Alarm Detection Sys., Inc. v. Orland Fire Prot. Dist.

• Decision Date: 08 September 2015
• Docket Number: No. 14 C 876,14 C 876
• Citation: 129 F.Supp.3d 614
• Parties: Alarm Detection Systems, Inc., Plaintiff, v. Orland Fire Protection District; Tyco Integrated Security, LLC; Cross Points, Inc.; and Chicago Metropolitan Fire Prevention Company, Defendants.
• Court: U.S. District Court — Northern District of Illinois

129 F.Supp.3d 614

Alarm Detection Systems, Inc., Plaintiff,

v.Orland Fire Protection District; Tyco Integrated Security, LLC; Cross Points, Inc.; and Chicago Metropolitan Fire Prevention Company, Defendants.

No. 14 C 876

United States District Court, N.D. Illinois, Eastern Division.

Signed September 8, 2015

Bruce Lee Goldsmith, David Joel Bressler, Dykema Gossett Rooks Pitts PLLC, Lisle, IL, Kara Bledsoe Murphy, Michelle Kramer Schindler, Molly E. Thompson, Dykema Gossett PLLC, Chicago, IL, for Plaintiff.

Ericka J. Thomas, Stephen H. Dinolfo, W. Anthony Andrews, Ottosen Britz Kelly Cooper Gilbert & Dinolfo, Ltd., Naperville, IL, James J. Roche, Leeann Marie Crow, Megan Shea Roche, James J. Roche & Associates, John A. Leja, Polsinelli Shughart PC, Mark Thomas Deming, Polsinelli PC, Christopher James Murdoch, Holland & Knight LLC, Simon B. Auerbach, Holland and Knight, LLP, Chicago, IL, A. Christopher Young, Barbara T. Sicalides, Robert L. Hickok, Pepper Hamilton LLP, Philadelphia, PA, Kenneth B. Drost, Drost, Gilbert, Andrew & Apicella LLC, Palatine, IL, for Defendants.

MEMORANDUM OPINION AND ORDER

Honorable Thomas M. Durkin, United States District Judge

Alarm Detection Systems, Inc. is a company that provides fire alarm services to commercial and multi-unit residential buildings. See R. 76 ¶¶ 1, 17. Alarm Detection alleges that three municipal fire protection districts in Illinois—Bloomingdale, Lemont, and Orland—exceeded their authority under Illinois's Fire Protection District Act, 70 ILCS 705 (the "District Act"), when they contracted with three fire alarm services companies—Tyco Integrated Security, LLC ("Tyco); Cross Points, Inc. ("Cross Points"); and Chicago Metropolitan Fire Prevention Company ("Chicago Metro")—with respect to provision of certain fire alarm services and equipment. See R. 76 (Counts XII–XIV). Alarm Detection also alleges that this conduct constitutes anticompetitive business practices and a conspiracy to restrain trade in violation of the Sherman and Clayton Acts, see id. (Counts I–VIII), and violates the Equal Protection and Due Process Clauses of the Fourteenth Amendment. See id. (Counts IX–XI). Alarm Detection filed a motion for a temporary restraining order on March 28, 2014, R. 50, which the Court denied on April 14, 2014. See R. 71; R. 72. Subsequently, Defendants filed motions to dismiss for failure to state a claim. See R. 86; R. 91; R. 92; R. 95; R. 97; R. 99. Alarm Detection settled its claims with Bloomingdale and Lemont, see R. 177; R. 211, but their actions remain relevant to determining the liability of the remaining defendants—Chicago Metro, Cross Points, Tyco, and Orland—and the remaining defendants have adopted their arguments in their briefs. For the following reasons, Chicago Metro and Cross Points's motions to dismiss are granted, and Orland and Tyco's motions are granted in part and denied in part.

Legal Standard

A Rule 12(b)(6) motion challenges the sufficiency of the complaint. See, e.g.,Hallinan v. Fraternal Order of Police of Chi. Lodge No. 7, 570 F.3d 811, 820 (7th Cir.2009). A complaint must provide "a short and plain statement of the claim showing that the pleader is entitled to relief," Fed.R.Civ.P. 8(a)(2), sufficient to provide defendant with "fair notice" of the claim and the basis for it. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). This standard "demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation." Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). While "detailed factual allegations" are not required, "labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Twombly, 550 U.S. at 555, 127 S.Ct. 1955. The complaint must "contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ " Iqbal, 556 U.S. at 678, 129 S.Ct. 1937 (quoting Twombly , 550 U.S. at 570, 127 S.Ct. 1955 ). " ‘A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.’ " Mann v. Vogel, 707 F.3d 872, 877 (7th Cir.2013) (quoting Iqbal , 556 U.S. at 678, 129 S.Ct. 1937 ). In applying this standard, the Court accepts all well-pleaded facts as true and draws all reasonable inferences in favor of the non-moving party. Mann , 707 F.3d at 877.

