The Hidden Risks of Adding Children as Joint Owners on Your Home

A common estate planning question is whether adding adult children as co-owners of a home is a simple way to avoid probate. Many families are familiar with instances in which this approach worked seamlessly, with property transferring from parents to children without court involvement.

While joint ownership may be appropriate in limited circumstances, it often creates legal, tax, and financial risks that undermine broader estate-planning goals.

Exposure to Creditors, Lawsuits, and Divorce

When a child becomes a co-owner, that ownership interest is generally exposed to the child’s creditors. If the child is sued, files for bankruptcy, or goes through a divorce, their interest in the property may be subject to liens, judgments, or division in a divorce proceeding.

Even if you have paid the mortgage, taxes, and insurance, the home can become entangled in your child’s financial issues. This exposure can force negotiations with third parties or complicate future sales and refinancing.

Gift Tax and Reporting Obligations

Adding a child as a co-owner is treated as a present gift for federal tax purposes. Depending on the value of the interest transferred and the property’s fair market value, you may be required to file a federal gift tax return (Form 709).

In 2026, gifts exceeding $19,000 per individual or $38,000 per married couple must be reported. While gift tax is rarely owed at the time of transfer due to the high lifetime exemption ($15 million for individuals or $30 million for married couples in 2026), the gift in excess of the annual exclusion amount reduces that lifetime exemption and can affect long-term estate and transfer tax planning.

Reduced Step-Up in Basis and Higher Capital Gains Taxes

One of the most significant tax consequences involves the loss of a full step-up in basis. If full ownership is retained until death, beneficiaries typically receive a step-up in basis to fair market value, reducing capital gains taxes if the property is later sold.

When a child is added as a co-owner during your lifetime, the child generally receives a carryover basis on the transferred portion. At death, only the portion you still own receives a step-up. This partial step-up can significantly increase the family’s capital gains taxes.

Unintended Outcomes If a Child Dies First

Joint ownership can also produce unintended results if a child predeceases you. If the child holds a tenancy-in-common interest, that share becomes part of the child’s estate, potentially triggering probate and introducing new co-owners, such as a surviving spouse or minor children.

If the child holds joint tenancy with rights of survivorship, the child’s interest passes back to the other owner(s), which may unintentionally exclude that child’s own children from inheriting a share of the home. Either scenario can disrupt family expectations and, in some cases, require court involvement to resolve.

Consider Safer Estate Planning Alternatives

For many families, alternatives such as a revocable living trust or an enhanced life estate deed, commonly called a “Lady Bird” deed, can avoid probate while preserving control, minimizing tax exposure, and reducing risk. These tools are often more flexible and better aligned with comprehensive estate planning objectives.

Before adding a child to your deed, consulting with Varnum’s estate planning attorneys can help ensure your plan protects your assets, your family, and your long-term goals.

To Amend or to Amend and Restate – Which Do You Need?

Community association attorneys are often asked whether an association should pursue a targeted amendment to its governing documents or undertake a full amended and restated project. The answer depends.

Before weighing those options, it helps to understand which documents are typically involved.

  • For condominiums, these typically include the Declaration of Condominium, the Articles of Incorporation, and the Bylaws.
  • For homeowner’s associations, the governing documents are generally the Declaration of Covenants, the Articles of Incorporation, and the Bylaws.
  • For cooperative associations, these documents are the Proprietary Lease or Owner’s Agreement, the Articles of Incorporation, and the Bylaws.

In most cases, amending or amending and restating these documents requires a vote of membership. The approval threshold varies and is set forth in the document being amended.

Individual Amendments

An individual amendment revises a specific provision within a recorded document and is the most common type of amendment. This option is often appropriate when an association needs to make only a few changes while keeping the remainder of the document intact.

Amended and Restated Projects

An amended and restated project revises and republishes the entire document. This approach is typically recommended when an association plans to make several changes or where broader updates are needed. Common scenarios include:

  • Incorporating changes required or permitted by the newly enacted Florida Statutes
  • Removing outdated developer-related provisions following turnover to member control
  • Consolidating multiple prior amendments into a single, streamlined document for clarity and ease of use

How Amendments Are Prepared

Amendments and amended and restated documents are generally prepared in one of two ways:

  1. Redlined Format: When changes are limited or when transparency is especially important, associations may request a redlined version showing additions and deletions. Florida law requires additions to be underlined and deletions struck through. The format is most commonly used for individual amendments.
  2. Clean rewrite with statutory notice: When a provision, or entire document, is substantially rewritten, Florida Statutes allow for a clean version without redlining, provided it includes a notice stating: “Substantial rewording of Declaration/Articles/Bylaws. See provision ____ for present text.” This method is often best suited for amended and restated projects.

