CHICAGO (CN) - An Illinois town's exclusive contract with its fire protection district unconstitutionally bars private competition and creates a government monopoly on fire alarm service, a private company claims in a federal antitrust complaint.
Alarm Detection Systems (ADS) sued Algonquin/Lake in the Hills Fire Protection District, the Village of Algonquin, and Chicago Metropolitan Fire Prevention Inc.
Algonquin and Lake in the Hills, each with a population of about 30,000, are north Elgin, far-west exurbs of Chicago.
ADS installs, maintains and monitors fire alarms.
"For a number of years, the Algonquin/Lake in the Hills Fire Protection District (the 'District') operated the business in competition with private alarm companies like ADS," the complaint states.
"To gain maximum market share for its business, the district passed an ordinance ('2010 Ordinance') that eliminated all private competition for fire alarm monitoring, making the district the sole provider of the business and charging district residents a monthly fee for this service that was non-competitive."
That year, ADS says, it challenged that very practice in the Lisle-Woodridge fire district, and the 7th Circuit eventually affirmed that an Illinois fire district cannot create a government monopoly.
Lisle and Woodridge, with a combined population roughly the same as Algonquin and Lake in the Hills, are south of Elgin. Their fire district got out of the alarm business after the 7th Circuit ruling, ADS says.
However, "Instead of divesting itself from the business, the [defendant] district has attempted to preserve its governmental fire alarm monitoring operating and monopoly by entering into an intergovernmental agreement with the Village of Algonquin, one of the municipalities within the borders of the district. The purpose of this agreement is to allow the village to take over the business within the district territory," the lawsuit states.
"This last ditch effort by the defendants to preserve an illegal operation and monopoly, along with the ongoing exclusion of the private sector, including ADS, from freely competing for the business, are at the heart of this complaint."
ADS want the district's agreement with the village enjoined, and declaratory judgment that the district and municipality deprived it of its constitutional right to conduct business without government interference.
It is represented by Bruce Goldsmith with Dykema Gossett in Lisle.
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