Justice Department Says John Deere Should Let Farmers Repair Their Tractors

President Biden’s Department of Justice has formally made its position known on a class action filed against John Deere over farmers’ right to repair their tractors. 

John Deere owns 53 percent of the market share for tractors in the U.S. and has become notorious among farm workers for using monopolistic practices when it comes to repairs. Last month, Forest River Farms launched a class action lawsuit against John Deere accusing them of violating antitrust laws with its repair policies, including putting software locks on their tractors and restricting access to repair tools. In a “Statement of Interest” filed Monday, the DOJ sided with plaintiffs and forcefully disagreed with Deere’s analysis of antitrust law.

“I'm thrilled that the Department of Justice is weighing in on this issue,” said Willie Cade, a board member at Repair.org whose grandfather served as a board member at John Deere for 30 years. “I'm sure he would be pleased that there is support being garnered for farmers and ranchers,” Cade said of his grandfather.

In its statement, the DOJ argued that because of Deere’s practices, when tractors break, “repair markets function poorly, agriculture suffers. Crops waste. Land lies fallow.” It expressed concern that “repair restrictions can drive independent repair shops out of business by raising their costs or denying them key inputs, which, in turn, leaves consumers with fewer choices.”

While the decision remains in the hands of the courts, the federal government can wield influence in certain types of legal cases when the interests of Americans are at play. Such “statements of interest” often take the form of legal arguments that clarify existing precedent and lay out the interests of the government, and by extension the American people. According to a 2017 paper on statements of interest from the Harvard Civil Rights Civil Liberties Law Review, “Because the document embodies the formal position of the federal government, the filing of a statement of interest in a case can serve as a ‘game changer’ for litigants.”

The Biden administration has sided with agricultural workers and consumers who want a right to repair their own equipment. For instance, it directed the Federal Trade Commission to adopt right-to-repair policies and Biden signed an executive order granting farmers protections if they choose to repair their own equipment.

Throughout the 22-page statement, the DOJ refutes John Deere’s response to the lawsuit, in which it claims it should be exempt from antitrust scrutiny because farmers are well aware of the repair requirements before they purchase equipment. 

Deere argued that this “deception or surprise” standard must be met before bringing an antitrust case under the Sherman Act, the 1890 law which outlaws "monopolization, attempted monopolization, or conspiracy or combination to monopolize.” Yet, as the DOJ points out, the Supreme Court has historically not used “deception or surprise” as the only standard in antitrust cases regarding “aftermarkets,” or sales that take place after the initial sale of a product, including repairs. 

To make this point, the DOJ invokes the best known antitrust case involving repairs. In a 1992 Supreme Court decision, the court sided with independent companies who sued the camera company Eastman Kodak for squeezing them out of the repair market by refusing to sell the companies parts. (The Kodak decision was the last time that a group of plaintiffs won a case in the Supreme Court under Section 2 of the Sherman Act, which bans monopolization, according to Daniel Hanley, a legal analyst at the Open Markets Institute.)

While Deere alleges that they don’t have the market power to commit a Sherman Act violation because farmers can just buy other tractors, the DOJ points to the Kodak decision, which lays out the much more complex relationship that consumers have to products after they purchase them. In the Kodak case, the court was not swayed by the argument that competition at the point of purchase is the same thing as competition after a purchase, because consumers who purchased expensive products like photocopiers were limited by “switching costs” if they wanted to exit Kodak’s proprietary repair ecosystem. 

Other courts have followed this interpretation of the Kodak case, the DOJ said. The Third Circuit court found, for instance, that courts should consider competitive pricing and the defendant’s share of the repair market in addition to switching costs and upfront information about repairs.

Yet over the years, many lower courts have defanged the Kodak Supreme Court decision by interpreting it ever more narrowly, Hanley said. Those courts have put ever more responsibility on the consumer to be incredibly savvy and put less onus on corporations for cornering the market. The DOJ is trying to reverse that trend by setting the record straight on the importance of the Kodak case, not just for the John Deere lawsuit but for other right-to-repair cases going forward.

“The Department of Justice quite literally takes out all the good tidbits within [the Kodak decision], all the things that the Supreme Court pronounced…and also attacks how John Deere basically ignored the Kodak case,” Hanley said. (John Deere did not even cite Kodak in its response to the class action, as the DOJ points out in its statement.)

Even if John Deere makes it clear to farm workers that they will handle repairs in-house, “that doesn't indicate the cost of those repairs, the frequency of those repairs, the timing of those repairs, or how long they take,” Hanley said. “It's basically infeasible for people to know exactly how all these different variables play out.”

Cade told Motherboard that the DOJ’s involvement is encouraging, but that legislators still need to take immediate action to address the right to repair. “Lawsuits take years, if not decades, and the harm is being done now,” Cade said. “There are 11 states with agricultural right-to-repair bills currently active and they need to act.”

While the court is free to ignore the DOJ’s statement, it is a powerful statement and its points will be hard to ignore altogether. “This is an important signal that under the Biden administration, this is an important issue,” Hanley said, “and should be one that consumers and other purchasers should win.”

John Deere did not respond to a request for comment.