How the Process Works

Ideally, attorneys work with board members or a board-appointed committee to draft the proposed amendment or amended and restated document. Boards may then present the proposal directly to membership for a vote or hold a town hall meeting to review changes and gather feedback. Any input received can be evaluated and, if appropriate, incorporated before the final vote.

Ultimately, approval depends on meeting the voting requirements set forth in the applicable governing document.

Choosing the Right Approach

The right approach depends on several factors, including:

  • The number of amendments being considered
  • The age of the current governing documents
  • Recent statutory changes
  • Whether developer-related language needs to be removed
  • The volume of prior amendments already in place

For guidance in determining which choice works best for your community association, contact your Varnum community association attorney.

Texas SB 140 After the November Settlement: Consent In, Cold Texting Out

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Texas Senate Bill 140 (SB 140), effective September 1, 2025, expands the Texas Business & Commerce Code by treating text messages as “telephone solicitations”. The law also links violations of Chapters 302, 304, Texas No‑Call and caller ID, and 305, certain mobile‑call limits, to the Texas Deceptive Trade Practices Act (TDTPA), opening the door to enhanced remedies and uncapped repeat recoveries.

The takeaway for clients and marketers is clear: Unless an exemption applies, businesses conducting direct marketing must register with the Texas secretary of state, post a $10,000 security bond, and file quarterly reports before sending text messages to Texas consumers.

What the November Settlement Changed

In a November 2025 settlement resolving litigation over SB 140’s application to text messaging, Texas agreed that consent-based marketing texts that would otherwise trigger the law are exempt from Chapter 302’s telemarketing registration, bonding, and quarterly-reporting requirements.

As a result, well-run opt-in SMS programs previously subject to the law no longer need to register or post the $10,000 bond solely because they send marketing texts, provided the programs are genuinely consent-based and not a pretext for cold outreach. This is a meaningful win for compliant programs, but it is not a free pass.

Chapters 304 and 305 remain fully in force, and the TDTPA linkage remains intact. Marketers must continue to comply with the Texas No-Call law for text messages, including scrubbing the No-Call list and honoring the 60-day prohibition window after numbers are added. Caller ID spoofing or interference is prohibited.

Any compliance failure, or any deceptive or misleading content, may trigger private litigation under the TDTPA. Federal law remains unchanged, so programs must continue to comply with the Telephone Consumer Protection Act (TCPA) consent standards and promptly honor opt-out requests.

How to Operate Consent-Based Programs in Texas

Statements by the attorney general in the settlement reflect enforcement intent but do not create binding precedent for courts or nonparties. Courts may interpret SB 140 differently, and private litigants may continue to bring TDTPA or other state-law claims.

For opt-in programs, organizations may forgo Chapter 302 registration and bonding in Texas while strengthening the controls that most directly affect risk:

  • Explicit and informed consent capture
  • Clear disclosures at or before sign-up
  • Robust opt-out mechanics
  • Message content that avoids deception or harassment

Because the settlement is nonbinding, organizations should memorialize their reliance in a short internal memorandum describing consent workflows, opt-out processing, and vendor governance, and maintain an auditable record of consent timestamps, disclosure screenshots, and suppression-list synchronization.

Direct marketing that includes prospecting, third-party lead lists, or texts without prior consent remains subject to Chapter 302. Companies deploying such marketing on their own behalf should register with the secretary of state, post the $10,000 bond, and file quarterly reports unless a separate statutory exemption applies.

Lingering Ambiguities and How to Manage Them

Two issues remain unresolved. First, the “former or current customer” exemption in Section 302.058 is risky because the statute does not define “customer”. Organizations relying on this exemption should apply defensible criteria and document the basis for inclusion.

