Multiclaim Attorney General Actions Must Follow Tort Venue Rules; “Original Injury” Lies Where the Plaintiff First Suffers Deprivation

Case: Department of Health and Human Services v NRK RX, Inc (Mich Sup Ct, June 8, 2026)
Core holding: When a complaint pleads multiple causes of action and at least one sounds in tort, MCL 600.1641(2) mandates venue be determined under MCL 600.1629, displacing permissive Attorney General venue provisions; and the “original injury” is where the plaintiff first suffered actual injury (here, DHHS’s deprivation occurred in Ingham County).

I. Introduction

The Michigan Department of Health and Human Services (DHHS), represented by the Attorney General, sued NRK RX, Inc. and Raad Kouza to recover alleged Medicaid overpayments identified through an audit and reduced to a final administrative overpayment amount of $541,590.71. DHHS filed a five-count civil action in Ingham County seeking enforcement of its final order and asserting common-law conversion, statutory conversion, breach of contract, and unjust enrichment.

The litigation quickly became a venue dispute. Defendants argued that because the complaint included tort counts, venue had to be decided under the tort venue statutes—MCL 600.1641(2) and MCL 600.1629—rather than the Attorney General venue statutes—MCL 14.102 and MCL 600.1631(a). The trial court transferred the case to Oakland County; the Court of Appeals affirmed. The Michigan Supreme Court agreed that the tort venue framework controlled, but held that the “original injury” occurred in Ingham County, requiring transfer back.

II. Summary of the Opinion

III. Analysis

A. Precedents Cited

1. Venue as statutory and reviewed for error

• Gross v Gen Motors Corp — Used to distinguish venue from jurisdiction and to describe venue’s purpose as selecting a fair and convenient forum. The Court also referenced Gross as part of the historical arc: pre-1995 venue law allowed suit not only at the injury site but also where breaches occurred; the Legislature later narrowed this framework.
• Dimmitt & Owens Fin, Inc v Deloitte & Touche (ISC), LLC — The principal interpretive authority for “original injury” under MCL 600.1629. The Court relied on Dimmitt to insist on a plaintiff-injury focus: identify the “first actual injury” resulting from the defendant’s act/omission.
• Massey v Mandell — Cited for clear-error principles and (separately) for the interpretive significance of “a” versus “the,” supporting the majority’s reading that “a proper county” is permissive rather than exclusive.

2. Statutory interpretation: text, “shall/may,” surplusage, and harmonization

• People v Posey and Browder v Int'l Fidelity Ins Co — Cited for the established rule that “shall” is a mandatory directive. This underwrote the majority’s conclusion that MCL 600.1641(2) overrides otherwise permissive venue options.
• People v Arnold, Browder v Int'l Fidelity Ins Co, and Smith v Sch Dist No 6 — Used to reinforce that “may” is ordinarily permissive, supporting the characterization of MCL 14.102 as discretionary.
• Paige v Sterling Hts — Invoked for the distinction between “a” and “the,” reinforcing that MCL 600.1631(a) (“a proper county”) is nonexclusive.
• State Farm Fire & Cas Co v Old Republic Ins Co and South Dearborn Environmental Improvement Ass'n v Dep't of Environmental Quality — Cited for the anti-surplusage principle. The majority used these cases to reject DHHS’s argument that MCL 600.1641(2) is merely an “arrow” to MCL 600.1629 without mandatory force; such a reading would make subsection (2) functionally pointless.
• SBC Health Midwest, Inc v Kentwood — Cited to emphasize courts may not read into unambiguous text what is not there, a key response to requests to create exceptions for the Attorney General.
• Farrington v Total Petroleum, Inc and Arends v Grand Rapids R Co — Used to reinforce that courts cannot add statutory exceptions; if an exception exists, it must appear in the act.
• Milne v Robinson — The majority addressed (and limited) the general/specific canon, explaining that where both statutes are “narrow and broad” in different ways, the canon does not reliably resolve legislative intent.

3. Substantive tort backdrop: conversion

• Aroma Wines & Equip, Inc v Columbian Distribution Servs, Inc — The Court used this decision to define common-law conversion and to explain that conversion includes refusal to return property upon demand. This framed the injury as deprivation of possession/control.
• Garras v Bekiares — Mentioned for the general rule that money is not typically convertible absent an obligation to keep/deliver specific monies; here, the Court relied on MCL 400.111b(16) to treat failure to repay Medicaid overpayments as conversion.

4. Procedural and case-specific authorities

• Food Town Drugs v Dep't of Health & Human Servs (unpublished) — Provided the procedural history showing defendants’ prior administrative/judicial challenges were unsuccessful.
• Ground Dev, Inc v Doyle & Lang, LLC (unpublished) — Relied on by the Court of Appeals (and discussed by the Supreme Court) for the idea that conversion-related venue might track refusal to return property; the majority effectively narrowed its relevance by insisting that the statutory test is plaintiff’s first actual injury location.

B. Legal Reasoning

1. The new venue rule for multiclaim cases with tort counts—applies even when the Attorney General sues

The Court’s first and most consequential move was to treat the venue problem as a hierarchy-of-statutes question. It acknowledged that the Attorney General venue statutes (MCL 14.102 and MCL 600.1631(a)) authorize filing in Ingham County, but emphasized their language is permissive: the Attorney General “may” begin actions in Ingham, and Ingham is “a proper county,” not the exclusive county.

