DePaul & Michigan law professors weigh in on right to repair


The CAR Coalition has released two research papers written by law professors that support the passage of federal legislation to support making OEM repair procedures and parts more accessible to give consumers the right to repair in both the collision and mechanical repair industries. However, the research shies away from efforts by insurers, often as a cost savings measure, to block reimbursements for repairs made using those procedures.

The coalition’s members include insurers, insurance and aftermarket parts trade associations, and parts dealers — some of which have actively opposed legislative initiatives that would require collision shops and insurers to follow OEM repair procedures in order to provide safe and proper repairs. The research papers argue that the issue is OEMs cutting off competition with aftermarket parts manufacturers and sellers by patenting parts and their designs as limiting access to necessary information for repairs.

Society of Collision Repair Specialists (SCRS) Executive Director Aaron Schulenburg addressed the topic earlier this year to say that OEMs barring access to repair procedures, training, and tools isn’t the issue and reiterated that sentiment this week.

“In the collision repair market, well-trained, well-equipped repair facilities are not struggling to gain access to collision repair procedures, but rather struggle to get insurance companies to recognize and reimburse for the necessary safety procedures spelled out in the readily available repair procedures,” Schulenburg said.

The Alliance for Automotive Innovation (AAI) also takes that stance. “Competition is alive and well in the automotive repair industry,” AAI Senior Director State Affairs Wayne Weikel told RDN. “Drivers today have a range of repair options: from a dealer repair facility to a national chain repairer to an independent repair facility. Seventy percent of most post-warranty vehicle work today is completed by the independent aftermarket. The Federal Trade Commission – the government’s top consumer protection and competition agency – has cited the automotive industry as an example of the repair aftermarket ‘working well.’ Finally, automakers make available to independent repair shops all the tools, parts and service information needed to diagnose and repair a vehicle today. Independent repair shops are a vital part of the overall repair ecosystem and the system is working.”

AAI provides more information in its right to repair myth vs. fact sheet.

CAR Coalition Executive Director Justin Rzepka, in a Sept. 20 news release, states that “Repair restrictions on automobiles are driving prices higher at a time when many Americans can least afford it. These research papers demonstrate the impacts of these restrictions on consumers’ bottom lines. As technology develops, policy surrounding these issues must as well. It’s time for Congress to get serious about solutions, including the REPAIR Act and SMART Act, to ensure consumers have options for quality, safe, affordable auto repairs and more control over their data.”

Rzepka didn’t respond to questions from RDN by the publication deadline.

Legislation that CAR Coalition and its paid researchers back are the Right to Equitable and Professional Auto Industry (REPAIR) Act and the Save Money on Auto Repair Transportation Act (SMART) Act. Neither has moved past being introduced.

The REPAIR Act would require automakers “to provide to a vehicle’s owner certain direct, real-time, in-vehicle data generated by the operation of the vehicle that is related to diagnostics, repair, service, wear, and calibration or recalibration of parts and systems of the vehicle,” according to the bill text. It would also mandate the National Highway Traffic Safety Administration (NHTSA) to issue standards for access to vehicle data through a standardized access platform. The SMART Act would limit design patent infringement liability for component parts used to repair the exterior of a motor vehicle, according to the bill text.

Each of the white paper authors tackles one of the bills — the REPAIR Act by Aaron Perzanowski, an author and University of Michigan law professor, and the SMART Act by Joshua D. Sarnoff, a law professor at DePaul University College of Law. Both said the compensation they received from the coalition didn’t sway the opinions they expressed and the research used in their papers.

Prior to his current position, Perzanowski practiced law at Fenwick & West in San Francisco and taught at Wayne State University and Case Western Reserve University. Sarnoff said his legal experience spans decades and includes practicing as a patent attorney and teaching intellectual property, administrative, environmental, and climate change law issues.

Perzanowski states in his paper that federal law “has reflected a policy favoring equal access to repair information” for more than 30 years but, during that time, manufacturers have developed “techniques” to restrict repair information and access to tools to consumers and independent repairers.

