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Court Decision Looms On Auto Right to Repair. A Lawyer Explains What It’s All About.
Sometime in the next few weeks, a Federal Judge in Massachusetts will issue a ruling on the State’s recently passed Question 1. Here’s what’s at stake in the case.
Sometime in the next month, a federal judge in Massachusetts will issue a ruling on what may be the most consequential legal case on the right to repair in a generation. At stake: owners ability to repair modern vehicles that wirelessly transmit maintenance data using so-called “telematics” systems.
The case, Alliance for Automotive Innovation v. Healy (PDF) stems from Massachusetts’ voters’ passage of Ballot Question 1 in November, 2020. That ballot question extended Massachusetts’ eight year-old, national standard-setting automotive right to repair law to encompass repair and maintenance data transmitted wirelessly to automakers via vehicle telematics systems.
The automobile industry spent tens of millions of dollars to defeat that measure - with little to show for it. Question 1 passed with almost three quarters of voters (74.9 %) voting “YES.” Immediately following its passage, the automotive industry sued to block implementation of the law. Their argument: that Massachusetts voters had illegally pre-empted federal guidelines for vehicle safety - and in a way that put drivers at risk. “Massachusetts’s new Data Law will reduce the security of these systems, seriously hampering manufacturers’ attempts to keep vehicle data and vehicle systems safe,” their complaint reads, in part.
Months of hearings in federal court in Massachusetts have weighed whether the case made by automakers is a valid one, and whether Question 1 is too flawed to implement. The case has delayed implementation of the law, with Massachusetts’ Attorney General Maura Healy saying she will wait until a decision in the case is reached before instructing her office to begin enforcing it.
At their last hearing in late July, Judge Douglas Woodlock told lawyers for the Alliance and the Massachusetts Attorney General’s Office (AGO) that he expects to issue a decision by August 20. Judge Woodlock asked the AGO to continue its stipulated stay of enforcement of the Data Law until that date. (AG Healy initially said she would delay implementation only until July 31st.) The judge subsequently delayed his decision to September 20th, citing the complexity of the issues and also confounding factors like the resurgence of COVID.
Whatever the date, a decision is coming. So what is at stake in this suit? What legal arguments are likely to hold sway as Judge Woodlock makes his decision? And what happens next? Fight to Repair spoke with attorney Alison Eggers of the law firm Seyfarth, which has been providing continuing coverage of the hearings on Question 1 and one of the most consistent sources of news and analysis about the hearing. (Thanks Seyfarth!)
This conversation happened at the beginning of the trial back in May, so some of this information is speculative. I’ll update this with links to coverage of the subsequent trial when appropriate. And, obviously, I hope to update this once a decision is out. In the meantime, here’s my conversation with Alison from May:
Paul Roberts, Fight to Repair: OK. First question: what is the crux of this lawsuit by automakers? What is the legal argument they’re making?
Alison Eggers, Seyfarth: Yeah, so the crux of this lawsuit centers around Question One for Massachusetts, which passed in 2020 and that ballot initiative requires manufacturers to provide access to telematics data in their vehicles that are sold in Massachusetts, beginning in model year 2022 to independent repair shops and even to individual consumers to be able to fix their own vehicles. The manufacturers object to that because, you know, vehicles at this point are computers on wheels. There's a lot of IP, there's a lot of proprietary systems, there's a lot of research and development that goes into new vehicles.
And so the idea of having to hand over to a third party, all of that information and technology and software that they have developed is objectionable for a variety of reasons.
Paul Roberts: And if you can sort of rehearse it, the position of the state of Massachusetts, obviously the ballot measure wasn't about handing over source code, but handing over software codes that used to do maintenance and repair, diagnose problems and maybe even add replacement parts to the car. So what is the position of the Bay State in this case?
Alison Eggers: So the position of the Bay State of the Attorney General who is tasked with defending Question One as a ballot initiative and then now as a law, is that this was a validly passed ballot initiative, the consumers of the state, the voters of the state spoke and they want to be able to access this information or more specifically, have independent repair shops, access this information so that they can repair vehicles outside of a dealership context.
