours.
Across the country, we are witnessing an aggressive effort from activist Attorneys General who want to expand toxic litigation and further empower trial lawyers to target locally owned companies. In my view, Michigan is the current battleground.
A case before the Michigan Supreme Court threatens to dismantle a long-standing legal framework that has governed how licensed professionals and regulated industries operate for decades. If the court eliminates what’s known as the “regulatory compliance exemption” under the Michigan Consumer Protection Act, it won’t just tweak the law; it will upend it. The case currently before the court, Nessel v. Eli Lilly & Co., could eliminate this exemption. If that happens, Michigan won’t be an outlier. Sadly, it will become a case study in what happens when litigation replaces regulation.
Michigan has been labeled a “judicial hellhole” three years in a row. Its legal climate is estimated to cost the state 100,000 jobs annually. It also imposes a hidden tort tax of roughly $3,000 on the average household. Without a regulatory compliance exemption, those costs would only continue to rise.
That’s exactly why I’ve introduced House Bill 5725.
At its core, the legislation codifies a commonsense principle: if a business or professional is already complying with state and federal regulations, they should not be subject to duplicative lawsuits under a separate consumer protection statute. In other words, one set of rules, not multiple or inconsistent standards.
In states where similar legal expansions have taken hold, businesses face a patchwork of overlapping legal standards, skyrocketing litigation costs, and a flood of opportunistic lawsuits. Entire industries, from pharmaceuticals to financial services, have been forced to divert resources from innovation and job creation and toward legal defense.
Nationally, this trend has been fueled by a growing alliance between activist regulators and the plaintiffs’ bar. The result is a litigation-first approach to policymaking. It’s a misguided approach that bypasses legislative debate and imposes sweeping changes through the court system.
That approach may benefit trial lawyers, but it does not benefit workers, consumers or small businesses.
Michigan has fallen behind our neighboring states of late, as the repeal of right-to-work and far-left green energy mandates make us a tougher state to start a business or a family. If Michigan follows further down this path, the negative consequences will be immediate.
Licensed professionals, from doctors and pharmacists to financial advisors, would face a new layer of legal exposure despite already operating under strict regulatory oversight. Regulated industries would be forced to navigate an uncertain and constantly shifting legal landscape. And small businesses, which lack the legal resources of large corporations, would be especially vulnerable.
In an already fragile national economy marked by inflation due to the Biden administration’s reckless spending policies, supply chain challenges, and global competition, the last thing states like Michigan should be doing is making it exponentially more challenging to do business. Yet that is precisely what happens when courts are used to rewrite the rules midstream.
We should be reinforcing a legal climate that values consistency and clarity. Instead, an activist Attorney General Dana Nessel is proposing amounts to a giveaway to trial lawyers that may align with a broader, far-left national political agenda. But it comes at a real cost to our state’s economy.
Certainty matters. Stability matters. Predictability matters.
Michigan can either follow the path of uncertainty and litigation, or it can stand for clarity, stability and predictability.
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