Alarm Detection Systems, Incor v. Orland Fire Protection Distri
929 F.3d 865
| 7th Cir. | 2019Background
- Villages of Orland Park and Orland Hills enacted ordinances (2014–15) requiring commercial fire alarms to use an RSS (direct-connect) model sending signals to the local dispatch (Orland Fire).
- Orland Fire had an exclusive contract with Tyco Integrated Security to supply dispatch receiving equipment and account transmitters; Tyco services nearly all ~650 accounts and shares monitoring fees with Orland Fire.
- Alarm Detection Systems, Inc. (ADS), a competitor offering CSS (central-supervising-station) services at lower monthly rates, sued Orland Fire, Tyco, and Du-Comm alleging violations of the Illinois Fire Protection District Act, the Sherman Act (§§ 1 & 2), and the Fourteenth Amendment (substantive due process).
- ADS conceded the Villages’ ordinances themselves were lawful and did not sue the Villages; ADS claimed the practical effect of the ordinances and Orland Fire’s exclusive deal excluded it from the market.
- District court dismissed District Act claims at summary judgment and, after a bench trial, rejected ADS’s Sherman Act and Fourteenth Amendment claims; the Seventh Circuit affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Illinois Fire Protection District Act implies a private right of action for ADS | ADS: statute should permit private enforcement against fire districts that violate NFPA/act-based duties | Defendants: Act protects public safety functions, not competitive interests; no express right; Illinois law disfavors implying private remedy here | No implied private right of action under the District Act for ADS |
| Whether Orland Fire/Tyco violated § 1 of the Sherman Act (concerted action) | ADS: exclusivity and practical effect of ordinances amount to anticompetitive concerted action excluding competitors | Defendants: the Villages’ ordinances mandated the RSS scheme; exclusivity flowed from government command (unilateral gov’t action), so no private agreement under § 1 | § 1 claim fails under Fisher; the exclusion was the logical result of government-imposed RSS model |
| Whether Orland Fire/Tyco violated § 2 of the Sherman Act (monopolization/exclusion) | ADS: exclusive dealing amounts to willful anticompetitive conduct to monopolize the market | Defendants: exclusivity was compelled/required by the ordinances, not willful anticompetitive conduct | § 2 claim fails for same Fisher-based rationale; exclusive deal was effectively mandated, not willful monopolization |
| Whether Orland Fire’s conduct violated substantive due process | ADS: denying ADS use of automatic retransmission or frequency-sharing alternatives was arbitrary and irrational | Defendants: Orland Fire acted pursuant to lawful ordinances and rational safety-based goals; exclusivity was a reasonable implementation choice | Due process claim fails; rational-basis review satisfied because actions were rationally related to legitimate public-safety objectives |
Key Cases Cited
- ADT Sec. Servs., Inc. v. Lisle-Woodridge Fire Prot. Dist., 672 F.3d 492 (7th Cir. 2012) (addressed permissibility of RSS model under NFPA and limits on district-imposed equipment mandates)
- ADT Sec. Servs., Inc. v. Lisle-Woodridge Fire Prot. Dist., 724 F.3d 854 (7th Cir. 2013) (further factfinding confirmed district’s scheme violated NFPA by routing through intermediary)
- Fisher v. City of Berkeley, 475 U.S. 260 (U.S. 1986) (unilateral government action that coerces market outcomes does not give rise to § 1 Sherman Act liability; distinguishes "hybrid" restraints)
- Pacific Bell Telephone Co. v. Linkline Communications, 555 U.S. 438 (U.S. 2009) (antitrust law generally disfavors imposing duties to deal or force rivals to share facilities)
- Verizon Communications Inc. v. Law Offices of Curtis V. Trinko, 540 U.S. 398 (U.S. 2004) (limits on antitrust duties to deal; monopolization claims require specific kinds of willful misconduct)
- 324 Liquor Corp. v. Duffy, 479 U.S. 335 (U.S. 1987) (discusses hybrid restraints and government/ private actor interplay)