DTE, Consumers Energy sue Michigan over new campaign finance restrictions

What to know:

• Major Michigan utilities are suing: CMS Energy, Consumers Energy, DTE Energy, DTE Electric and DTE Gas filed a federal lawsuit Nov. 5 challenging Michigan’s new campaign finance law.
• The lawsuit targets Proposal 2: Approved by Michigan voters Nov. 3, the ballot initiative added Section 30a to the Michigan Campaign Finance Act, restricting political contributions by utilities and their affiliates.
• The restrictions cover more than utility companies: The law also applies to certain executives, board members, owners, agents, immediate family members, and affiliated organizations.
• Political contributions are at the center of the dispute: The law prohibits covered utilities and individuals from making direct or indirect contributions to certain candidates, political committees, political parties and affiliated organizations.

Two of Michigan’s largest utility companies, along with their political action committees and two individuals linked to utility executives, have filed a federal lawsuit challenging a voter-approved campaign finance law that prohibits utilities and their affiliates from making certain political contributions.

CMS Energy Corp., Consumers Energy Co., DTE Energy Co., DTE Electric Co. and DTE Gas Co. filed the lawsuit Nov. 5 in the U.S. District Court for the Western District of Michigan, seeking to block enforcement of Section 30a of the Michigan Campaign Finance Act.

The lawsuit also names CMS Energy’s political action committee, Employees for Better Government; DTE Energy’s political action committee; DTE Treasurer Case Lancaster; and Lancaster’s mother as plaintiffs.

The defendants include Michigan Bureau of Elections Director Jonathan Brater, Attorney General Dana Nessel and Secretary of State Jocelyn Benson, all named in their official capacities.

The challenge centers on Proposal 2, a ballot initiative approved by Michigan voters Nov. 3 that amended the state’s campaign finance law.

Among its provisions, the measure added Section 30a, which prohibits electric and gas utilities, their principals and entities affiliated with them from making direct or indirect political contributions to a broad range of candidates, political committees and organizations.

Under the new law, prohibited recipients include candidates for governor, attorney general and state legislative offices; state and local political party committees; certain political committees; members of the Michigan Public Service Commission; and organizations affiliated with covered elected officials and candidates.

The utilities argue the measure violates the First and Fourteenth Amendments by restricting political speech based on the speaker’s identity and limiting individuals’ ability to participate in elections.

“The First Amendment forbids the government from silencing disfavored speakers or viewpoints in this fashion,” the companies’ complaint states.

The lawsuit alleges the ballot initiative was specifically designed to limit the political influence of Michigan’s utilities because of disagreements over energy policy, rates, reliability and corporate profits.

The plaintiffs contend the law allows labor unions, advocacy organizations and other political groups to continue making contributions while imposing restrictions on utilities and people associated with them.

The complaint also argues the measure lacks evidence of the type of corruption that could justify restrictions on campaign contributions.

The companies say the initiative’s supporters relied on broad concerns about “pay-to-play politics,” corporate influence, and special interests but did not identify specific instances of bribery or exchanges of campaign contributions for official government action involving the utilities.

Under U.S. Supreme Court precedent, the lawsuit argues that restrictions on campaign contributions must be closely drawn to address the government’s interest in preventing actual or apparent quid pro quo corruption.

The plaintiffs also contend existing Michigan campaign finance regulations already address potential corruption through contribution limits, disclosure requirements, restrictions on contributions made in another person’s name and other safeguards.

The new law, they argue, goes significantly further by imposing a blanket prohibition rather than narrower contribution limits.

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Law could affect employees, families and political committees

A central part of the lawsuit challenges how Section 30a defines a utility’s principals and affiliated organizations.

The law’s definition of a principal includes members of a utility’s board of directors, majority and substantial owners, senior officers, certain agents and immediate family members of specified utility executives.

The plaintiffs argue the language could extend restrictions beyond utility employees and executives to attorneys, accountants, consultants, contractors, and family members with no involvement in utility business decisions.

The lawsuit specifically argues that DTE Treasurer Case Lancaster’s mother is covered by the law solely because of her relationship with her son, despite having no role in a utility.

Lancaster also contends the law prevents him from making personal political contributions with his own money because of his employment as a utility treasurer.

