Deere & Company is seeking to settle a 2022 class action lawsuit alleging it violated antitrust laws by monopolizing the market for repair services for large agricultural equipment. The company would pay a $99 million settlement.
The settlement, pending approval by the United States District Court for the Northern District of Illinois, involves nearly 200,000 claimants. Plaintiff's counsel included testimony from Dr. Russel Lamb, Ph.D., that the damages for having to travel miles to one of the company’s authorized dealers in the country to assist with costly service errors in equipment should be between $190 to $387.3 million.
However, in the settlement proposal released on Monday, April 6th, plaintiff's counsel stated that the $99 million settlement would provide substantial monetary and injunctive relief. The court will monitor Deere & Company for the next ten years to ensure it provides repair services to claimants on fair and reasonable terms.
In a statement following the settlement announcement, Denver Caldwell, vice president, Aftermarket & Customer Support, said ‘We’re pleased that this resolution allows us to move forward and remain focused on what matters most – serving our customers.” The injunctive relief includes access to repair resources, including tools, manuals, and diagnostic software, in particular, the John Deere Operations Center™ PRO Service.
The amount of money available for the roughly 200,000 customers who qualify for compensation would be significantly less than the $99 million proposed in the settlement, however. Right-to-repair advocate Willie Cade, whose grandfather served on the Deere & Company board, said the settlement after attorney and other legal fees would amount to $79 million.
According to Cade, an average 500-acre farm would be awarded roughly $400 dollars, which is less than the amount it would cost for a single service visit to an authorized dealer located two hours away.“So it's a little under a dime per acre per year. [That’s] what John Deere is thinking is an appropriate settlement.” Cade said.
The settlement amount was also determined by the labor hours spent on the equipment. “So people spent money on parts and other such things, software, etc. There's no compensation based on that,” Cade said.
Cade also claims the PRO Service is still not adequate for farmers seeking repairs on John Deere equipment.
“It's less than what the dealers are provided, which is actually a violation of law,” Cade said. “But nevertheless, they're claiming they have not violated any law. And the problem that I have with this is if it's accepted by the judge, then John Deere can say, ‘Well, a judge has ruled that we have not violated any laws.’”
Cade said one part of the settlement was stunning to read, a section in Exhibit A of the lawsuit.
“Upon this agreement becoming final, any known or unknown, suspected or unsuspected, contingent or non-contingent claim that John Deere and interim co-lead counsel have agreed to release pursuant to Paragraph 23, whether or not concealed or hidden without regard to subsequent discovery or existence as such different or additional facts. In other words, whether or not concealed and hidden, so John Deere could conceal and purposely conceal and purposely hide. This is page 10 of Exhibit A of the settlement.”
Cade said the claimants should offer feedback to the judge presiding over the case at an upcoming, not yet scheduled hearing, including the other costs and raising the settlement total. He also advises them to seek legal counsel on whether to accept it, since the agreement bars them from further legal action on this matter.
“I think this settlement clearly demonstrates the need for legislation at the state level and the national level. Because if John Deere is allowed to lie and misrepresent in court, then there needs to be clear laws that John Deere can be held accountable to,” Cade said.
At this time, the Iowa Ways and Means Committee passed a right-to-repair bill by a vote of 18-7. It still needs to pass the full chamber. In Illinois, an Agricultural Equipment Repair Bill of Rights Act was introduced last year, but has not moved in the House Rules Committee.
Separately, Deere & Company faces similar litigation by the Federal Trade Commission along with the Illinois and Minnesota Attorneys General, which is ongoing. The company is accused of violating antitrust laws.The FTC’s lawsuit, filed with the Illinois and Minnesota Attorneys General, alleges “unfair practices that have driven up equipment repair costs for farmers while also depriving farmers of the ability to make timely repairs on critical farming equipment, including tractors.”
Deere & Company, in a 3-page response, says the lawsuit is baseless.
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