United States: Crafting A Measured Response To The Right-To-Repair Movement

Over the last decade, State legislatures across the country have considered and adopted laws that will transform and hinder the entire manufacturing industry. Congress is not far behind. These right-to-repair laws are gaining traction and present an area of increasing concern.

On the surface, this new movement argues that it should be easier and cheaper for consumers to fix their products. To do so, advocates are urging lawmakers to require manufacturers to share repair information, provide diagnostic tools, and supply service parts. At its core, however, the right-to-repair movement wants much more. They are seeking access to sophisticated coding and diagnostic information needed for the aftermarket repair or modification of almost all consumer and commercial goods, including cell phones, computers, cars, medical devices, and industrial and agricultural equipment, among countless others.

This legislation presents potential challenges and risks across the manufacturing industry. Butler Snow has a long history of defending product liability claims on regional and national bases. The firm's clients include manufacturers, distributors, and service providers from a broad range of industries, including aviation, automotive and truck, firearms, agricultural chemicals, and industrial chemicals.

That said, the right-to-repair movement is here and is gaining popularity by the day. It is thus critical for companies to consult attorneys experienced in defending large, complex suits. It is equally vital for litigators to anticipate the effects of these legislative endeavors now while there is still a chance to shape them.

This post explores the right-to-repair movement, offering insights from Butler Snow attorneys Fred E. (Trey) Bourn III and Thomas DiStanislao, who recently presented on the topic. Their insights cover potential risks for manufacturers and legal considerations as this movement continues to take root and outline affirmative steps to help litigators navigate this new complex terrain. To better orient their takeaways, this post begins with an overview of the current (albeit ever-changing) state of right-to-repair legislation.

A Look Into The Legal Bases & Regulatory Landscape for the Right to Repair

As of today, the movement counts among its supporters the President of the United States, the Federal Trade Commission (FTC), members of Congress, and members from at least 45 State legislatures that have introduced bills to enact a statutory right to repair. Industry leaders and their lobbying arms have struggled to navigate this growing trend. The window is quickly closing for manufacturers to present a uniform response to the movement.

In looking to the future, we must first consider the past. Of course, regulations have long governed manufacturers. Among these, the Magnuson-Moss Warranty Act's anti-tying provision, 15 USC § 2302, the Sherman Act's antitrust protections, 15 USC §§ 1 and 2, and the FTC Act, 15 USC § 45, all bear on the ability of foremarket manufacturers to exert some level of control over aftermarket repairs.

The Judiciary, too, has weighed in on this issue. In Eastman Kodak Co. v. Image Tech. Servs., Inc., 504 US 451 (1992), for example, the Supreme Court directly addressed the intersection of aftermarket repair issues and antitrust principles. In short, the Supreme Court held it was at least conceivable that original equipment manufacturers could be aftermarket monopolists for their own products even with sufficient foremarket competition. Though the Court did not discuss when or under what conditions such a situation would arise, the movement's advocates continue to cite Eastman Kodak today as one of the leading cases to support their cause.

The Executive Branch took a long time to engage with the purported right-to-repair. But it has quickly made its presence known. In May 2021, the FTC released a report, "Nixing the Fix: An FTC Report to Congress on Repair Restrictions," written in response to Congress's directive for research on "anti-competitive practices related to repair markets." At bottom, the FTC determined the Magnuson-Moss Warranty Act had not kept pace with the evolving consumer goods repair market and that the Sherman and FTC Acts were being underutilized in policing the aftermarket. Ultimately, the FTC concluded that expanding consumers' repair options was in the country's best interest and called on Congress to pass legislation to that effect. Weeks later, President Biden issued an Executive Order adopting the report's recommendations as his administration's policy.

Since then, members of Congress have introduced several bills to do just that. Though these have failed to emerge from their respective chambers, the right-to-repair movement continues to gain traction. That is especially true in the States, which are considering and adopting industry-specific bills at a staggering pace.

Is Right to Repair Pro Business? Or Is It Just Another Way to Label Companies as the "Bad Guys"?

So, what does this tidal wave of change mean for the manufacturing industry? Again, advocates are couching their arguments under the guise of "protecting consumers" and touting the potential environmental benefits. They also suggest they want to increase competition in the aftermarket to benefit both businesses and consumers.

What they fail to mention, however, is the potential for this legislation to open the door to unnecessary issues that would put manufacturers and consumers alike at severe risk.

To date, in challenging the right-to-repair movement, manufacturers have primarily relied on anecdotal evidence related to product safety for both consumers and repairers (for example, the inherent dangers surrounding the replacement and maintenance of lithium-ion batteries), the protection of intellectual property rights (to curtail the counterfeit market), potential breaches of privacy and cybersecurity issues for consumers, and increased exposure for liability. What has been missing is empirical research to support these arguments.

Indeed, the first (and only) peer-reviewed paper to study the economic and environmental implications of right-to-repair conclusively found that right-to-repair laws would harm environmental and economic concerns rather than alleviate them. Unfortunately, this paper has predominantly flown under the radar and is not being used to its full potential.

The Need for a Measured but Firm Response

Industry groups need to form a united front against the movement. At a minimum, this will involve funding independent empirical research on these issues (beyond mere anecdotal evidence). Leaders also should take an active role in and filing amicus briefs in all cases where this issue is before the courts (even if their particular products are not at issue). Finally, manufacturers should actively engage with legislators who are crafting these bills. It is far better for them to participate in the process to ensure certain carveouts and protections are in place than to sit in defiant silence.

Overall, the movement is very good at telling its story. It is winning high-ranking supporters by the day. The current state of things presents a pivotal window of time for manufacturers to begin telling their story, at the very least, in a meaningful way. Even though the opportunity to eliminate the narrative has long passed, there is still a chance to shift it. Manufacturers must craft their response to the right to repair before it is too late.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.