Both individuals say they want to continue supporting candidates and political causes of their choice.

The companies’ political action committees also argue the law effectively eliminates their ability to contribute to many Michigan candidates.

Employees for Better Government is a separate segregated fund associated with CMS Energy and Consumers Energy.

DTE PAC is a similar organization associated with DTE Energy and its subsidiaries.

According to the complaint, both committees are funded through voluntary contributions from eligible employees and shareholders, not corporate treasury funds.

The plaintiffs say Michigan law has historically permitted such committees to solicit voluntary employee contributions and participate in elections.

Employees for Better Government contributed to state political candidates and committees in 2025, including the Michigan Senate Democratic Fund and House Republican Campaign Committee, according to the lawsuit.

DTE PAC also contributed to organizations representing both major political parties, including the Michigan Senate Democratic Fund and Senate Republican Campaign Committee.

The lawsuit alleges more than 90% of DTE PAC’s contributions go to state candidates and committees, while essentially all of Employees for Better Government’s contributions fall into categories prohibited by Section 30a.

The committees say the restrictions will prevent them from representing their members’ political interests and reduce their ability to solicit contributions.

Companies challenge scope and penalties

The lawsuit raises additional concerns about the law’s definition of affiliated organizations.

Section 30a prohibits utilities and covered individuals from contributing to certain organizations connected to elected officials or candidates.

An organization qualifies as affiliated if an official, staff member, agent, or immediate family member helped establish, finance, maintain, or control it; solicited funds for it within the previous two years; or served in an executive or managerial role.

The law also covers certain organizations that spend more than $500 during an election cycle on contributions, expenditures, or election-related communications referencing a covered official or candidate.

The utilities argue the definitions are too broad and difficult to interpret, potentially making it impossible to determine whether an organization is eligible to receive a contribution.

They also contend the law could impose liability retroactively if a recipient organization later becomes affiliated with a covered official or makes a qualifying election-related communication.

Under Section 30a, a utility that violates the provision could face a civil fine of up to 10 times the amount of the prohibited contribution or donation.

The complaint says the law contains no knowledge requirement, safe harbor, good-faith defense, or opportunity to correct a violation by returning a contribution.

The plaintiffs argue those provisions create uncertainty and could discourage otherwise lawful political activity.

They also maintain that Michigan’s restrictions are unusually broad compared with other states.

The complaint identifies Alabama, Georgia and Mississippi as states with certain utility-specific contribution restrictions, but says those provisions are limited to elections involving utility regulatory commissions.

The lawsuit notes that Michigan’s Public Service Commission members are appointed rather than elected.

Four constitutional claims

The complaint outlines four primary legal challenges.

First, the plaintiffs argue Section 30a discriminates against specific speakers and viewpoints by restricting utilities and people associated with them while leaving other political participants free to contribute.

Second, they argue the law is not closely tailored to preventing corruption and imposes a broader restriction than necessary.

Third, the lawsuit alleges the law is unconstitutionally vague because terms such as “affiliated,” “indirectly financed,” “agent,” and “immediate family” are not sufficiently defined.

Finally, the plaintiffs claim the law violates the Equal Protection Clause by treating utilities and their affiliates differently from other regulated industries, corporations, labor organizations and advocacy groups.

The companies are seeking a declaration that Section 30a is unconstitutional, both facially and as applied to the plaintiffs.

They also are asking the court to issue a preliminary and permanent injunction preventing state officials from investigating or enforcing the provision against them or collecting fines for alleged violations.

The lawsuit was filed by attorneys with Grand Rapids-based Miller Johnson.

Law’s implementation is approaching

Under the Michigan Constitution, an initiated law approved by voters takes effect 10 days after the official declaration of the election results.

The plaintiffs estimate the official declaration will occur Nov. 23, which would make Section 30a effective around Dec. 3.

The companies argue they face immediate harm because they will have to suspend political contributions or risk substantial financial penalties once the law takes effect.

They contend the loss of First Amendment rights, even temporarily, constitutes irreparable harm and warrants court intervention before enforcement begins.

The lawsuit does not establish that the challenged law is unconstitutional.

The federal court will decide those questions as the case proceeds.

The plaintiffs are asking the court to preserve their ability to make political contributions while the constitutional challenge is litigated.