Paul Roberts: OK, and as we know from the campaign for this and the ballot measure passed with - I think it got more votes than any other ballot measure in the history of the state - a very strong majority. But the crux of the campaign centered on cybersecurity or data privacy, kind of a mix of both. The automakers obviously were making claims that providing this information was going to put the safety of drivers at risk or their privacy or both. Is that is that one of the conversations that's going on in the courtroom right now around the cybersecurity question? And if so, what does it center on?
Alison Eggers: It is so during the campaign for Question One, I think this was in summer of 2020. The National Highway Traffic Safety Administration actually submitted written testimony to the Massachusetts legislature expressing some concern that Question One would require manufacturers to redesign vehicles in a way that necessarily requires cybersecurity risks. And then that is compounded by the fact that they were required to do that in a timeframe that made design and implementation of any meaningful countermeasures effectively impossible. Keep in mind that manufacturers are planning vehicles years in advance.
So while we're talking today in May of 2021, the model year, 2022 vehicles are already in production and for many manufacturers already rolling out. So it was a very short timeframe under the Question One outcome that required manufacturers to overhaul significantly in many respects the way that their vehicles are manufactured, simply a huge, huge challenge for them.
Paul Roberts: Indeed, indeed, and from reading your account of these, it seems like there is some contention or some back and forth about access to the actual code that runs on these cars to try and resolve these issues around cybersecurity risk. In other words, the Attorney General is saying, well, if you say there's a cybersecurity risk, we have experts, please make the code available so that we can assess whether those claims have any substance, and the automakers seem very reluctant to do that. Is that an accurate kind of account of what's going on?
Alison Eggers: That is absolutely fair. Absolutely. Yeah.
Paul Roberts: And I guess they made a hard copy of the code available in a room in Detroit, basically. And we're asking that the Attorney General's experts go to Detroit to this secure room to look at it. And I guess the judge said that that was not really feasible.
Yeah, I think Judge Whitlock said something along the lines of all roads don't lead to Detroit. So the manufacturers had agreed to make some of the information available for inspection. And as you say, it was only at one location in Detroit, but solely on a read only basis. What the Attorney General wanted is...
Paul Roberts: Does that mean basically hard copy when they say read only basis? Does that mean...
Alison Eggers: No. Given the sheer amount of data and the fact that it is the software source code, it would probably be electronic on a computer or a secure terminal that the expert could review it. So, nobody's printing out reams and reams of paper of the source code. My guess is it would be a secure computer. And the Attorney General objected to that and said that her expert should have access to it, a copy of it, because given the sheer volume and the complexity of the data, her expert would probably need to write his own code to understand and really dig into what was going on in this...
Paul Roberts: In the same way that you would want to use a search feature to find or I'm sure you guys lawyers have all kinds of litigation tools to find the relevant content and what you're looking for, that that's basically what they're talking.
Alison Eggers: Exactly.
Paul Roberts: And the judge was actually not that amenable to that particular request that they be able to have the right tools to interrogate the code.
Alison Eggers: Exactly. Judge Woodlock did order that the manufacturers would set up additional sites in Boston and Seattle that would allow the Attorney General and her expert to look at that information, but did not order that it be produced wholesale in a standalone copy so that the expert can work on it, on his or her own writing code to analyze it.
Paul Roberts: And was I right to read that? Actually, a whole bunch of the litigants in this, particularly European automakers, basically dropped out of the suit rather than have to comply with that order to make their code available to the attorney general?
Alison Eggers: They did end up dropping out, the position for some of the foreign auto manufacturers was that the source code was not available to them because it was held by parent companies that were European or elsewhere. And the judge was not terribly sympathetic to that argument and said basically, you're not going to be able to participate in a limited capacity. You're either participating or you're not. And so the end result of that is that those foreign auto manufacturers did drop out. Not all of them. Three of them.
Paul Roberts: Well, what are the legal questions here when we're talking about going looking at source code and trying to ascertain whether these claims about cybersecurity risk are valid? I mean, I can understand those from a technical standpoint, whether there is any there there, whether there's any cyber risk there. But like I'm trying to figure out, like, how would that intersect with the law at question here?
Alison Eggers: In a couple of different ways, the biggest one, at least in the way that the claims are pled in this case, is there's an unfair takings claim, essentially that the state is taking the IP that is owned by the auto manufacturers and forcing them to make it available to third parties and so that the state is interfering with that right of theirs to own and control that source code and access to that data. So that's the biggest place that it comes in. There are also arguments in the case that the state law is going to interfere with federal regulatory schemes, federal laws that would address how cybersecurity issues, data issues, ownership issues, and that's really the biggest piece of the litigation itself or what we call these preemption claims.