Second, SB 140’s reference to outreach to “a purchaser located in this state” creates uncertainty, given real-time location challenges in SMS messaging. These risks are best managed conservatively by maintaining strong consent for Texas numbers, scrubbing against the No-Call list, and documenting compliance decisions.

A Short Compliance Checklist

  • Texas No‑Call. Chapter 304 applies to text messages sent to mobile numbers. Do not send marketing texts to numbers on the list more than 60 days after they appear, and caller‑ID spoofing or interference is prohibited.
  • Marketing Alignment. Align on registration determinations or well‑documented exemptions, consent standards and proof, No‑Call scrubbing, opt‑out mechanics, disclosure placement (e.g., landing pages before purchase), and cadence controls. Vendor agreements should require compliance with Chapters 301–305 and the TCPA, mandate record retention, provide audit rights, and require prompt notice of complaints.
  • Quiet Hours. Although Chapter 301 applies to voice calls, adopting quiet hours outside of 9 a.m. to 9 p.m. Monday through Saturday and noon to 9 p.m. Sunday (Central Time) for text messaging is a conservative risk‑reduction measure.
  • Section 302.058 Exemptions. If you solicit only former or current customers and have operated under the same name for at least two years, you may be exempt from Chapter 302 registration. Because “customer” is undefined, you should document the factual basis for any exemption. For a comprehensive list of other exemptions, see: Business and Commerce Code Chapter 302.
  • Record‑keeping. Maintain auditable files covering consent capture and revocation, No‑Call subscriptions and 60‑day scrubs, internal do‑not‑contact lists, message content and links, landing‑page disclosures, quiet‑hour controls, registration status and bonds, and complaint logs. Strong records reduce TDTPA exposure and support defenses under state and federal law.

While the settlement meaningfully lowers Chapter 302 risk for true opt-in SMS programs in Texas, the safest course is to maintain rigorous consent practices, No-Call discipline, and strong vendor governance. Until courts or regulators provide formal guidance, treat the settlement as a persuasive safe harbor and operate Texas texting programs with heightened care.

Varnum’s Corporate and Data Privacy and Cybersecurity Practice Teams continue to monitor developments related to SB 140 and Texas telemarketing enforcement. If you have questions about how these changes affect your text messaging, marketing, or compliance programs, please contact a member of the Varnum team to discuss practical next steps.

Michigan Extends NIL Opportunities to High School Student-Athletes

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The Michigan High School Athletic Association (MHSAA) has amended its regulations to permit high school student-athletes to earn compensation from their name, image, and likeness (NIL), referred to under the MHSAA rules as Personal Branding Activity (PBA).

The change marks a significant shift in Michigan interscholastic athletics and aligns the state with a growing national trend, allowing high school athletes to monetize individual endorsement and branding opportunities.

While the new rule expands opportunities for student-athletes and their families, it also imposes strict limitations designed to preserve amateur competition, prevent recruiting inducements, and insulate schools from NIL activity. Schools, families, businesses, and advisors should understand these boundaries before engaging in any PBA arrangement.

What is Personal Branding Activity?

Under the new MHSAA regulation, PBA includes situations in which a student-athlete receives compensation in exchange for promoting or endorsing a product, service, or brand using the student’s NIL.

Permitted activities may include social media endorsements, appearances, camps or clinics, merchandise sales, modeling, or other individual promotional efforts, provided all MHSAA requirements are satisfied.

PBA opportunities must be individualized and may not be tied to athletic performance, team success, or school affiliation.

Key Limitations on High School NIL Activity

Although the rule authorizes compensation, the MHSAA has established clear guardrails to distinguish permissible NIL activity from prohibited pay-for-play or recruiting inducements. Key restrictions include:

No Pay-for-Play or Performance-Based Compensation

Compensation may not be contingent on athletic performance, statistics, awards, team participation, or competition outcomes. Bonuses tied to scoring, championships, awards, or honors remain prohibited, as does compensation simply for being a member of a team.

No Use of School Identifiers or Facilities

Student-athletes may not use school names, logos, mascots, uniforms, facilities, or other school intellectual property in connection with any PBA activity. Sponsored content must be created independently of the school and outside of any school-related setting or event.

