Permissive Treble Damages Under Michigan Consumer Statutes and Due Process Constraints

Introduction

This opinion commentary examines the Sixth Circuit’s decision in Tina McPherson v. Suburban Ann Arbor, LLC, decided April 21, 2025. The case arises from a common “yo-yo financing” or “spot delivery” practice by an automobile dealer, Suburban Ann Arbor, LLC, which misrepresented financing approval to the buyer, Tina McPherson. After McPherson made a $2,000 down payment and paid fees, the dealer repossessed her vehicle when the purported financing “fell through,” kept her down payment, and offered her worse terms or no car at all. McPherson sued under federal and Michigan consumer-protection laws, prevailed before a jury, and obtained substantial actual, conversion, and punitive damages. The district court awarded her attorney’s fees and costs, denied treble damages under two Michigan statutes, and the Sixth Circuit affirmed without finding any abuse of discretion.

Summary of the Judgment

The Sixth Circuit’s panel affirmed the district court in all respects. Key holdings include:

Under Michigan’s Regulation of Collection Practices Act (Mich. Comp. Laws § 445.257(2)) and the Michigan conversion statute (Mich. Comp. Laws § 600.2919a(1)), treble damages are permissive (“may” recover), not mandatory.
Because these treble-damage provisions depend on actual damages, they are not “statutory damages” subject to the more lenient constitutional standard applied in St. Louis, I.M. & S. Ry. Co. v. Williams. Instead, the Supreme Court’s due process constraints on punitive-damage ratios (see BMW v. Gore, State Farm v. Campbell) apply to any constitutional challenge.
The district court did not abuse its broad discretion in declining to treble damages where a $350,000 punitive award already vindicated the interests of punishment and deterrence without raising due process concerns.
McPherson forfeited her argument that treble damages are mandatory by failing to raise it in her opening appellate brief.
The award of $418,995 in attorney’s fees (versus the $555,039.50 requested) was reasonable under the lodestar method, reflected prevailing market rates, and appropriately accounted for clerical tasks and fee reductions.

Analysis

Precedents Cited

Manuel v. Gill, 753 N.W.2d 48 (Mich. 2008) and Aroma Wines & Equip., Inc. v. Columbian Distrib. Servs., 844 N.W.2d 727 (Mich. Ct. App. 2013) – established that permissive treble statutes (“may recover”) grant trial courts discretion.
Cultrona v. Nationwide Life Ins., 748 F.3d 698, 706 (6th Cir. 2014) – affirmed abuse-of-discretion review of treble awards under consumer statutes.
Jackson v. Bulk AG Innovations, 993 N.W.2d 11 (Mich. Ct. App. 2022) – confirmed same standard in Michigan courts.
Alken-Ziegler, Inc. v. Hague, 767 N.W.2d 668 (Mich. Ct. App. 2009) and Peisner v. Detroit Free Press, 364 N.W.2d 600 (Mich. 1984) – explained that treble damages punish and deter.
BMW v. Gore, 517 U.S. 559 (1996) and State Farm v. Campbell, 538 U.S. 408 (2003) – set due process limits on punitive-to-actual-damage ratios.
St. Louis, I.M. & S. Ry. Co. v. Williams, 251 U.S. 63 (1919) – defined “statutory damages” subject to a separate constitutional test.
Douglas v. Cunningham, 294 U.S. 207 (1935) and Smith v. Thomas, 911 F.3d 378 (6th Cir. 2018) – distinguished statutory damages (fixed alternatives) from damages predicated on actual loss.
Hensley v. Eckerhart, 461 U.S. 424 (1983); Perdue v. Kenny A., 559 U.S. 542 (2010); Fox v. Vice, 563 U.S. 826 (2011) – articulated the lodestar method and the district court’s discretion in fee awards.

Legal Reasoning

1. Discretionary Treble Damages. Michigan’s treble-damage provisions use permissive language (“may assess … may recover”), signaling legislative intent to vest trial courts with discretion, not mandate multiple awards. The Sixth Circuit applied established Michigan decisions and Sixth Circuit precedent, reviewing only for abuse of discretion.

2. Constitutional Standard. McPherson argued that these treble awards were akin to statutory damages subject to the “wholly disproportioned” test of Williams. The court rejected that view, noting statutory damages typically provide fixed sums when actual damages are hard to quantify. Michigan’s treble clauses are contingent on actual losses; they are not an “alternative” mechanism. Thus, due process review aligns with punitive-damage precedents.

3. Due Process Application. The district court determined that a 9.2:1 ratio of punitive to actual damages (without trebling) approached the outer constitutional limit. Trebling would have pushed the ratio beyond single-digit guidelines. Declining treble damages thus served to avoid possible due process violation rather than deny McPherson relief.

4. Forfeiture of Mandatory-Damages Argument. McPherson’s failure to assert in her opening brief that treble damages were mandatory under Michigan law led to forfeiture of that claim on appeal.

5. Attorney’s Fees. Applying the lodestar formula, the district court (a) surveyed prevailing Michigan rates, (b) multiplied hours reasonably expended by those rates, and (c) trimmed the total to reflect voluntary reductions and to guard against clerical overbilling. That reasoned exercise of discretion passed muster under Hensley and Fox.

Impact

This decision clarifies several points of interest to practitioners in Michigan and the Sixth Circuit:

Trial courts have broad discretion to deny treble damages under § 445.257 and § 600.2919a, even when willfulness and conversion are proven, so long as denial does not constitute an abuse of discretion.
Treble awards contingent on measurable actual damages are subject to punitive-damage due process constraints, not the less stringent “statutory damages” test.
Appellate forfeiture rules remain stringent: an argument omitted from the opening brief is ordinarily lost.
The lodestar remains the presumptive method for fee awards, and district courts are entitled to “rough justice” reductions without line-by-line auditing of every entry.

Complex Concepts Simplified

Permissive vs. Mandatory Damages: “May” recover treble damages means a judge decides whether additional punishment is justified; “shall” would force treble damages in every case.
Statutory vs. Actual-Loss-Based Damages: Statutory damages are fixed sums set by law when harm is hard to measure. In contrast, treble damages multiply the plaintiff’s actual losses by three.
Due Process Ratios: The Supreme Court recommends single-digit ratios of punitive to actual damages to avoid constitutional issues. Exceeding a 9:1 ratio risks reversal.
Lodestar Method: A fee award equals reasonable hours × reasonable rate. District courts may adjust downward for overbilling or clerical tasks but need not itemize every small entry.
Forfeiture: Arguments not presented in the initial brief are normally deemed waived on appeal.

Conclusion

Tina McPherson v. Suburban Ann Arbor, LLC establishes that Michigan’s consumer-protection statutes give trial courts valuable discretion over treble damages and that any constitutional scrutiny of those damages follows punitive-damage precedents, not the alternative statutory-damages standard. The decision underscores the importance of clear briefing, careful fee-application analysis, and mindful application of due process principles when multiple layers of damages are available. This ruling will guide both plaintiffs seeking maximum statutory relief and defendants aiming to limit extraordinary damage awards in future consumer-protection and conversion litigation.