In recent years, a vigorous debate over consumers’ “right to repair” products they have purchased has earned the scrutiny of legislators and regulators, along with the attention of the plaintiffs’ class action bar. Until recently, the class action segment of the controversy has been spread throughout courts across the country. Last month, however, the most prominent set of right-to-repair cases were consolidated in the Northern District of Illinois, which will be a key focus of activity in the space for the foreseeable future.
The right-to-repair movement is somewhat misnamed because consumers have a general “right” to do what they want with their own property, but often lack the practical ability to repair their property because of contractual restrictions (like the automatic voiding of a warranty) or limitations on access to the tools, parts, or know-how needed to perform repairs. The original equipment manufacturer is often the exclusive source of replacement parts, manuals, and other physical and electronic tools that make a repair feasible. That control can have spillover effects into ancillary markets, since a refusal to make such materials available, or limits on distribution, can allow the manufacturer to choose its own service market competitors, if it participates in such markets. Similarly, a manufacturer’s policy to void the product’s warranty if the product is opened up, dampens the incentives to enter the service market, or for a purchaser to employ an independent service firm.
Two manufacturers in particular have been the principal targets of the movement’s ire: Apple and John Deere. Each firm has broad and active constituencies, and each has historically restricted who may repair their products or access the materials necessary to do the job right. In light of the popularity and ubiquity of their products, the debate has not escaped congressional and regulatory attention. President Biden has issued an executive order calling on a newly reconfigured and increasingly activist Federal Trade Commission to develop regulations that prohibit manufacturer policies barring the repair of equipment and devices by individuals and independent repair shops. The Senate and House of Representatives have each introduced right-to-repair bills that would require OEMs to make documentation, parts, software, or tools available to any owner or independent repair facility on fair and reasonable terms. Similar bills have been introduced in a number of state legislatures.
This increase in legislative attention has not slowed class action litigation against manufacturers challenging their repair restrictions and seeking damages. An array of such cases have been filed against John Deere, the market leader in tractor sales in the United States. The gist of these cases is that as tractors have become more sophisticated, consumers’ historical ability to self-repair (or to use a local repair shop) has been dramatically reduced because the diagnostic software and bespoke parts or tools required are not made available to owners or independent service shops. As a result, Deere’s own network of dealers and technicians allegedly dominates the ancillary market for the service of Deere tractors, resulting in higher prices, reduced choice, and lengthy repair delays.
The plaintiffs’ primary legal theory is that Deere’s practices violate both Section 1 and 2 of the Sherman Antitrust Act. Section 1 targets collusive practices that unreasonably restrain trade; in these cases, the relevant agreements are those between Deere and its dealer network that allegedly restrict the distribution of diagnostic software and tools. The main event, however, is under Section 2, which targets monopolistic conduct by single firms. The theory is that Deere has leveraged its (lawfully gained) market power in tractor product markets to obtain an unlawful monopoly in the tractor services market.
The leading U.S. Supreme Court case, and its potential application to modern right-to-repair cases, was the subject of a separate article by the author of this post. But in sum, the court’s 1992 decision in Eastman Kodak Co. v. Image Technical Services Inc. held that Kodak’s refusal to sell original copy machine parts to independent service firms amounted to an unlawful tie of Kodak parts — which Kodak controlled exclusively — to service of the copiers, the market allegedly monopolized. Kodak is an unusual case because the defendant lacked monopoly power in the copier market (which Xerox dominated), did have such power over its own bespoke parts (but so do countless manufacturers with otherwise de minimis market shares) but still violated the Supreme Court’s test for a per se unlawful tie.
Today’s Supreme Court, save for Justice Thomas (who joined Justice Scalia’s vigorous dissent in Kodak), is entirely different from the one that decided Kodak, and it is unclear how the court will treat the similar issues presented in the right-to-repair cases if they come to the court. Going forward, there is a reasonable likelihood that both Congress and the FTC will follow through with legislation and regulation that will govern a manufacturer’s obligations to provide reasonable access to materials required for independent repair. Indeed, some firms — including Deere and Apple — have suggested they are taking steps to increase such access ahead of the pending legal changes.
On the class action front, 13 of the 14 pending class actions against Deere have been consolidated by the U.S. Judicial Panel on Multidistrict Litigation in the Northern District of Illinois, for pretrial activities. Assuming some or all of the cases proceed at least through class certification and summary judgment, this group of cases is likely to have a significant impact on right-to-repair jurisprudence for conduct preceding the (likely) forthcoming passage of a new regulatory regime.
