On March 14, 2022, a bipartisan trio of U.S. Senators introduced a bill (S.3830) that would require manufacturers to provide the tools and documentation necessary for consumers and third parties to repair electronic equipment. Dubbed the Fair Repair Act of 2022, the bill is the Senate version of a similar bill (H.R.4006) introduced in the House last June. The proposed legislation covers products ranging from agricultural equipment to consumer electronics and is the latest in a series of federal and state proposed laws seeking to codify the “right to repair.” If the bill becomes law, manufacturers will not only have to comply with the Act’s requirements, but they will also need to prepare for potential liability implications.
Attempts at codifying a right to repair are not new in the United States. Calls for automotive right-to-repair legislation go back to the 1970s. But the movement has hit its stride in the last decade. In 2013, Massachusetts became the first state to pass a right-to-repair law requiring vehicle manufacturers to sell their proprietary diagnostic tools and software to third-party repair shops, spurring a flurry of similar bills across the nation and bringing attention to the right-to-repair movement. Though the movement has had little success in codifying a right to repair so far, the tides may be shifting. Indeed, in July 2021, President Joe Biden signed a sweeping executive order that, among other things, encourages the Federal Trade Commission (“FTC”) to enact regulations prohibiting manufacturers from barring the repair of equipment and devices by consumers and independent repair shops.
It is against this backdrop that the Fair Repair Act was introduced. According to the Senators who introduced the bill, the Act is designed to protect consumers, farmers, and small businesses by ensuring the right to repair “digital electronic equipment,” which the bill defines as “any product that depends for its functioning in whole or in part, on digital electronics embedded in or attached to the product.” The Act’s scope is therefore purposely broad, encompassing everything from smart phones to farm tractors. The Act does, however, expressly carve out exceptions for medical devices and certain motor vehicles.
The Act would accomplish its goals by requiring original equipment manufacturers (OEMs) to make available, on “fair and reasonable terms,” all documentation, parts, and tools necessary to repair covered digital electronic equipment. The FTC would have primary enforcement authority. A violation of the law would be treated as a violation of the unfair or deceptive acts or practices rules promulgated by the FTC pursuant to 15 U.S.C. § 57a(1)(B). The bill would also give state attorneys general enforcement authority. But state attorneys general would have to first provide written notification to the FTC of any action brought under the Act, and a state attorney general could not bring an action for violation of the Act if there is already a pending federal action against the same manufacturer.
The Fair Repair Act and similar proposed legislation is not without controversy. Proponents of the bill contend that it will reduce repair costs by fostering competition and minimizing electronic waste, all while ensuring the viability of small independent repair businesses. Opponents of the bill, however, argue that it raises potential security and safety concerns. Implicit in these concerns is the potential for increased manufacturer liability.
The opposition’s concerns are not without merit. The Act expressly does not exempt security-related functions, such as phone locks. This has led to valid concerns over data privacy and cybersecurity breaches. From a products liability standpoint, however, the more interesting focus is on the Act’s silence concerning liability for manufacturers. Improper repairs by consumers and other third parties can cause equipment malfunction, product quality issues, and even personal injury. For example, a faulty cell phone repair could damage the device’s battery or processor, resulting in potential thermal runaway that can cause a fire or explosion. While the manufacturer in such a case would have a viable defense based potentially on product misuse, the manufacturer must still expend time and money to have the case dismissed, including the significant resources necessary for discovery and motion practice. Thus, should the Act pass and a proliferation of consumer and third-party repairs ensue, product manufacturers may see an associated increase in product-related litigation. To bolster any defense of product misuse in such litigation, manufacturers should consider whether a required release of information or tools to repair products should be accompanied with clear instructions on proper use, as well as disclaimers permitted under applicable law.
The extent to which the Fair Repair Act—or any similar legislation—may increase manufacturers’ liability exposure is unclear. But as the right-to-repair movement continues to gain momentum, manufacturers and litigators alike should consider and plan for the potential liability implications of these laws.