Against this permissive backdrop, MCL 600.1641(2) supplies a mandatory command: when multiple causes are pleaded and one is a tort, “venue shall be determined” under MCL 600.1629. The Court treated “shall” as dispositive and refused to read in any unexpressed exception for Attorney General litigation. The opinion’s central structural conclusion is that, where applicable, MCL 600.1641(2) converts MCL 600.1629 from an otherwise permissive menu of “a county” options into the required framework for venue selection.

2. “Original injury” under MCL 600.1629 is plaintiff-centric (first actual injury), not defendant-centric (place of wrongdoing)

The Court then applied MCL 600.1629, focusing on the statutory phrase “the county in which the original injury occurred.” Relying on the 1995 amendments described in Dimmitt & Owens Fin, Inc v Deloitte & Touche (ISC), LLC, the Court emphasized that Michigan intentionally narrowed tort venue: it is not enough that some element of wrongdoing occurred in a county; rather, courts must identify the plaintiff’s first actual injury.

For DHHS’s conversion theory, the Court identified the injury as the deprivation of possession and control of the (intangible) electronic funds. That deprivation, in the Court’s view, was suffered where DHHS administers Medicaid and experienced the loss of control—its Ingham County headquarters—not where defendants allegedly decided to keep the money (Oakland County). Thus, even though defendants’ alleged act/omission occurred at their office, the “original injury” for venue purposes occurred at the plaintiff’s location of first actual deprivation.

3. The Court’s response to interpretive counterarguments (Welch’s approach and DHHS’s “arrow” theory)

The majority’s interpretive posture was notably textualist and anti-exception: it treated the absence of carve-outs in MCL 600.1641(2) as decisive and viewed the surplusage canon as foreclosing DHHS’s attempt to reduce subsection (2) to a non-operative cross-reference. Justice WELCH’s dissenting analysis in Part III(A) pressed a harmonization theory (preserving Attorney General choice of Ingham), but the majority rejected harmonization where it would negate the mandatory force of “shall” and functionally create an exception the Legislature did not enact.

C. Impact

1. Venue strategy in state enforcement litigation

The decision supplies a clear litigation-planning rule: when the Attorney General (or a state agency represented by the Attorney General) files a multicount complaint that includes a tort claim, venue is not chosen under the Attorney General venue provisions; it must be determined under the tort venue hierarchy of MCL 600.1629 by operation of MCL 600.1641(2).

Practically, this can affect how state enforcement actions are pleaded. Plaintiffs who want Ingham County will need to evaluate whether (a) tort counts are necessary, (b) venue will still land in Ingham under the “original injury” test, or (c) an alternative pleading structure changes the venue regime (the Court acknowledged the “curious” possibility that a single-count tort suit might not trigger MCL 600.1641(2)).

2. “Original injury” in intangible-property cases (e.g., electronic funds)

The opinion materially clarifies that in conversion/financial deprivation scenarios—especially involving electronic funds—Michigan’s “original injury” inquiry may center on where the plaintiff first experiences loss of possession/control, not where the defendant sat when refusing to return funds. This plaintiff-location framing is likely to be invoked in cases involving remote conduct, digital banking, and statewide entities whose operational injury is felt at headquarters.

3. Anticipated future disputes

• Electronic funds “location” controversies: Justice THOMAS noted the “location” of electronic funds is a legal construct; future cases may test whether “original injury” can be anchored to the plaintiff’s place of deprivation even where funds are held by third-party banks or distributed across systems.
• Government plaintiffs beyond DHHS: Because the majority emphasized that MCL 600.1641(2) contains no litigant-specific exceptions, the rule is positioned to apply to other state agencies and Attorney General actions whenever multiclaim pleadings include tort counts.
• Reconciling venue statutes: Justice WELCH’s harmonization approach may continue to be argued, but the majority’s reasoning suggests courts will treat “shall” commands in venue statutes as overriding permissive alternatives absent explicit exceptions.

IV. Complex Concepts Simplified

• Venue vs. jurisdiction: Jurisdiction is the court’s power to hear a type of case; venue is the statutorily chosen county where the case should be tried.
• Permissive vs. mandatory statutes (“may” vs. “shall”): “May” usually grants discretion; “shall” usually imposes a requirement. Here, “shall” in MCL 600.1641(2) compelled using the tort venue framework.
• “A proper county” vs. “the proper county”: “A” signals nonexclusive options; “the” signals exclusivity. The Attorney General statutes make Ingham an available option, not the only one—unless another statute mandates otherwise.
• “Original injury occurred”: After the 1995 amendments, Michigan tort venue focuses on where the plaintiff first suffered real, actual harm, not merely where the defendant acted.
• Conversion: Conversion is wrongful control over another’s property (including refusing to return it). Statutory conversion can permit treble damages in defined circumstances.
• Rule against surplusage: Courts avoid interpretations that make statutory language meaningless. The majority used this to ensure MCL 600.1641(2) does real work.

V. Conclusion

Department of Health and Human Services v NRK RX, Inc establishes two interlocking venue principles. First, when a complaint pleads multiple claims and at least one sounds in tort, MCL 600.1641(2) requires venue to be determined under MCL 600.1629, even in Attorney General-filed actions otherwise eligible for Ingham County under permissive Attorney General venue statutes. Second, the “original injury” for MCL 600.1629 is where the plaintiff first suffers actual injury—here, DHHS’s deprivation of control over electronic funds in Ingham County—rather than the county where defendants’ allegedly wrongful retention occurred.