By Jerri-Lynn Scofield, who has worked as a securities lawyer and a derivatives trader. She is currently writing a book about textile artisans.
Three U.S. Senators – Ron Wyden, Cynthia Lummis, and Ben Ray Luján – introduced legislation last week to ensure the right to repair.
The Fair Repair Act of 2022 would require manufacturers of digital electronic equipment to make tools, parts, and documentation available to owners and independent repair providers. This is the first right to repair measure introduced into the Senate that would apply broadly to several industries, including consumer electronics, farm equipment, medical equipment, and motor vehicles.
Previously, narrower initiatives have been considered, limited to single industries. In 2020, Wyden introduced a measure that would have established a right to repair for medical equipment only. Similarly, earlier this year, Senator Jon Tester introduced legislation to cover farm equipment.
Biden issued a right to repair executive order last year and reaffirmed his support in January. The Federal Trade Commission (FTC) has also undertaken separate initiatives to advance the concept (see Biden Taps Lina Khan to Chair the FTC, FTC Votes 5-0 to Crack Down on Companies For Thwarting Right to Repair, and FTC, Where Art Thou?: Appliance Manufacturers Routinely Invalidate Warranties if Customers Use Third-Party Repair Services).
Despite this activity, it’s not altogether clear to me whether the Biden team will make passing legislation a priority at this time – especially as a powerful array of corporations opposes the right to repair, including Apple and John Deere (see, e.g., my recent post, Failing the Fix: Grading Apple, Dell, Google, Microsoft on the Ease of Repair of Their Products). Their business models rely on thwarting the ability of consumers or third-party repair shops to fix things when they break.
A broad coalition of disparate interests groups supports the Fair Repair Act of 2022, including the National Farmers Union, the Rocky Mountain Farmers Union, the New Mexico Chile Association, the Electronic Frontier Foundation, Public Knowledge, the Repair Association, Consumer Reports, The Public Interest Research Group, and iFixit, according to the Sierra Sun Times.
The U.S. Public Interest Research Group’s (US PIRG) senior right to repair campaign director Nathan Proctor sounded an upbeat note and noted, “our rag-tag band of repair shops, tinkerers, farmers, makers, DIYers, environmentalists and consumer advocates are taking on some of the most powerful companies in the world — and we continue to make progress. The time has come to just let people fix their stuff.”
One factor that might factor in heavily in calculations as to whether to support right to repair measures now is the impact of the computer chips shortage – exacerbated by the crisis in Ukraine. and likely to be a problem for industries dependent on such chips. As the Sierra Sun Times observed, “This bipartisan effort to increase access to repair for consumer goods would greatly reduce waste, reliance on foreign-manufactured chips, and empower small-businesses and farmers to repair their own equipment [Jerri-Lynn here: emphasis added]..
Litigation Will Proceed Regardless of Progress on Pending State and Federal Legislation
Litigation hasn’t waited on the enactment of any state or federal right to repair legislationmay result in prod enactment of a right to repair, as attorneys from the law firm Troutman Pepper recognized Friday in Right-to-Repair Movement Without Right-to-Repair Laws:
The “right-to-repair” movement continues to gain momentum, and as predicted, litigation has started even in the absence of enacted right-to-repair laws. In a recently filed class-action complaint in the U.S. District Court for the Northern District of Illinois, the plaintiff alleges that the equipment manufacturer deliberately prevents farmers from repairing their own equipment or using independent repair shops, which the plaintiff argues are antitrust violations under Sections 1 and 2 of the Sherman Act, 15 U.S.C. §§ 1, 2. See Eagle Lake Farms Partnership v. Deere & Co., No. 3:22-cv-50078 (N.D. Ill.).
Noting that as of end 2021, more than half of all U.S. states had pending right to repair legislation and that the Biden administration supports right to repair rules, they observed:
Even in the absence of such laws though, we anticipated that litigants and regulators would use existing antitrust laws and consumer protection laws to increase scrutiny of practices that restrict consumers’ right to repair. [Jerri-Lynn here: emphasis added].
The recently filed Eagle Lake Farms lawsuit is one such example. In that case, the complaint alleges that farmers traditionally had the ability to repair and maintain their own tractors, or at least had the option to bring their tractors to an independent mechanic for repairs. However, the complaint alleges that John Deere deliberately monopolizes the repair and maintenance market by making crucial software and repair tools inaccessible to farmers and independent repair shops. The complaint further alleges that John Deere also prevents its network of highly consolidated dealerships (Dealerships) from providing farmers and repair shops with access to the same software and tools used by the Dealerships, which provides John Deere and the Dealerships with “supracompetitive profits from the sale of repair and maintenance services.” The complaint brings eight counts under the Sherman Act for antitrust violations, as well as counts for promissory estoppel and unjust enrichment. The complaint’s proposed nationwide class includes “[a]ll persons and entities residing in the United States who, during the Class Period of January 10, 2018 to the present, purchased Deere Repair Services for Deere Tractors from Defendant or Deere’s authorized Dealers and/or technicians.”
The Troutman Pepper attorneys are optimistic that some state and/ or federal right to repair measures will be enacted this year.I’m not so sure this battle will be won quite so soon. Nonetheless, they:
…anticipate an increase in investigations, enforcement proceedings, and lawsuits from private litigants and regulators using existing antitrust laws in the absence of right-to-repair legislation. The Eagle Lake Farms lawsuit provides but one example of such a strategy. As courts interpret the scope of antitrust enforcement in the context of the right-to-repair movement, we anticipate that regulators will proceed with their own enforcement actions to shape the right-to-repair jurisprudence.
In other words, there’s more than one mechanism by which to achieve right to repair goals. Legislation isn’t necessarily the be-all and end-all. Whether or not the Biden administration gets behind the Wyden et al bill, other regulators, both federal (e.g, the FTC) and state, will proceed independently with their own enforcement initiatives.