Fire Alarm Monopoly in Illinois Can’t Stand

CHICAGO (CN) - A federal judge properly kept an Illinois fire district from replacing the private market in commercial alarm systems with a less safe monopoly system, the 7th Circuit ruled.

In 2009, the Lisle-Woodridge Fire Protection District passed an ordinance under which it took over all fire-alarm monitoring for businesses in the district, shutting down the private market "by substituting for it a less safe and less reliable system operated by just one chosen vendor," DuPage Public Safety Communications or Du-Comm, according to the ruling.

Five private fire alarm companies, led by ADT Security Services, claimed that the ordinance overstepped the district's powers and created an illegal monopoly.

U.S. District Judge Milton Shadur granted the companies partial summary judgment and permanently enjoined the ordinance in 2011, but the 7th Circuit partially reversed in its first brush with the case last year. That February 2012 ruling invalidated only the ordinance's monopoly clause.

The District Court then held a four-day evidentiary hearing and issued a revised permanent injunction, which the federal appeals court upheld Wednesday.

"We find that the major elements of the injunction - shutting down the District's Station 3 and permitting private Central Stations to receive and transmit alarm signals - were well within the district court's discretion," Judge David Hamilton wrote for a three-judge panel. "Commercial properties in the district must have some form of fire alarm monitoring, but the district's plans and requirements for such services are beyond the district's legal authority, so it was appropriate for the district court to require the district to permit private alarm companies to provide that essential service."

In addition, the lengthy evidentiary hearing discovered that the District's alarm system is "less reliable and more dangerous than the private alarm companies' systems," the 50-page opinion states.

"Testimony at the hearing revealed much higher out-of service rates with the district's monitoring," Hamilton added. "Bonifas testified that he analyzed hundreds of pages of unrestored signals and out-of-service reports from Du-Comm. He found that once the district's system became operational, over 12 percent of accounts were out of service at any point in time."

Witnesses also testified that Station 3 does not meet Code standards, leaving the private central stations as the only safe means of transmitting alarm systems.

"The injunction is forceful, but given the district's and Chicago Metro's history of recalcitrance throughout this litigation, the District Court was justified in taking strong measures," Hamilton concluded.

Subscribe to Closing Arguments

Sign up for new weekly newsletter Closing Arguments to get the latest about ongoing trials, major litigation and hot cases and rulings in courthouses around the U.S. and the world.

Email *

Submit