No School or Booster Involvement

Schools, coaches, school employees, booster clubs, and other associated entities or individuals are prohibited from arranging, facilitating, negotiating, or promoting PBA opportunities. Improper involvement may jeopardize student eligibility and a school’s MHSAA membership.

Timing and Location Restrictions

PBA activities may not occur during school hours or while the student-athlete is participating in any MHSAA-related activity, including practices, meetings, games, or tournaments. Sponsored content may not be created or posted from the sidelines, locker rooms, or competition venues.

Prohibited Products and Industries

The MHSAA may prohibit PBA arrangements involving products or industries deemed inappropriate for interscholastic athletics. Prohibited categories include alcohol, tobacco, cannabis, gambling, firearms, performance-enhancing substances, and adult entertainment.

Disclosure and Compliance Obligations

Student-athletes must disclose all PBA agreements to the MHSAA within seven business days of finalizing any such agreement. The association will review disclosures for compliance and may require modifications to preserve eligibility.

There is no cap on compensation, provided the arrangement reflects fair market value and complies with MHSAA regulations and applicable law. Student-athletes and their families remain responsible for tax obligations, employment compliance, and evaluating any potential impacts on collegiate eligibility with the NCAA, NAIA, or NJCAA.

Practical Considerations

The new policy presents opportunities and risks:

  • Families should consider engaging experienced legal or financial advisors who are not affiliated with the school.
  • Businesses must avoid structuring deals that could be viewed as performance-based or school-connected.
  • Schools and coaches should maintain strict separation from PBA activity and avoid informal involvement.

Violations may result in student ineligibility and potential sanctions against member schools.

Impact and Outlook

Michigan’s adoption of high school NIL rules reflects the continued expansion of athlete branding rights across all levels of competition. As NIL regulations evolve, compliance expectations are likely to develop alongside them.  

Stakeholders should monitor MHSAA guidance and enforcement trends, particularly as disclosure reviews and interpretations of “associated entities” continue to mature.

For questions regarding NIL compliance, contract review, or policy implementation, contact a member of Varnum’s Name, Image, and Likeness Practice Team.

Equal Employment Opportunity Commission Rescinds Biden-Era Workplace Harassment Guidance

Equal Employment Opportunity Commission Rescinds Biden-Era Workplace Harassment Guidance

On January 22, 2026, the Equal Employment Opportunity Commission (EEOC) voted to rescind its “Enforcement Guidance on Harassment in the Workplace.” While this move has generated attention, it does not significantly change most employers’ legal obligations, including Michigan employers, whose compliance responsibilities remain governed largely by existing federal and state law.

What the EEOC Harassment Guidance Addressed

The rescinded guidance issued on April 29, 2024, was not a binding law. Rather, it outlined how the EEOC interpreted federal anti-harassment law under certain statutes, including Title VII of the Civil Rights Act, the Americans with Disabilities Act, and the Age Discrimination in Employment Act.

Although the guidance addressed a broad range of protected characteristics, such as race, sex, religion, age, and disability, public attention largely centered on provisions related to gender identity, sexual orientation, and reproductive-rights-related issues. Those sections relied heavily on the U.S. Supreme Court’s decision in Bostock v. Clayton County and included examples of harassment, such as repeated misuse of an employee’s name or pronouns, or denial of access to restrooms and locker rooms consistent with an employee’s gender identity.

Why the EEOC Rescinded the Harassment Guidance

The basis for the EEOC’s action appears to address provisions interpreting the scope of legal prohibitions related to gender-identity. Those provisions were enacted by a 2-1 vote, over the dissent of the current EEOC Chairperson, and later vacated by a federal district court.

The EEOC has now rescinded the guidance in its entirety, rather than revising or withdrawing only the provisions related to sexual orientation and gender identity. That approach is notable as the agency could have narrowed its action to specific sections. In the EEOC’s announcement of the rescission, it did not address the rationale for this chosen approach. The announcement noted that federal laws clearly prohibit workplace harassment based on protected class, and affirmed the agency’s continued dedication to preventing and remedying unlawful workplace harassment.

Impact of the EEOC Decision on Employers

From a practical standpoint, the rescission does not significantly change the law. The guidance did not create any new legal obligations, but it did provide insight into how the EEOC evaluated harassment claims and approached its enforcement. Its withdrawal introduces uncertainty regarding future enforcement priorities and whether revised guidance will be issued.

