CHICAGO (CN) - An Illinois fire-protection district cannot monopolize the production of alarms that it requires for certain buildings, the 7th Circuit ruled.
In 2009, the Lisle-Woodridge Fire Protection District passed an ordinance requiring the installation of wireless reporting alarms in all commercial and multifamily buildings. A nerve-center station in the district would monitor the alarms. To provide the alarms and develop the system, the district contracted with privately operated Chicago Metropolitan Fire Prevention Co.
The district sent a letter to all affected customers announcing the new system and the associated monitoring fee of $66 per customer per month. "The most provocative part of the letter said: 'If you are under contract for monitoring with another vendor, our ordinance now supersedes those contracts and makes them null and void,'" according to the federal appeals court. "To the alarm companies already providing fire alarm monitoring services to these customers under long-term contracts, this was an invitation to file this lawsuit."
Five private alarm companies, led by ADT Security Services, sued the district in July 2010, bringing a host of claims under state law and federal antitrust laws. They also alleged violations of due process and equal protection under the U.S. Constitution.
Addressing only the state-law claims, U.S. District Judge Milton Shadur permanently enjoined the ordinance because he found that Illinois did not empower the district to require customer compliance with its ordinance.
In a partial stay of that decision three months ago, the 7th Circuit said the district could not require customers to use it and its vendor for fire-alarm equipment and services.
The court more fully rebuked the district's claimed authority to establish a monopoly on fire alarm equipment within its borders on Monday.
Local governments can consolidate fire-protection services and give these districts limited powers to manage their affairs under the Illinois Fire Protection District Act. The act does not grant home-rule powers to the districts, limiting the powers to those expressly granted by the statute.
"In Illinois, the 'only units of local government that may exercise home rule powers are counties and municipalities,'" Judge David Hamilton wrote for a three-judge panel. "Since 'a fire protection district is neither a county nor a municipality, it cannot have home rule powers.'"
"We conclude that those powers are not so broad as to enable the district to establish a monopoly over alarm transmitters and monitoring services, but they do authorize the district to require buildings to be equipped with wireless alarm signaling devices that communicated directly with the district's board," the 26-page opinion states.
The act instructs fire-protection districts to enact programs that comply with National Fire Protection Association standards.
"Neither the NFPA code not the [Illinois Fire Protection Act] even tacitly endorses so drastic a policy change as the establishment of a local governmental monopoly over fire alarm transmitter devices," Hamilton wrote. "In view of fire protection districts' limited powers, supplanting a competitive private market is far too significant a change to infer from statutory silence."
Because the ordinance's severability clause allows invalidation of the questionable provision without condemning the entirety of the legislation, the court only struck down the local monopoly portion.
Read the Top 8
Sign up for the Top 8, a roundup of the day's top stories delivered directly to your inbox Monday through Friday.