Right-to-repair advocates score a small win at John Deere's expense

The writing is on the wall.

Should John Deere choose to defend itself in court rather than attempt to reach a settlement, it very much may be handed a massive spanking by the Justice Department, which alleges the company’s repair restrictions violate federal and state antitrust laws. See here, here and here.

In a nutshell, the Justice Department claims Deere is scamming farmers by forcing them to exclusively use Deere dealers to repair their combines and tractors when they stop running. The feds have a case.

As it turns out, it takes proprietary diagnostic software to fix broken Deere tractors. Software that Deere refuses to sell to DIY farmers or independent repair shops. Deere likes it that way because it provides the company a significant after-market revenue stream.

The four-count Federal Trade Commission lawsuit isn’t playing around, alleging Deere monopolized the restricted repair services market, violated the FTC Act by using an unfair method of competition, and violated both Minnesota and Illinois antitrust laws.

John Deere lawyers threw spaghetti at the court walls, hoping something would stick and keep it from having to defend its software at trial.

Among the arguments Deere makes are that the feds’ claims of unfair competition and monopolization are factually and legally insufficient. And for good measure — just in case the unfair competition argument went south — Deere challenged the FTC’s constitutional structure, whether states that joined in the Justice Department’s case have standing, as well as the timeliness of the states’ claims.

The ruling by Judge Iain D. Johnson, of the District Court for the Northern District of Illinois-Western Division, rejected all of Deere’s legal posturing.

Johnson writes that at this stage of the case — a motion for judgment on the pleadings — he has to accept the Justice Department allegations as factual:

“The Governments say there’s a throughline between Deere’s practices: farmers have no alternatives because of the system created by Deere, which charges supracompetitive prices because of the lack of any alternatives. In technologizing its equipment, Deere makes farmers reliant on Deere’s own ADVISOR software. And, in only licensing that software to its authorized Dealers, Deere forces farmers to visit those shops instead of using closer, cheaper options.”

Johnson also noted Deere reaps massive profits from its parts business, which relies on those authorized dealers’ repairs. And Johnson says “because only Deere can create and license the ADVISOR [repair] tool, it entirely controls who (and how many) Dealers may perform restricted repairs and, by extension, how much the Dealers can charge.”

Which suggests Deere might have a significant uphill climb to refute the Justice Department.

This isn’t Johnson’s first rodeo in handling Deere’s software litigation. In late 2023, he rejected Deere’s attempt to dismiss consolidated lawsuits filed by farmers alleging that Deere conspired to restrict services for repair.

In its most recent failed motion for judgment on the pleadings, Deere recycled some of the same arguments it made in 2023, to which Johnson responded:

“Sequels so rarely beat their originals that even the acclaimed Steve Martin couldn’t do it on three tries. See Cheaper by the Dozen II, Pink Panther II, Father of the Bride II. Rebooting its earlier production, Deere sought to defy the odds. To be sure, like nearly all sequels, Deere edited the dialogue and cast some new characters, giving cameos to veteran stars like Humphrey’s Executor. But ultimately the plot felt predictable, the script derivative. Deere I received a thumbs-down, and Deere II fares no better.”

In the immediate aftermath of Johnson’s ruling no one was talking publicly. Not John Deere. Not the Justice Department. Perhaps behind the scenes, the feds and Deere are talking to each other.

The Justice Department is seeking a permanent injunction against Deere, as well as an order to make the company’s full-function service ADVISOR software available to all owners of Deere large tractors and combines.

Back in January when the outgoing Biden administration filed suit against Deere, the company said publicly:

“The complaint is based on flagrant misrepresentations of the facts and fatally flawed legal theories and it punishes innovation and procompetitive-product design. John Deere will vigorously defend itself against this baseless lawsuit.”

Which is what you would expect. But I wonder if Deere higher-ups privately feel the same way. Are they willing to legally go to the mattresses, all the way to the Supreme Court? I feel as though this isn’t the type of case the Justice Department will drop if it loses at the district court.

That the Trump Justice Department hasn’t flat out dropped the case is telling. The feds appear squarely in the farmers’ camp. It’s likely John Deere lobbyists are working overtime to get lawmakers to put pressure on the Justice Department to drop the case. How might that play out?

Are Deere and the Justice Department exploring a settlement?

I imagine there are many moving pieces — many of which have nothing to do directly with the proceedings in Johnson’s court.

Right-to-repair advocates were applauding Johnson’s ruling that the antitrust law case can go forward, but whether farmers who own Deere rigs ultimately get access to the software they need to independently fix them is still far from settled.