Background

I. Fire Protection Regulation

The District Act "allows two or more local governments to consolidate fire protection and related services by creating a fire protection district." ADT Sec. Servs., Inc. v. Lisle–Woodridge Fire Prot. Dist., 672 F.3d 492, 495 (7th Cir.2012) (citing 70 ILCS 705/1 ). "Such districts operate with their own elected boards that exercise the powers spelled out in the [District] Act." ADT Sec., 672 F.3d at 495. "These include the powers to buy or lease firefighting equipment, employ firefighters, and impose civil fines for setting false fire alarms, 70 ILCS 705/6, as well as the authority to tax district residents to pay for the fire protection services in the district. 70 ILCS 705/14." ADT Sec., 672 F.3d at 495.

Section 11 of the District Act also gives fire protection districts like Bloomingdale, Lemont, and Orland "the express power to adopt and enforce fire prevention codes and standards parallel to national standards." 70 ILCS 705/11. Pursuant to Section 11, Bloomingdale, Lemont, and Orland have adopted the National Fire Protection Association's National Fire Alarm and Signaling Code ("NFPA Standards"). See R. 76 ¶ 33. "The NFPA Standards are nationally recognized standards ... [that] set forth standards for, inter alia, fire alarm signal transmission equipment and fire monitoring." Id. ¶ 31.

Fire alarm signal transmission and monitoring is a service that is often provided by private alarm contractors. Seeid. ¶ 26. Alarm Detection and defendants Tyco, Cross Points, and Chicago Metro are all licensed private alarm contractors that provide such services to commercial and residential customers.¹ Id. ¶¶ 1, 21–23, 28.

"A fire alarm system in a [commercial or multi-unit residential building] generally includes an alarm panel, smoke and heat detectors, and a transmission device that sends [fire alarm] signals to either a central station or remote supervising station." Id. ¶ 34; see alsoADT Sec. Servs., Inc. v. Lisle–Woodridge Fire Prot. Dist., 724 F.3d 854, 860 (7th Cir.2013) ("The [NFPA Standards] contemplate[ ] the use of either a Remote Supervising Station system or a Central Station system."). Private alarm contractors customarily design their alarm systems to send alarm signals to a central station. See R. 76 ¶¶ 35–36. When a private alarm contractor uses a central station to receive alarm signals from a building, the "[c]entral stations retransmit [the] alarm signals to the Public Safety Answering Points (911 centers or ‘PSAP’) which dispatch emergency personnel and equipment." Id. ¶ 37. Alternatively, fire protection districts can mandate that alarm signals skip the middle step of a central station and be sent directly to a remote supervising station, "such as a municipal dispatch board." ADT Sec., 724 F.3d at 859. The DuPage Public Safety Communications Center (known as "DuComm") is the PSAP dispatcher for Bloomingdale and Lemont. R. 76 ¶¶ 56, 108. Orland has its own PSAP dispatcher in its Public Safety Department's Communications Center (the "Orland Communications Center"). Id. ¶¶ 132–33.

II. Prior Ordinances

Bloomingdale, Lemont, and Orland each passed ordinances requiring that fire alarm signals be sent directly to their remote supervising stations. In 2005, Bloomingdale enacted Ordinance 05–229 "requir[ing] all [commercial or multi-unit residential buildings] to obtain fire alarm monitoring from Bloomingdale by means of wireless transmitters owned by and leased from Bloomingdale that could only be monitored by Bloomingdale." R. 76 ¶ 61. "Bloomingdale's wireless network involved the transmission of all ... signals to receiving equipment at [Bloomingdale's] Fire Station 21 and the retransmission of such signals to DuComm." Id. ¶ 62. Bloomindale's ordinance also provided that "Chicago Metro shall be the only authorized installer and repair service." Id. ¶ 63. In enforcing its ordinance, Bloomingdale also required all commercial and multi-unit residential buildings "to enter into subscriber agreements ... that obligated [the subscriber] to pay a monthly fee." Id. ¶ 67. Alarm Detection alleges that it lost its accounts in Bloomingdale due to the 2005 ordinance and agreement with Chicago Metro. Id. ¶¶ 64–65.

In 2002, Lemont enacted Ordinance 02–03 "mandating the use of the Lemont-owned wireless network." Id. ¶ 104. The Lemont ordinance "required [commercial or multi-unit residential buildings] using wireless transmitters [to] send all alarm ... signals directly to the communications center of Lemont via Lemont's wireless radio network. The signals would then be retransmitted to DuComm." Id. ¶ 108. Additionally, Lemont signed an agreement with Cross Points to be the exclusive servicer of Lemont's network. Id. ¶¶ 99, 105. Lemont required commercial and multi-unit residential buildings "to sign new [s]ubscriber [a]greements," id. ¶ 107, and "to contract with Lemont and pay [a fee], which Lemont and Cross Points shared." Id. ¶ 110.

"In 2006, Orland adopted Ordinance 2006–003 ... which required that all fire alarm systems in [commercial and multi- unit residential buildings] be monitored by [Orland]." Id. ¶ 145. Alarm Detection alleges that Orland also signed an agreement with Tyco providing that "[o]nly Tyco [can] provide the transmission of alarm signals from [commercial and multi-unit residential buildings] to the Orland Communications Center." Id. ¶ 148. The express terms of the agreement itself—which Alarm Detection attached to its complaint—gives Tyco "the exclusive right to install, maintain, replace, upgrade and...