Orland fire distict didn't violate alarm company's rights by inking exclusive deal with rival vendor: Judge

By Jonathan Bilyk | Aug 3, 2018

A federal judge has ruled a southwest suburban fire protection district didn’t violate the rights of a company that installs and monitors commercial fire alarms by first lobbying the villages of Orland Park and Orland Hills to require the installation of a certain kind of fire alarm system, and then inking a contract with a competing company to provide the equipment needed for those alarm systems, effectively closing off their district to competitors.

On Aug. 2, U.S. District Judge Thomas Durkin sided with the Orland Fire Protection District and fire alarm vendor Tyco Integrated Security LLC in their years-long dispute with alarm company Alarm Detection Systems Inc. over the district’s commercial fire alarm program.

“…Both the Villages and Orland FPD have statutory authority to require a direct connect fire alarm monitoring,” Judge Durkin wrote. “Further, Orland FPD’s power to contract under the District Act necessarily implies the authority to enter into exclusive contracts. Moreover, although a governmental entity’s decision to enter into an exclusive contract ‘inherently involves a kind of discrimination,’ it does not violate the Equal Protection Clause when government actors merely exercise their discretion.

“Thus, the mere fact that Orland FPD entered into an agreement with one fire alarm services company rather than another does not demonstrate a violation of the Equal Protection Clause.”

James J. Roche   James J. Roche & Associates

The action underlying the case stretches back to 2006, when the Orland FPD enacted rules requiring businesses in the district to install alarms compatible with the district’s desired system, which directly connected the alarms to the fire protection district’s central hub. According to court documents, the Orland FPD said such a direct connect system was “safer and more efficient.”

However, as other communities also took that step, a federal appeals court in Chicago struck against similar arrangements, “questioning the authority of fire protection districts to engage in the business of fire alarm monitoring and transmission,” according to Durkin’s opinion.

In response, Durkin noted, Tyco urged the Orland FPD to rescind its ordinance. Instead, Orland FPD officials “lobbied” the village boards of Orland Park and Orland Hills – whose territory amounts to 98 percent of the geography covered by the Orland FPD – to enact ordinances “mandating a direct connect system for fire alarms in the Villages.”

With those ordinances in place, the Orland FPD then contracted with Tyco to serve as its vendor for the direct connect alarm program.

ADS then filed suit in 2014 to challenge the arrangement, asserting it “illegally precludes Alarm Detection from competing in the fire alarm monitoring business in Orland FPD.”

While the program doesn’t directly exclude ADS and other competitors from the Orland FPD, the judge noted the program would require ADS to purchase equipment from Tyco to operate its alarms, and then rely on Tyco to transmit its alarm signals to the Orland FPD 911 dispatch center. ADS said the arrangement makes them unable to compete for business in the Orland FPD and establishes a monopoly for Tyco, violating federal antitrust laws and the rights of competitors like ADS to equal protection under the 14th Amendment.

Judge Durkin initially dismissed the lawsuit, siding with Orland FPD’s assertions ADS filed its lawsuit outside the statute of limitations.

However, in the Aug. 2 ruling, Durkin granted ADS’ request to reconsider that earlier decision, and now agreed the lawsuit was timely.

But while it now fell within time limits, Durkin said the lawsuit still fell short. In this case, Orland FPD is not forcing its residents to pay fees for alarm services. Rather, the district has instead contracted with a vendor – in this case, Tyco – to provide desired services for the district, to the exclusion of other possible competitors.

Durkin entered judgment in favor of Orland FPD, and against ADS.

Orland FPD is represented in the action by attorneys James J. Roche, Brittany E. Hartwig, LeeAnn M. Crow and Megan S. Roche, of the firm of James J. Roche & Associates, of Chicago.

Tyco is represented by attorneys A. Christopher Young, Barbara T. Sicalides, Erica H. Dressler and Robert L. Hickok, of the firm of Pepper Hamilton LLP, of Philadelphia and Mark T. Deming, of Polsinelli P.C., of Chicago. 

ADS is represented by attorneys Bruce L. Goldsmith, Christina C. Brunty, David J. Bressler, Jonathan S. Feld, Melanie J. Chico, Michael F. Derksen, and Molly E. Thompson , of the firm of Dykema Gossett PLLC, with offices in Lisle and Chicago.

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Organizations in this Story

Alarm Detection Systems, Inc. Dykema Gossett PLLC James J Roche & Associates Orland Fire Protection District Pepper Hamilton LLP Polsinelli Tyco Integrated Security LLC U.S. District Court for the Northern District of Illinois Village of Orland Hills Village of Orland Park

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