Title VII and State Anti-Discrimination Laws Still Apply

Employers should not view this development as a rollback of substantive obligations. Bostock v. Clayton County remains binding precedent, and Title VII continues to prohibit discrimination based on sexual orientation and gender identity, even though the extent of those protections is still being developed.

In addition, many states, including Michigan, maintain separate laws that expressly prohibit discrimination and harassment based on sexual orientation and gender identity. Those laws remain fully in effect.

Varnum’s Labor and Employment Practice Team will continue to monitor developments and provide updates as the enforcement landscape evolves.

Five 2025 Cases Every Michigan Business Should Know

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Michigan businesses face an ever-evolving legal landscape, fueled in part by courts issuing decisions that can have significant impacts beyond the parties. Varnum’s Appellate Practice Team tracks these decisions for the purposes of providing our clients with up-to-date legal advice.

As part of these efforts, the appellate team has identified five 2025 decisions that every Michigan business should know. These decisions  affect a company’s day-to-day operations, including employment contracts, commercial contracts, tax status, and compliance initiatives:   

1. Rayford v. American House Roseville I, LLC, — N.W. 3d –, 2025 217754 (Mich. 2025)

Court: Michigan Supreme Court

Clients and Sectors Most Impacted: Employers across industries, HR and compliance teams, healthcare systems, senior living, retail, manufacturing, education, and nonprofits.

Summary: In a reversal of longstanding precedent, the Michigan Supreme Court held that adhesive employment agreements, non‑negotiated “take-it-or-leave-it” agreements, that shorten the time for an employee to sue the employer are no longer enforced strictly according to their terms, but rather are subject to judicial review for reasonableness. During this review, courts will consider various circumstances beyond the four corners of the contract, including whether the agreed-upon time period is sufficient to investigate a claim, assess damages, and file a lawsuit. 

Why the Case Is Important: Michigan employers who use standardized employment agreements to shorten the time period during which employees can sue should reassess those provisions to ensure their enforceability, confirming that employees fully understand these periods during the onboarding process and will have sufficient time to investigate and file their claims.

2. In re FirstEnergy Corporation, 154 F.4th 431 (6th Cir. 2025)

Court: U.S. Court of Appeals for the Sixth Circuit

Clients and Sectors Most Impacted: Public companies, audit committees, financial institutions, utilities and energy companies, life sciences and healthcare, technology, and issuers conducting internal investigations amid regulatory or litigation exposure.

Decision and Reasoning: After a trial court ordered a company to produce all documents related to an internal investigation conducted by the company’s outside counsel, the Sixth Circuit reversed, holding that the sought-after documents were protected by attorney-client privilege and the work-product doctrine. In doing so, the court recognized that the company had engaged outside counsel to secure legal advice, regardless of whether that advice also had ancillary business purposes, and squarely placed all documents related to outside counsel’s investigation within the protections of the attorney-client privilege.

Why the Case Is Important: To secure the protections of the attorney-client privilege when conducting an internal investigation, businesses should retain external counsel. The privilege will attach, even if the investigation touches upon businesses. 

3. VCST International B.V. v. BorgWarner Noblesville, LLC, 142 F.4th 393 (6th Cir. 2025)

Court: U.S. Court of Appeals for the Sixth Circuit

Clients and Sectors Most Impacted: Manufacturers and suppliers; automotive and mobility companies; cross-border distributors; technology hardware and capital equipment manufacturers; private equity portfolio companies with multi-jurisdictional supply chains; and businesses using layered purchase order terms across affiliates.

Decision and Reasoning: In this automotive-supply dispute, the buyer issued several purchase orders, addenda, letters, and other communications, each containing competing forum-selection and choice-of-law clauses, making it unclear whether Mexican or Michigan law governed and where disputes arising from the purchase order were to be filed. The Sixth Circuit held that factual disputes precluded the court from deciding these issues, forcing the parties to further litigate them in district court before they could reach the merits of the breach-of-contract claims.

Why the Case Is Important: To avoid having to litigate the enforceability of forum-selection and choice-of-law provisions in terms and conditions and other contractual agreements, businesses should re-evaluate these provisions to ensure that they are consistent among agreements. Moreover, in contractual relationships in which the parties issue back-and-forth agreements, such as buyers and sellers in the automotive supply industry, businesses should carefully review the counterparty’s terms and conditions and seek legal advice to ensure they are consistent with the business’s own terms and expectations.

