Michigan utilities sue to block voter-approved ban on political giving

Four days after Michigan voters approved the most restrictive state ban yet on political giving by regulated utilities, the state's two largest power companies have gone to federal court to stop it from taking effect. DTE Energy and Consumers Energy filed a joint federal lawsuit on Nov. 5 arguing that the measure, known as Proposal 2, violates their First and Fourteenth Amendment rights, making Michigan the newest battleground in a national fight over whether voters can bar specific industries from the political process.

The utilities' suit is the second legal challenge to Proposal 2 in less than 48 hours. The Mackinac Center for Public Policy, a free-market think tank, and the Institute for Free Speech sued a day earlier, on Nov. 3, over a separate provision of the same measure requiring disclosure from people who speak publicly about elected officials. Together, the filings mean one of the most sweeping campaign-finance proposals on any 2026 ballot is headed to court before the ballots that created it have even been certified.

An 81 percent mandate

Proposal 2 amends the Michigan Campaign Finance Act, the 1976 law that already limits how candidates and committees can raise and spend money in state races. The new language bars large regulated utilities, health insurers and government contractors from giving money to the governor, the attorney general, state lawmakers or candidates for those offices. It extends the ban to corporate executives, employees and their immediate family members, and it adds new public-disclosure requirements for groups and individuals who spend money discussing officeholders.

The measure passed by a lopsided margin. With roughly 88 percent of precincts reporting unofficial results, voters backed Proposal 2 by about 81 percent to 19 percent, a margin of more than 2.6 million votes. It was one of the largest landslides on a ballot that also flipped the governor's office and both chambers of the Legislature to Democrats, giving the party full control of state government for the first time in more than a decade.

• Backers: Michiganders for Money Out of Politics, also known as Mop Up Michigan
• Passed Nov. 3 with roughly 81 percent support, unofficial results
• Covers utilities, health insurers and government contractors, plus their executives and immediate family
• Two federal lawsuits filed within 48 hours of passage

Two suits, two targets

The lawsuits attack different pieces of the same law. Mackinac Center's challenge, filed in the Western District of Michigan, focuses on the measure's reporting requirements, arguing they sweep in journalists, nonprofits and ordinary citizens who publicly discuss elected officials' conduct. Brett Nolan, a senior attorney at the Institute for Free Speech who is representing the plaintiffs, told reporters the disclosure rules amount to an "expansive threat" to the ability of ordinary people to criticize those in power.

DTE and Consumers Energy are going after the contribution ban itself. Their complaint argues the restriction is not narrowly tailored to prevent quid pro quo corruption or its appearance, the standard the U.S. Supreme Court has set for campaign-finance limits, and that the ballot campaign offered only general assertions of corruption rather than evidence specific to the two companies. Both suits name Attorney General Dana Nessel and the office of the Michigan Secretary of State, which runs the Bureau of Elections and will be responsible for enforcing the new rules, as defendants. Secretary of State Jocelyn Benson, who is also the state's Democratic governor-elect, is named in her outgoing capacity.

"When they're allowed to give to elected officials, pay-to-play politics is the outcome," said Christy McGillivray, co-chair of Michiganders for Money Out of Politics.

Consumers Energy spokesperson Katie Carey said the law singles out Michigan employers while leaving national political spending by outside groups and wealthy individual donors untouched. "People shouldn't lose their First Amendment rights because of where they work," she said, a position the companies' complaint repeats in arguing the measure is both over- and under-inclusive as a corruption remedy.

Who stands to be affected

The outcome matters well beyond Lansing. DTE and Consumers Energy are regulated by the state, meaning the officials the law would bar them from supporting are the same officials who set the rates the companies can charge millions of Michigan ratepayers. Supporters of Proposal 2 argue that overlap is precisely the point: McGillivray has said the measure targets the kind of "pay-to-play" dynamic in which regulated industries fund the campaigns of the people who regulate them.

The ruling, whenever it comes, will also shape how other states approach similar measures. Proposal 2 was among the most far-reaching utility-specific contribution bans to reach voters this cycle, and campaign-finance advocates in several states have said they are watching the Michigan litigation as a test case. A decision striking down the ban on First Amendment grounds would hand opponents of similar measures elsewhere a ready-made template; a ruling upholding it would do the same for supporters.

Inside Michigan, the law's fate is now almost entirely in the courts' hands rather than the Legislature's. Democrats will control the governor's office and both legislative chambers starting in January, making it unlikely that opponents could assemble the votes to repeal or narrow the measure through ordinary lawmaking. That leaves litigation as the only realistic path for DTE, Consumers Energy and the Mackinac Center to block enforcement before the new restrictions take hold.

What happens next

Neither lawsuit has yet produced a hearing date, and both seek preliminary injunctions that would halt enforcement of the challenged provisions while the cases proceed, in addition to permanent rulings that the law is unconstitutional. The Attorney General's office, which will defend the state in both cases, had not filed a response as of Friday.

Campaign officials for Michiganders for Money Out of Politics said they anticipated legal challenges well before Election Day and are prepared to defend the measure in court. "We're confident Proposal 2 will withstand legal scrutiny," said Maura Cowley, the campaign's manager, adding that the group built its ballot language around existing precedent for industry-specific contribution limits. DTE and Consumers Energy, for their part, say they intend to keep contesting the law for as long as it threatens to take effect, setting up a fight likely to stretch well into the new Legislature's first year.

For now, the law remains on the books, approved overwhelmingly by voters but contested by two of the state's most influential corporate players and a prominent conservative legal advocacy group. How federal judges in Michigan weigh that tension between a landslide ballot result and long-standing First Amendment doctrine on political speech will determine whether Proposal 2 becomes a national model or a cautionary tale.