Michigan Supreme Court Expands Consumer Protection Claims Against Regulated Industries, Including Residential Builders, Design Professionals, and Skilled Trades

A new Michigan Supreme Court ruling has changed the legal landscape for residential builders, design professionals, and skilled trades (“Contractors”), among other regulated businesses—providing expanded rights to Michigan homeowners and consumers. On July 31, 2026, the Michigan Supreme Court issued a landmark decision in Attorney General v. Eli Lilly & Co. that substantially expanded the reach of the Michigan Consumer Protection Act (MCL 445.901 et seq., “MCPA”). In doing so, the Court overruled longstanding court decisions which had broadly interpreted an exemption in the MCPA as immunity for businesses subject to government regulation, such as residential builders, design professionals (architects, engineers, surveyors, etc.), and skilled trades (electricians, plumbers, HVAC, etc.). For Michigan Contractors and homeowners, the practical significance is substantial: Contractors can now be subject to the MCPA, even though they are licensed and regulated by the State of Michigan.

What Changed?

For nearly two decades, prior court decisions provided Contractors with an absolute defense against MCPA claims. Courts previously held that Contractors fell within the MCPA’s exemption because they were regulated by state law. That meant a homeowner could not use the MCPA to pursue a licensed Contractor for deceptive or unfair conduct arising from the construction transaction. In a complete change in course, the new Eli Lilly decision rejects that broad interpretation. Determining that the previous decisions inappropriately interpreted the exemption as broad immunity, the Supreme Court concluded that the exemption should not be read to place an entire regulated industry outside the MCPA regardless of the transaction or conduct, simply because the industry itself requires a license or is regulated. Instead, the focus is on whether the specific transaction or conduct at issue is actually authorized by the applicable law. The burden of proving whether the exemption is applicable is on the person claiming the exemption.

What Does This Mean for Homeowners?

A license no longer provides Contractors immunity from Michigan’s consumer-protection laws. MCPA claims may arise from the Contractor’s conduct, possibly including: misrepresenting the quality or characteristics of work; making misleading representations about a project, contract terms, quality of goods, availability of goods or services, whether goods or services are necessary, price, discounts, completion timeline, or competitors; misrepresenting or failing to reveal material facts; failing to return deposits when required; requesting acknowledgements that the work complies with requirements if not true; gross discrepancies between oral representations and contract terms; grossly overcharging; or engaging in other unfair or deceptive practices. Additionally, this gives Michigan’s Attorney General the ability to investigate and prosecute MCPA claims against Contractors for deceptive practices. Importantly, the MCPA can provide remedies beyond an ordinary breach-of-contract claim. A consumer who suffers a loss because of an MCPA violation may generally seek the greater of actual damages or $250, together with reasonable attorney fees. Additionally, a person who suffers loss as a result of a violation, or the Attorney General, may seek injunctive relief and/or bring a class action on behalf of persons residing or injured in the state for the actual damages caused by unlawful practices.

What Does This Mean for Contractors?

The Eli Lilly decision creates increased risks for Michigan Contractors. As a result, Contractors should no longer assume that compliance with licensing requirements or other industry regulations provides a shield against liability under the MCPA. Considering the Michigan Supreme Court’s ruling, it is important for Contractors to revisit their contracts, advertising, estimates, invoices, and customer communications to ensure that representations are accurate, complete, and capable of being substantiated. Contractors should also consider having their standard contracts and business practices reviewed by counsel familiar with the MCPA and Michigan construction law. Taking these steps proactively can help reduce the risk of an MCPA claim and, if a dispute does arise, provide important evidence demonstrating that the builder acted fairly, transparently, and in accordance with its contractual obligations.

If you have any questions regarding a dispute, consult your attorney or anyone in Clark Hill’s Construction practice group.

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