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Judge orders defendants to pay $2.13M in attorneys fees in case over suburban fire district's attempt to monopolize alarm industry

By Jonathan Bilyk | Mar 2, 2015

Attorneys representing four fire alarm and security monitoring companies, including Aurora-based Alarm Detection Systems Inc., last month won yet another round against a suburban fire protection district, securing more than $2 million in attorney fees stemming from their five-year-long legal battle over the district’s attempts to monopolize the fire alarm monitoring business within the district’s communities.

Senior U.S. District Judge Milton I. Shadur on Feb. 17 ruled in favor of the alarm companies, ordering the Lisle-Woodridge Fire Protection District and its contractor, Chicago Metropolitan Fire Prevention Co., to pay a combined $2.13 million to the alarm companies to compensate them for the attorneys' work in the federal case.

The judge ordered the Lisle-Woodridge district to pay about $1.7 million of the total award, with the remainder coming from Chicago Metropolitan.

The alarm companies were represented in the case by Dykema Gossett PLLC, a national law firm based in Detroit, with offices in 11 other cities, including Chicago and Lisle.

The ruling caps litigation swirling in Chicago’s federal court since 2009 that challenged an ordinance enacted by the Lisle-Woodridge district in an attempt to centralize fire alarm monitoring services under the district's control and its chosen vendor.

The ordinance declared all previous contracts between business and property owners and their selected private alarm companies “null and void.”

The four local alarm companies, as well as national alarm vendor ADT, sued in Chicago's federal court, arguing the ordinance violated both federal and state law.

The court agreed, finding the district had violated Illinois law by attempting to enter the alarm monitoring business. Judges slapped on and upheld an appeal a permanent injunction, barring the district from continuing in what Shadur called “a scheme to increase (the) district's revenue and set up an alarm-monitoring monopoly.”

After reaching a settlement agreement for damages with ADT, the remaining alarm companies and the district continued to litigate over damages, until the district offered up “the modest maximum amount to which (the) alarm companies would be entitled had they prevailed,” according to the opinion.

The four local companies, however, continued to struggle to reach an agreement with the district and Chicago Metropolitan over legal fees, prompting the companies to eventually sue again to ask the court to order the fee award.

In largely backing the alarm companies’ request, Shadur said he “devoutly wished” this opinion would be his last in the “tortuous history of the proceedings” in the case.

The judge expressed frustration with the district’s attempts to avoid paying, by arguing, among other claims, over the degree to which the alarm companies had “prevailed” and  whether it was obligated to pay the alarm companies’ attorneys for work performed on the federal and constitutional law violations the alarm companies had alleged, but for which the court had not ruled on.

Chiding the district’s attorneys for “dragging” the matter out, Shadur said the district effectively squandered its opportunity to challenge the fee requests from the alarm companies’ attorneys.

“This court can scarcely fault (the) alarm companies for refusing to expend further time playing defendants' game,” the judge said. “They wasted that opportunity in a misguided attempt to avoid the greater part of their obvious and inevitable liability for (the) alarm companies' attorney's fees.”

However, Shadur still declined to award the alarm companies the full amount they had demanded. He reduced the award by 10 percent, as he scolded the alarm companies for also extending the proceedings in an apparent attempt “to impact other litigation in other courts that have dealt with or are likely to deal with substantially similar issues and litigants or, alternatively, to influence other governmental bodies in their interaction with alarm companies.”

“It is clear that (the) alarm companies' interest in such collateral goals resulted in same overly contentious behavior that unnecessarily prolonged the proceedings before this court,” the judge wrote. “So while defendants certainly bear the lion's share of the blame for the breakdowns in cooperation that have marked this case, alarm companies' unyielding stance unjustifiably expanded this litigation, as well.”

In a statement released following the decision, Dykema Senior Counsel Bruce Goldsmith said the win puts “the cherry on top” of the firm’s victories in the case.

“But our work is not done,” Goldsmith said. “While many fire protection districts exited the alarm monitoring business after the successful appeals, litigation continues on concerning whether the manner of the exits was appropriate.

“I am eager to see what becomes of these cases.”

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