On Friday, June 25, 2021, a Massachusetts federal district court held the first of two closing arguments in Alliance for Automotive Innovation v. Healey, a case involving a motor vehicle manufacturer trade association’s challenge to a 2020 Massachusetts ballot initiative that expanded the state’s Right to Repair Law (the “Data Law”). Rather than discussing the legal consequences of the evidence presented during a bench trial held the prior week, Judge Douglas Woodlock focused the discussion on thorny threshold legal issues that may foreshadow how he will decide.
Ultimately, the court seemed skeptical that OEMs could comply with the Data Law’s requirement that they make significant changes to their vehicle telematics systems with model year 2022, which for some manufacturers has already begun. At the same time, Judge Woodlock expressed doubt that the OEMs have taken seriously warning signs that industry participants might seek statutory amendments mandating these changes. Although he did not tell the parties how he might rule, Judge Woodlock described the current situation as a “game of chicken,” and warned that “sometimes games of chicken don’t turn out well for one or the other of the chickens.”
Can the Court Sever or Amend the Law to Make Compliance Possible?
The Alliance has argued that OEMs cannot possibly comply with certain provisions of the Data Law which mandate wholesale changes to vehicle cybersecurity features by model year 2022. Discussion at the hearing focused heavily on whether the timing requirements of the Data Law—i.e., compliance by model year 2022—are severable from the rest of the law. Lawyers from the Massachusetts Attorney General’s Office (“AGO”) encouraged the court to sever or amend the law to postpone the date by which OEMs must comply and thereby save the law from being struck down, but Judge Woodlock signaled his view that the law cannot be severed. As “legislation” passed by the people, he doubted that the ability to sever or amend could be “subcontracted” to others, including a judge or the AGO. The Alliance agreed, arguing that the Data Law should get an “up or down vote.”
Does the Alliance Have Standing to Challenge the Data Law?
“Associational standing” has been raised repeatedly in this case, with the AGO arguing that because OEMs are not similarly situated with respect to how the Data Law impacts them, they lack standing to sue through the Alliance. Judge Woodlock noted that there was no evidence presented at the bench trial of conflict between the OEMs on this issue, but asked whether OEMs have suffered a concrete harm sufficient to confer standing to bring claims in federal court. The Alliance argued its members face imminent harm because certain provisions of the Data Law require immediate compliance. The AGO argued that the OEMs have not suffered any harm, but Judge Woodlock chastised the AGO for playing “cat and mouse” by not disclosing how the AGO intends to enforce the law.
During the hearing, the court suggested that concrete harm to OEMs is unlikely to come from rulemaking or action by the National Highway Traffic Safety Administration (“NHTSA”), which although not present at the hearing, was the target of some of Judge Woodlock’s harshest criticism. In response to the Alliance’s argument that it could be harmed if NHTSA sought to enforce federal safety standards that conflict with the Data Law, Judge Woodlock noted that NHTSA has “done nothing” to enforce standards concerning cybersecurity, and if it tried to, the lack of promulgated rules and regulations could render such enforcement “arbitrary and capricious.”
What is Next?
A second round of arguments will be held on July 21, 2021, at which time the court will hear further post-trial argument as well as argument on the AGO’s motion to dismiss the balance of the Alliance’s complaint. In advance of the hearing, Judge Woodlock ordered the AGO to provide information about how she intends to conduct the rulemaking process for regulations associated with the Data Law. The parties were also ordered to submit detailed explanations for why certain testimony and evidence submitted at trial should be redacted and kept under seal. Finally, the parties were ordered to file supplemental proposed findings of fact and conclusions of law. At the commencement of the case, the parties entered into a stipulation that the AGO would not seek to enforce the law until July 30, 2021. Judge Woodlock acknowledged that he is under a tight timeline to decide some very difficult issues.