Paul Roberts: For the first part of that, the unfair takings, again, my understanding is all along, this law does not ask them to turn over source code. It merely asks them to provide access to diagnostic data that their authorized repair people have access to. So there was never any question of intellectual property involved here, although they'll try and say that service manuals are intellectual property and so on. But so is the intent of the attorney general then to say, you know, we've looked here and there's nothing that would be covered by this law that would in any way affect this code that you've made available to us, is that kind of the goal or what is the goal?
Alison Eggers: That would be my guess. I will say, you know, it's hard to read into this at this point because while the case is happening very quickly, so much of it at this stage happens just between the parties. So we know about some discovery disputes that they have had because they've gone back before the court for resolution, but in terms of the discovery issues and the documents that are being exchanged that are not at issue that nobody's objecting to, you know, we don't really have good insight into what that is, and so it's hard to say what the legal positions are going to be going forward. You can glean a little bit from some of the filings. But at this point, it's hard to say exactly how anybody's going to approach their positions and proving those out before the court.
Paul Roberts: So you're getting this kind of pointillist picture of it based on what is being disputed in front of the judge versus everything that's going on.
Alison Eggers: Exactly, and a good example of that is in the most recent discovery hearing before Judge Woodlock, one of the disputes between the parties was the attorney general's resistance to answering questions in interrogatories and requests for admission that go to the legal positions that the state is going to take. Typically in discovery, you're not required to answer questions like that that are purely legal in nature. They're designed more for fact discovery. But the court essentially said, look, they have a right to know what your legal position is going to be, to know what your interpretation of this is so that they can go forward in this case. So you need to answer those questions and give them some insight into how you think the state is going to enforce Question One.
Paul Roberts: OK, in other words, what what might be considered violations of Question One and what might be considered acceptable under Question One? You have to be clear about that.
Alison Eggers: Yeah. And I think I mean that that's a fairly unique circumstance that the court was in there. And it's a fairly unique decision. But you can see why Judge Woodlock came to that conclusion, because this is a new law. And so it's really hard for anybody to litigate what it means, what it what the implications are for an industry if you don't actually know how the Commonwealth is going to interpret what is required under that law.
Paul Roberts: Well, it is a new law and it isn't right, because we have the 2013 law that basically is the same law but does not cover telematics and it merely is an extension of that. So couldn't the state say, we've got this law, we've been enforcing it for the better part of a decade? So what right?
Alison Eggers: Absolutely could and for all I know, which I don't, to be clear, they may have said that their responses to those questions are not. The following Monday. Right. So it was a very short turnaround, but that may have been their response.
Paul Roberts: OK, so for the second part of that, the big part, the state interfering with the federal regulatory schemes and laws, and that would get back to the letter that got sent over the summer and so on. I think one of the from what I understand, one of the objections of the Massachusetts Attorney General and this rings true to me is the federal government doesn't really have any cybersecurity standards because they've never published them, they don't seem to really enforce them so far as we have Tesla auto pilot cars driving under semi's and decapitating their drivers. So what are these standards? And if they don't exist, how can we possibly violate them?
Alison Eggers: Yeah, and that has been a source of great debate and back and forth between the state and the alliance, trying to sort of suss out what those issues are, the original complaint in the case, I think it brings seven claims, six or so of them are based on preemption challenges under various federal laws. And one thing that the attorney general presses on in most of the pleadings and a lot of the hearings is "tell me exactly what these are, what exactly are the preemption issues?" And that is a hurdle that the alliance is going to have to prove up when we do finally get to trial is to really outline and clearly state where those conflicts are.
Paul Roberts: And presumably that would require them to point to specific guidelines and ideally enforcement tied to those guidelines, right?
Alison Eggers: Absolutely, and they have started to flesh some of this out, I think, in some of the more recent pleadings in the case. But I think we're probably not going to get the full view of it until we actually get to trial, which is coming up very quickly. This was a very compressed timeline that the court put into place.
