Michigan Supreme Court

Introduction

After ranking #8 in last year’s Judicial Hellholes® report, the Michigan Supreme Court has moved to the Watch List — largely because it has yet to issue several high-profile, long-awaited decisions. ATRF will closely monitor whether the Court takes seriously the concerns highlighted in recent reports and works to rein in lawsuit abuse, or whether it continues down an activist path that expands liability and disregards longstanding, commonsense precedent.

Expansive Liability for Employers

In two decisions issued in 2025, the Michigan Supreme Court continued its trend of putting employers in the hot seat by expanding their liability exposure.

First, the Court broadened employer exposure to retaliatory discharge claims. These claims are intended to be a narrow departure from at-will employment, which ordinarily allows an employer to terminate an employee for any reason. Michigan precedent previously allowed an employee to bring such a claim if an employer fired the employee for refusing to violate a law and the reason for the discharge was the employee’s exercise of a right conferred by a “well-established legislative enactment.” Instead, in Janetsky v. County of Saginaw, the majority allowed such lawsuits when an employee is fired and asserts it was because he or she “reasonably and in good faith believed they were remedying or preventing a violation of law.” The case involved an assistant county prosecutor who was terminated after taking issue with a plea deal entered by her supervisor.

Justice Brian Zahra authored a strong dissent, warning that the majority had loosened the standard by authorizing lawsuits whenever a terminated employee can claim the employee was trying to achieve compliance with his or her own understanding of the law. “This is an incredibly nebulous notion that may result in a ‘chilling effect’ on employers,” Justice Zahra observed, “discouraging them from engaging in lawful activities for fear that their employees may disagree with the lawfulness of their actions.” Justice Zahra also would have affirmed the Court of Appeals’ dismissal of the employee’s false imprisonment claim, which was based on her supervisor placing his hand on a doorknob during an argument about the matter that lasted for no more than 30 seconds.

A few days later, the Court found unenforceable a provision in an employment agreement that required an employee to bring any claims — such as wrongful discharge or harassment — within six months of the alleged incident. In Rayford v. American House Roseville I, LLC, the Court overturned a 2005 precedent and held that courts must now apply a reasonableness analysis to employee stipulation agreements that set timelines for filing suit. The majority reasoned that disparities in bargaining power between employers and employees, combined with the use of “boilerplate” employment contracts, warrant closer judicial scrutiny. By bypassing the clear terms of a voluntary contractual agreement, the Court opened the door for greater judicial intervention in private employment relationships.

In another forceful dissent, Justice Zahra criticized the majority’s reasoning as “overreaching activism” that undermines contractual certainty and subjects employers to excessive liability.

Stare Decisis No More

Changes Coming to Premise Liability?

The Michigan Supreme Court has signaled a willingness to discard longstanding precedent — particularly in the context of premises liability. Last year’s report highlighted troubling decisions in which the Court expanded slip-and-fall liability. Now, the Court is considering two new cases that again test its commitment to stare decisis.

The first case, Molitoris, concerns a landowner’s duty to warn of hidden dangers. The case arose after a parishioner slipped on black ice while volunteering at a church and sued for ordinary negligence and premises liability. After the plaintiff dropped her negligence claim, the trial court granted summary disposition to the church. The Court of Appeals affirmed, applying well-settled Michigan law that limits a landowner’s duty to licensees to warn licensees (those who enter property for noncommercial purposes) to hidden hazards that the owner actually knows exist.

In the second case, Radke, the plaintiff fell through an uncovered basement opening at a friend’s home where construction was underway. He sued both the homeowner and contractor for negligence. The contractor successfully argued at trial that it had no duty to warn of open and obvious dangers. Although the Court of Appeals affirmed — relying on Stitt, which for 25 years has defined the limited duty owed to licensees — the Supreme Court remanded the matter for reconsideration in light of last year’s decisions undermining traditional premises liability distinctions. On remand, the Court of Appeals stood by its earlier ruling.

The Michigan Supreme Court held oral arguments in both these cases in October 2025. These cases present the Supreme Court with a pivotal choice: whether to reaffirm the existing framework that distinguishes duties owed to invitees, licensees, and trespassers, or overturn Stitt and adopt the Restatement of the Law (Third) of Torts’ broader duty of “reasonable care” that applies to any person who enters a landowner’s property. The traditional distinctions are premised on the policy that landowners have a duty to inspect and make their premises safe when the visit is tied to their commercial interests (i.e., they are profiting from the guest’s presence), a duty to protect against known hazards when they are not profiting, and no duty when the person injured is a trespasser.

One Court of Appeals judge in Molitoris openly encouraged the high court to embrace the Restatement standard and “jettison” distinctions based on the plaintiff’s status. Should the Court do so, it would not only disrupt decades of precedent but also fundamentally reshape Michigan’s premises liability landscape.

Consumer Protection

Attorney General Dana Nessel has urged the Michigan Supreme Court to overturn long-standing precedent to allow her office to investigate a pharmaceutical company under the Michigan Consumer Protection Act (MCPA). While the MCPA was enacted to protect Michigan consumers from unfair business practices, the legislature intentionally carved out transactions or conduct that is already regulated and specifically authorized by state or federal agencies. The Michigan Supreme Court has applied this statutory exemption to preclude MCPA against regulated industries in Smith v. Globe Life Insurance Co. (1999) and Liss v. Lewiston-Richards, Inc. (2007).

Despite these clear precedents, attorney general has invoked the MCPA to accuse Eli Lilly of engaging in unfair business practices in setting prices for its products, in this case, insulin.

The lower courts agreed with Eli Lilly, finding that its pricing of pharmaceuticals falls within the MCPA’s regulatory exemption. Now, the Michigan Supreme Court faces yet another test of its commitment to stare decisis. It must decide whether to reaffirm Smith and Liss — both roughly two decades old — which have consistently protected federally regulated business activities from duplicative litigation.

The American Tort Reform Association (ATRA) filed an amicus curiae brief in this case, emphasizing the importance of maintaining the careful balance between consumer protection and regulatory consistency. The MCPA was designed to further important policy goals while recognizing that consumers in regulated industries, such as pharmaceuticals, are already protected by federal agencies like the FDA. Overturning these two key precedents, ATRA cautioned, would have far-reaching ripple effects across numerous industries and could significantly burden smaller Michigan-based businesses and licensed service providers.

Limits on Medical Liability Damages at Risk

Now, Chatman v. Owens presents the next major test. Currently before the Court of Appeals, the case also seeks to dismantle established precedent upholding Michigan’s statutory limits. These limits, which are adjusted annually, currently allow plaintiffs in medical liability cases to recover up to $586,300 in noneconomic damages or $1,047,000 in cases involving certain permanent disabilities, on top of unlimited economic damages (such as medical expenses and lost income). If Michigan courts invalidate the statute, the jump in liability exposure, settlement demands, and awards could drive physicians out of the state — creating significant consequences for the healthcare system.

Legislative HeatCheck

This summer, the American Tort Reform Association’s Legislative HeatCheck placed the Michigan Legislature on “Heat Watch.” Several pending bills raise red flags for potential lawsuit abuse, including a bill that would create a False Claims Act, which would significantly expand potential liability for those doing business with or receiving funds from Michigan state and local governments.