“Those tactics include encrypting software and data, adopting nonstandard interfaces, as well as rerouting vehicle performance and diagnostic data from the standard OBD system to closed telematics systems, which transmit data directly to manufacturers and dealers, excluding independent providers,” he wrote.

He also noted that consumers prefer independent repairers over franchised dealers “by a wide margin” and cited 2020 CAR Coalition data that says 70% of repair parts and services are supplied by independent providers. Auto repair has historically been “characterized by consumer choice, robust competition, reasonable prices, and reliable quality,” Perzanowski wrote.

Perzanowski argues that the increased technology in vehicles in recent decades including software code, electronic sensors, and telematics systems has given OEMs and franchised dealers “greater control over vehicle repair” and that the REPAIR Act “would empower consumers by requiring manufacturers to make vehicle data and repair information available to car owners and their designated repair providers through a standardized, secure platform.”

The act, he said, would also protect vehicle owner rights and promote “a robustly competitive repair industry” in three ways: by prohibiting OEMs from preventing vehicle owners or their designees from accessing vehicle data, repair information, and tools; requiring OEMs to make repair information and tools available to vehicle owners, repair facilities, and aftermarket parts manufacturers on “fair and reasonable terms,” and would use “industry and regulatory expertise to ensure the safety, security, and privacy of consumers with respect to vehicle data.”

During a hearing held last week by Congress’ Subcommittee on Underserved, Agricultural, and Rural Business Development, U.S. Rep. Claudia Tenney (R-N.Y.) said, “The right to repair is alluring in its simplicity. In theory, it seems obvious that if you do buy something, you own it, and you should have the freedom to do what you want with it. The right to repair, if properly designed, can create a world of consumer choice, competitive pricing, and potential cost savings. However, when this issue is examined in full depth, it becomes substantially less black and white.”

The 2014 MOU between automakers and the aftermarket, which is an agreement by OEMs to meet the requirements of the 2013 Massachusetts right to repair law nationwide, was also cited during the hearing as a good example for other industries to go by. It was touted by the Federal Trade Commission in its “Nixing the Fix” May 2021 report as having the effect of creating “a broad, if not complete, right to repair in the automotive industry across the United States.” Perzanowski noted the FTC’s thoughts on the MOU but countered that it’s “not future-proof.”

“While that MOU helped restore competition in the repair market, its provisions no longer adequately safeguard the interests of consumers and independent repair providers,” he wrote. “Shifts in vehicle design, the increasing reliance on telematics systems, the growing popularity of electric vehicles, and the emergence of new manufacturers not bound by the MOU all limit the ability of this private agreement to address anticompetitive behavior in the auto repair market.”

Sarnoff also cited the MOU, Massachusetts law, and the FTC’s stance but countered that only Congress “can restore consumer rights to repair automobiles using non-OEM parts and can restore the vigorous aftermarket in such parts and services.” Sarnoff and Perzanowski view federal law as being silent on the right to repair issue and believe it should be addressed at the federal level since it is of nationwide concern.

Perzanowski said the REPAIR Act “would enshrine in federal law the consumer rights adopted overwhelmingly by Massachusetts voters in 2013 and again in 2020, while adding important ongoing oversight by industry and agency experts.”

In response to questions from RDN, he added, “It’s an important piece of legislation that aligns with a number of policy recommendations I’d already outlined and endorsed in my book. Repair is a policy issue I’ve developed strong commitments around, which I haven’t shied away from expressing. And the opportunity to help shape public understanding on legislation is one I welcome.”

Through his research, dating back to court patent decisions made in 1850, Perzanowski said “longstanding legal rules support the notion that a right to repair one’s personal property is an inherent incident of ownership. These doctrines are meant to secure the rights of property owners to repair the things they own as they see fit, free from restrictions imposed by manufacturers, retailers, or IP rights holders. But while personal and intellectual property law…



Read More: DePaul & Michigan law professors weigh in on right to repair

2022-09-23 04:00:52

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