(March 21, 2007) The House Judiciary Committee heard testimony on House Bill 4217 on Wednesday.  Sponsor Representative Robert Jones was present with Ed Blade, a former Assistant Attorney General and judge.  The bill is intended to respond to the Supreme Court decision in Smith v. Globe Life Insurance Company, which applied the exemption language in the Consumer Protection Act too broadly to professions regulated by the state.  The bill contains new language that restores the language to its original legislative intent and the interpretation of the Court of Appeals that Globe Life reversed, according to Mr. Blade.  Former Rep. Lipsey also testified.  He sponsored a similar bill in the last session.  He spoke about how the recent cable/video service bill makes it important to address this issue in order to prevent unscrupulous companies from taking advantage of that regulation to claim an exemption from the Consumer Protection Act.

The other side of this issue was presented by Greg McLellan representing the Michigan Association of Homebuilders and the Michigan Association of Realtors.  These organizations oppose the bill.  When the act was originally written, he stated, business was supportive and the act did not create any problems for regulated professions.  Court rulings changed this.  He described one Ann Arbor case involving earnest money held by a realtor in which there was $300 in dispute that normally would have been resolved as a regulatory matter by the Bureau of Commercial Services.  A filing under the Consumer Protection Act resulted in $21,000 in legal fees (the realtor had already returned the $300).  The Michigan Association of Homebuilders testified in opposition to the bill.

Supporters of the bill who turned in cards included the Michigan Advocacy Project, AARP, and UAW/CAP.  Several others filed cards opposing the bill, including the Michigan Retailers Association, the Michigan Telecommunications Association, AT&T, and the Life Insurance Coalition. 

Governor Granholm stated in her 2004 State of the State that she supported House Bill 5046, a similar bill introduced in 2003.

Committee Chair Condino plans further work on the bill.  A work group may be convened to discuss amendments.