4. HBKY, LLC v. Elk River Export, LLC, 150 F.4th 480 (6th Cir. 2025)

Court: U.S. Court of Appeals for the Sixth Circuit

Clients and Sectors Most Impacted: Any company that purchases goods.

Decision and Reasoning: During a one-off transaction, a company purchased goods from a seller without realizing that the goods served as security for the seller’s debt. When the creditor later sought to recover the goods, the company argued that, under the Uniform Commercial Code, it was a “buyer in the ordinary course of business” and therefore took title free of the security interest. The Sixth Circuit held that, to avail itself of this defense, the buyer must affirmatively establish that the seller is “in the business of selling goods of that kind” and that the sale occurred in the “ordinary course” of such business. A single transaction, or even a series of isolated transactions, is not sufficient. Because the buyer failed to meet its burden, the creditor prevailed. 

Why the Case Is Important: Purchasers must perform sufficient due diligence on sellers before a transaction, especially for one-off transactions. Failure to document this due diligence sufficiently could result in issues if an undisclosed secured creditor materializes after the transaction. 

5. Blake’s Farm, Inc. v. Armada Township, — N.W.3d –, 2025 WL 1415150 (Mich. Ct. App. 2025)

Court: Michigan Court of Appeals

Clients and Sectors Most Impacted: Michigan agricultural landowners, agritourism operators, and farm markets.

Decision and Reasoning: An agribusiness owns property that contains apple orchards, a market, a restaurant, and a gift shop, as well as facilities for apple canning and cider production. Although the agribusiness attempted to claim Qualified Agricultural Tax Exemptions (QAEs) for the entire property, the Michigan Court of Appeals held that the property’s non-agriculture uses, such as a market, gift shop, and cannery, were commercial purposes, meaning that the agribusiness was entitled to only a partial QAE.

Why the Case Is Important: Agritourism operators and farm markets should anticipate scrutiny of mixed-use improvements and be prepared to substantiate agricultural use portions. 

As these decisions illustrate, appeals can have far-reaching effects, affecting parties beyond those involved in the suit. Varnum’s Appellate Practice Team has extensive experience litigating high‑stakes cases and advising companies on strategic compliance initiatives following important decisions.

DOL Launches Project Firewall to Enforce H-1B Visa Compliance

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The U.S. Department of Labor (DOL) announced “Project Firewall,” an enforcement initiative to ensure employer compliance with the H-1B visa program.

The DOL outlines key employer obligations under the H-1B visa program, including filing a Labor Condition Application (LCA), meeting posting requirements, and maintaining public access files. Varnum assists clients by filing LCAs and providing guidance on posting and public access file requirements in anticipation of enforcement under Project Firewall.

Employers with questions are encouraged to contact Varnum’s Immigration Practice Team.

From Deception to Antitrust: Michigan’s Newest Case Tests The Limits of Competition Law

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Michigan AG Seeks to Recast Climate-Era Conduct as a Sherman Act Conspiracy

Over the past several years, many state attorneys general and cities have sued major oil companies, largely under state consumer protection and unfair or deceptive practices laws. Those cases have typically focused on alleged misstatements about climate change and related risks, emphasizing concerns over advertisements and disclosures, rather than competition law.

Michigan’s Attorney General is taking a different approach. In a lawsuit filed today in the U.S. District Court for the Western District of Michigan, the State of Michigan invokes federal antitrust law to characterize decades of industry conduct, including trade association activity, public messaging, advertisements, investment choices, and intellectual property strategy, as a coordinated effort to hold back competing technologies and infrastructure. The theory represents a significant departure from prior climate-related litigation grounded in consumer protection.

Executive Summary

In People of the State of Michigan v. BP America Inc. et al, Case No. 1:26-cv-00254 (W.D. Mich. Jan 23, 2026), the State of Michigan alleges that four of the largest major oil companies and industry trade groups worked together for decades to slow the adoption of electric vehicles, renewable energy, and charging networks to preserve fossil fuels. The complaint asks the court to treat lobbying, trade association activity, intellectual property enforcement, investment choices, and public messaging as an illegal agreement under the antitrust laws.