[Editor’s note: as Seyfarth noted in a subsequent write-up on deliberations, the issue of federal cybersecurity guidelines turned emerged as a central bone of contention in the trial. Automakers argued that Massachusetts is running afoul of federal cybersecurity guidelines. Massachusetts (and apparently Judge Woodlock) have argued that no such guidelines exist to run afoul of.]
Paul Roberts: Why is it so quick? Why the quick timeline, given the complexity of the issues at stake?
Alison Eggers: So part of the reason for the quick timeline was when the law was going to go into effect. And in the end, the Attorney General agreed to hold off on enforcing the law until they get through a trial on the merits. Another piece of it is that the alliance, after they filed their complaint, they also filed a motion for a preliminary injunction that would prevent the law from going into place. And Judge Woodlock has made very clear throughout all of the hearings that we've had so far that he does not want to decide these big constitutional issues based on anything less than a full record. And to have a full record to really be able to dig into these issues requires you to get through discovery, which normally that process can take a year or longer in some cases. But here we're compressing the entire lifetime of a case into less than a year's time. So everybody is working fast and furious on this case.
Paul Roberts: So this issue of preemption is obviously that there are some things that are apportioned to the federal government to handle and many other things to the states and sometimes both those entities like with environmental laws, you know, you can have both state and federal environmental laws and obviously you can have both state and on issues related to automobiles and so on. We already have a regime which states can pass certain laws that other states don't follow. Right. Which is the 2013 law is an example of that. So what is the preemption here? And in 2013, the automakers just got together and signed an M.O.U. basically saying, okay, we'll just recognize this law nationally. Why now are they taking it to court and fighting it on basically the grounds that the state shouldn't be able to do this?
Alison Eggers: I think a lot of it has to do with the change in technology that we've seen since the last time around. You know, the technology that goes into vehicles has gotten far more advanced and we see greater integration now between systems and the ability to share information out from the vehicle. So, for example, your GPS, your diagnostic systems that work together, all of those can be used to share information or send information to or from the vehicle. And so I think part of the concern is that we're just dealing with so much more information, so much more sensitive information, real time information in a way that I think we were not dealing with during the 2012 and then ultimately the 2014 M.O.U. period. All of that reflects significant investments by the manufacturers in those technologies and they want to protect where they have made those investments of time and money in their current products.
Paul Roberts: Is the given that we're talking about repair and maintenance though, and not, again, divulging source code that people might copy. Is, I guess one point I always try and make is the price of these convenient features a monopoly and aftermarket service in parts? And is there an argument that will if we're going to do this, the only way we can do it safely is for us to have a monopoly on the entire lifecycle, to basically build a walled garden and everybody, including repair shops, have to live in our garden. Is that kind of where they're going? And is that something that you think the courts are going to be, you know, sympathetic to?
Alison Eggers: I don't know that the courts would be sympathetic to an argument that anybody should maintain the entire lifecycle of service and whatnot in vehicles. I mean, I will say that most states, every state has a highly regulated system of vehicle sales for what we call traditional dealerships. And those require most auto manufacturers to have dealers and to sell and service through those dealers. So there is already a system in place that sort of locks in certain parts of the market, particularly sales that can only go through dealerships as it is now. The other thing to think about is a liability perspective for the manufacturers. Because of the increasing complexity of vehicles, not everyone can fix some of these issues. And so it also exposes manufacturers to potential liability from a product liability perspective. You know, how do you divide up that liability between, say, an independent repair shop who might do something wrong or doesn't have the right tools or doesn't have the right experience on these highly complex vehicles? What happens if there's an accident after that? There's no ability for the manufacturers to even require independent shops to be certified or trained in certain ways to fix the vehicles. That's just not a possibility under the Massachusetts law. So I think there are layers of issues here that go beyond simply wanting to have more direct control over fixing a vehicle. It does implicate safety issues and security issues and ensuring that safety for the public.
[Editor’s note: this is a classic kind of anti-repair argument. Essentially: “Liability” (hand waving) and “Complexity!” (hand waving). I’m not a lawyer, but it is not clear to me how manufacturers end up liable for faulty repairs done by car owners - if case law on that exists, please show it to me. Again: #notalawyer. As to the complexity issue: there are plenty of people capable of doing even the most challenging repairs to electronics or software - micro soldering, you name it. It kind of pisses me off, as you can tell from my response (below).]