The lawsuit attempts a substantial and novel expansion of antitrust law to political advocacy and long-term technology disputes.

What Michigan Alleges

The State defines two Michigan-focused markets: “transportation energy,” which it frames as gasoline versus electricity for fueling vehicles, and “primary energy,” which it defines as fossil-fuel heat versus renewable electricity for residential and public buildings.

According to the complaint, the defendants conspired to slow the development of renewable technologies and charging infrastructure for electric vehicles, pushed investment toward fossil fuel-adjacent projects such as carbon capture and storage, and shaped public and academic debate to delay electrification. The State claims these actions led to higher prices, fewer choices for consumers, and broad societal harms, and it asks the court to find this conduct per se unlawful.

Why the Case Represents a Novel Expansion of Antitrust

  • The theory attempts to frame long-term technology and infrastructure choices, such as electric vehicle batteries, charging networks, and renewable power, as being unlawful restraints of trade, rather than identifying any sort of classic restraints like fixing gasoline prices or reducing energy outputs. Specifically, the State asks the court to treat a mix of conduct by the defendants, lobbying, marketing, academic engagement, intellectual property disputes, and investment decisions, as per se illegal, even though courts usually examine these issues case by case under the “rule of reason.”
  • The complaint relies on trade association participation, similar messaging and investment choices, and shared views of the market to suggest a conspiratorial agreement in restraint of trade. However, those activities are common, often beneficial, and sometimes protected, and the complaint does not describe clear, recent commitments to restrict competing technologies in Michigan.
  • The State highlights broad societal harms from fossil fuels. These issues are typically addressed through legislation, regulation, or tort law, rather than through an antitrust theory.

Vulnerabilities in the Complaint

  • Lack of well-pleaded agreement: The complaint leans on the roles of the American Petroleum Institute and other industry groups, and decades of similar strategies, but provides few specific facts showing an actual agreement among the defendants to limit renewable energy or electric vehicle charging in Michigan within the relevant time period.
  • Mismatch with per se or “quick-look” treatment: The alleged conduct spans multiple markets and includes mixed forms of behavior. Courts are likely to require a full effects analysis, which the complaint supports only in generalized assertions.
  • Market definition and injury concerns: The Michigan-only market definitions are new and contestable. The damages theory depends on a speculative “what-if” world that assumes much earlier electric vehicle adoption, faster charging build-out, and major grid changes.
  • Timeliness issues: Although the State alleges recent overt acts, the core conduct and narrative reach back to the 1970s through the early 2000s, raising statute-of-limitations concerns.
  • Protected activity: Large parts of the case target lobbying, public messaging, and academic engagement, implicating constitutional protections for speech and petitioning and further undermining per se treatment under Section 1.

Likely Trajectory

Defendants are expected to move to dismiss on multiple grounds, including failure to plausibly plead any sort of conspiratorial agreement; inapplicability of per se or “quick-look” treatment; defective market definitions; lack of antitrust injury; timeliness; and constitutional defenses tied to advocacy and speech. Given the complaint’s reliance on broad, decades-long industry patterns and association activity rather than concrete, recent agreements to restrict output of substitutes in Michigan, the case faces a meaningful risk of dismissal.

Implications for Companies and Investors

If accepted, Michigan’s theory could subject advocacy, research priorities, public messaging, intellectual property strategy, and investment decisions to antitrust scrutiny whenever they appear to slow a rival technology. The approach would blur the line between policy debates and competition law and significantly expand antitrust risk for energy, transportation, and industrial companies engaged in decarbonization strategy discussions, an expansion courts have generally resisted.

Practical takeaways

  • Monitor the motion to dismiss for guidance on how courts will view cross-technology disputes and the evidentiary weight given to trade association activity.
  • Review controls around trade association participation, public messaging on technology pathways, and academic engagements to document independent decision-making.
  • Expect copycat filings or political scrutiny, but also expect courts to require plaintiffs to include concrete allegations of recent antitrust misconduct that results in measurable harm to prices or outputs.

Companies and investors should contact Varnum’s antitrust attorneys to evaluate how this case may affect advocacy, investment decisions, and antitrust compliance.