Paul Roberts: I know that's our argument, because this is an argument that is about automobiles, but obviously has much broader implications because, of course, everything is basically a smartphone in a different form now. Right? I mean, home appliances and, you know, farm equipment and machinery. And basically most manufacturers of things are looking at Apple Computer and their business model and saying, ‘Oh, that's what we want! We want a walled garden where we collect reams of data that we can monetize in different ways and in which we can basically kind of force device upgrades on a very at a very regular cadence, because that's profitable for us to do and in which we kind of lock out owners and independent repair people from maintaining devices, extending the life, doing simple maintenance and repair and part replacements and all the things that we kind of expected that we should be able to do with our own property.’
So John Deere does this in the agricultural sector in case and, you know, Samsung and LG and so on. This is obviously becoming a bone of contention and for a lot of reasons, among them environmental. This case would seem to be kind of an early test of whether O.E.M.'s are going to have a legal basis on which to make that argument that in fact, yes, they and they alone should be the ones to manage the ecosystems that they create, the for profit ecosystems of these products. I guess I'm interested kind of where do you think the courts are going to fall on this?
Alison Eggers: I mean, you're absolutely right, this is the first sort of test or an early test for those questions, it will not be the last one. And I think it's going to be challenging for the courts because they're going to be in a position of trying to balance competing interests between IP ownership, what ownership rights a company has and products they're producing, versus whether or not the consuming public should be able to alter, you know, crack the case, you know, work on their products themselves. And I honestly, I don't know how the courts are going to come out. I think you will probably get some varying and some differences between decisions. And ultimately, it may be a question that does have to be resolved either by the appellate courts or potentially by the Supreme Court if we have a long enough history of conflicting outcomes.
Paul Roberts: You brought up the timeline, which is a real big issue with this, which is there is this insanely quick timeline to implement this law, again based on how long the development timeframe for automobiles is. That seems like something that, as happened in 2012 when the ballot measure passed and the legislature took it up and kind of modified it and passed an updated version of it, that then became the law. That seems like the type of thing the Massachusetts legislature could do to say this timeline is crazy. We're going to change the timeline. I'm not sure if this legal case has preempted them doing that or what. But if that one piece of this law seems nonsensical, is that enough to sink the whole ballot measure or is it something the courts could say? Yeah, this piece of it isn't really feasible. But the law, but the meaning of the law or the law itself should survive. And we should just change this timeline from 2022 to 2025 or something like that.
Alison Eggers: It's possible this could come out in a lot of different ways, the legislature could intervene, the court could modify pieces of the law, strike down some, not all of them. And I really don't have a good idea of where Judge Woodlock is going to come out on that, because at this point, it's moving so quickly and we're going to get an answer after a trial on the merits in June or probably July. So we will have an answer soon. I just don't have any indication of what way the court is going and whether the legislature has any interest in it.
Paul Roberts: I obviously do a group that supports the right-to-repair and a cybersecurity group. One of the concerns we always have is that, you know, lawyers, judges tend not to be technologists by training. Some of this some of the arguments made are don't have much basis in reality from a from a technical standpoint. If you talk to people who are information security professionals but sound plausible in a courtroom. Right? Even sort of things you said things are too sophisticated to ordinary people can't do these repairs. And it's like, well, you know, there are YouTube channels of people doing Microsoft ring. And there's this guy, Rich repairs up in New Hampshire who rebuilds Teslas from scrap so people can do owners can do a tremendous amount. And it's unclear whether the population of owners is any less adept than the population of licensed authorized repair people. But again, you can say cyber or hacker, and it's and kind of people scream and run from the room. Do you like I guess do are judges sort of cognizant of that? I'm out of my depth on this. I don't really know north from south on cyber security. And so I'm going to kind of bracket these cases, these arguments that both sides are making and just say this is beyond my Ken and I'm going to focus on the legal matters before me. Like, how does that, how does the complexity of the cybersecurity issues or the IT issues kind of complicate this case?
Alison Eggers: It will complicate it in terms of the amount of time needed to understand the issues, and it will make the expert testimony particularly important, and that's a challenge for any case where you have somebody who needs to come in and convey to the court or to a jury a really nuanced bit of expertize or a complicated bit of analysis. That's not uncommon in judges do that all the time. And they do rely on experts and they do rely on the expert analysis to help understand those issues. If there are purely legal issues and purely legal issues that can be dispositive to the case, the court might be inclined to focus on those. But I have found in my practice that most judges are willing to roll up their sleeves and really dig in and try to understand the issues that are before them. And I think that's particularly the case here. Judge Woodlock is an experienced judge. He has been on the bench and heard a variety of issues over the course of his career. And he has said time and again during the hearings so far on this case that he wants a full record. He wants to understand what's going on and what he's doing because he wants to get it right. And he appreciates that this is a really important issue for both sides of it. And so he wants a full understanding of it before he issues any ruling that is going to impede the implementation of the law or let it go forward. He wants to fully understand what he's doing.
Paul Roberts: OK, last question, because I know you're busy. Any thoughts or inkling as to which way this is heading or who has the tougher case to make? Does the fact of how overwhelmingly it was approved by voters also tipped the scales one way or the other? Does that end up helping the AG and sort of saying, listen, voters really want this.
Alison Eggers: The AG has certainly pointed that out regularly, both in the briefing, during the hearings. This was overwhelmingly approved by voters. I think it was seventy-five percent to twenty-five percent. So that's a pretty significant majority of the voters who voted yes on Question One. And the AG has raised that multiple times with the court. You know, whether that is anything that ultimately gets them something from a legal perspective. I don't know, because if at the end of the day, the law is illegal for one reason or another, it is. And then at that point, it would be up to the legislature to take action to implement it in a way that potentially would survive court review.
Paul Roberts: Are you dodging my question about which way you think things are headed?
Alison Eggers: Didn't I look at that? I don't know. I'm not trying to dodge the question, I don't have a clear sense of it. It's a highly complicated question. It brings in difficult legal questions. There are compelling concerns on both sides in terms of balancing property rights, ownership, trade secrets, things that the American legal system really holds in high regard and defense. But at the same time, this was a ballot initiative. This was something that the people in Massachusetts voted yes for. And so there is some competing interests there on that other side. So it's hard for me to predict how it's going to come out, particularly given what little insight we've gotten from what's going on in the case, just from listening in on hearings and from reading the pleadings that are going in. You know, at this point, it's moving. It's moving too quickly. And there are just too many pieces that haven't fallen together in a way that would let me look at it in...
Paul Roberts: There's too much going on behind the scenes, really.
Alison Eggers: Too much, yeah there's just too much.
Paul Roberts: Do you think this is a case that could go to the Supreme Court if it were to be appealed one way or the other?
Alison Eggers: It depends on how the decision comes down and on what basis the decision is made, whether or not that would be something that would continue to be appealed. It could also be something that, depending on the outcome, the parties can reach an agreement. There could be some other action that would moot the decision that the court makes. Is it possible? Absolutely, because if you look at the claims that the alliance has asserted, they do touch on so many pieces of federal legislation and so many federal regulatory schemes. So this could be a case that would go on up, whether it gets to the Supreme Court, I don't know that. But I could see an appeal coming no matter which way the decision is.
Paul Roberts: Alison, thank you so much for taking the time. It's been a really great conversation.
Alison Eggers: I've enjoyed it. Thank you.
Paul Roberts: And thanks so much for the work you guys are doing. Just kind of providing coverage of this. It's super important.
Alison Eggers: It's a fascinating issue, and...
Paul Roberts: Nerdy, esoteric, but important.
Alison Eggers: You did, well, I mean, it is, but it's not. It's esoteric in a lot of ways. But as you pointed out earlier, it has implications, much broader implications for the way that consumers interact with their products and in the way that manufacturers create and put those products out into the market. So to me, it's a fascinating issue. Maybe I'm just a little nerd.
Paul Roberts: Right, right-to-repair, and obviously the Internet of Things, you know, digital transformation is creating these types of conflict points all over the place. Right. And we can see an argument like this in the refrigerator and home appliance market. It's kind of like the Lexmark printer case, like replicated millions of times across the economy, you know. Yeah.
Alison Eggers: So many places that this case could have happened in so many other categories. Right. This just happened to get to the front line.
Paul Roberts: Because of the enlightened voters of the state of Massachusetts. God bless us.
Alison Eggers: Looking forward to seeing what the outcome is.
Paul Roberts: All right. Thanks, Alison.
Alison Eggers: Thanks. Have a good one.