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

• Citation: 194 F.Supp.3d 706
• Decision Date: 07 July 2016
• Docket Number: No. 14 C 876,14 C 876
• Parties: ALARM DETECTION SYSTEMS, INC., Plaintiff, v. ORLAND FIRE PROTECTION DISTRICT; Tyco Integrated Security, LLC; and Dupage Public Safety Communications, Defendants.
• Court: U.S. District Court — Northern District of Illinois

194 F.Supp.3d 706

ALARM DETECTION SYSTEMS, INC., Plaintiff,

v.ORLAND FIRE PROTECTION DISTRICT; Tyco Integrated Security, LLC; and Dupage Public Safety Communications, Defendants.

No. 14 C 876

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

Signed July 7, 2016

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

James J. Roche, Leeann Marie Crow, Megan Shea Roche, James J. Roche and Associates, Mark Thomas Deming, Polsinelli PC, Chicago, IL, A. Christopher Young, Pepper Hamilton LLP, Philaldephia, PA, Barbara T. Sicalides, Robert L. Hickok, Pepper Hamilton LLP, Philadelphia, PA, Michael D. Bersani, Charles E. Hervas, Hervas, Condon & Bersani, P.C., Itasca, 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. 245 ¶¶ 1, 11. Alarm Detection alleges that Orland Fire Protection District ("Orland FPD"), Tyco Integrated Security, LLC ("Tyco"), and DuPage Public Safety Communications ("Du-Comm"), provide certain fire alarm services and equipment in violation of Illinois's Fire Protection District Act, 70 ILCS 705 (Counts XIII-XV), the Sherman and Clayton Acts (Counts I-IX), and the Equal Protection and Due Process Clauses of the Fourteenth Amendment (Counts X-XII). Alarm Detection also seeks relief against Defendants for unjust enrichment (Count XVI).

Alarm Detection filed a 14-count amended complaint on May 16, 2014. See R. 76. Orland FPD and Tyco (and other defendants no longer in the case) filed motions to dismiss. Alarm Detection also sought a preliminary injunction, and the parties had discovery relevant to that motion and in an attempt to settle the case. Based on that discovery Alarm Detection filed a motion for summary judgment on its claims for violation of Illinois's Fire Protection District Act, 70 ILCS 705 (the "District Act"). See R. 221. The Court granted Defendants' motions to dismiss 11 of the 14 counts in Alarm Detection's amended complaint, leaving three counts against Orland FPD and Tyco for violation of the District Act and Sections 1 and 2 of the Sherman Act. See R. 237 (Alarm Detection Sys., Inc. v. Orland Fire Prot. Dist. , 129 F.Supp.3d 614 (N.D.Ill.2015) ) (the "September 8 Order").

Alarm Detection has now filed a 16-count second amended complaint, re-pleading all of the claims against Orland FPD and Tyco from its prior complaint, plus two additional counts, and adding claims against Du-Comm. See R. 245. Alarm Detection also filed an amended motion for summary judgment on its District Act claims and its unjust enrichment claims to the extent they rely on violation of the District Act. See R. 246. The remaining defendants—Orland FPD, Tyco, and Du-Comm—filed cross-motions for summary judgment on the District Act and unjust enrichment claims, see R. 270; R. 278; R. 280, and motions to dismiss all the claims in the second amended complaint for failure to state a claim, see R. 268; R. 275; R. 276. For the following reasons, Defendants motions for summary judgment on the District Act claims (Counts XIII-XV, and the relevant parts of Count XVI) are granted, and Alarm Detection's motion for summary judgment on those claims is denied. Additionally, Defendants' motions to dismiss Alarm Detection's other claims are granted in part and denied in part as follows: the antitrust claims against Tyco and Du-Comm for their actions in the Bloomingdale Fire Protection District's territory (Counts I, IV, and VIII) are dismissed; the antitrust claims for a declaratory judgment that the agreement between Tyco and Lemont Fire Protection District is unlawful (contained within Counts II, V, and VII) are dismissed; the Fourteenth Amendment and unjust enrichment claims against Du-Comm and Tyco for their actions in the Bloomingdale Fire Protection District's territory (Count X and the relevant parts of Count XVI) are dismissed; the Fourteenth Amendment claim against Orland FPD and Tyco for their actions in the Orland FPD's territory (Count XII) is dismissed; the Fourteenth Amendment claim against Orland FPD and Tyco for their actions in the Lemont Fire Protection District's territory (Count XI) survives; the unjust enrichment claims against Orland FPD and Tyco for their actions in the Orland and Lemont territories (the relevant parts of Count XVI) survive; and the antitrust claims against Tyco and Orland FPD for their actions in the Orland and Lemont territories (Counts II, III, V, VI, VII, and IX) survive.

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.

By contrast, summary judgment is appropriate "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a) ; see also Celotex Corp. v. Catrett , 477 U.S. 317, 322–23, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). The Court considers the entire evidentiary record and must view all of the evidence and draw all reasonable inferences from that evidence in the light most favorable to the nonmovant. Ball v. Kotter , 723 F.3d 813, 821 (7th Cir.2013). To defeat summary judgment, a nonmovant must produce more than "a mere scintilla of evidence" and come forward with "specific facts showing that there is a genuine issue for trial." Harris N.A. v. Hershey , 711 F.3d 794, 798 (7th Cir.2013). Ultimately, summary judgment is warranted only if a reasonable jury could not return a verdict for the nonmovant. Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).

Analysis

In its September 8 Order, the Court included a detailed discussion of the relevant background facts and case law, which the Court will not repeat here. See R. 237 (Alarm Detection , 129 F.Supp.3d 614 ). The Court will address the new allegations Alarm Detection makes in its second amended complaint, as well as any other new facts appropriately considered on the motions now before the Court, in the course of the following analysis.

I. The District Act (Counts XIII, XIV, and XV)

Alarm Detection argues that the District Act does not authorize fire protection districts like Orland FPD, or other entities that act on their behalf like Tyco and Du-Comm, to engage in fire alarm "monitoring for fees." R. 247 at 2. Alarm Detection alleges that Du-Comm and Tyco illegally monitor fire alarms within the Bloomingdale Fire Protection District's territory in accordance with contracts Du-Comm and Tyco have with Bloomingdale FPD. Alarm Detection also alleges that Orland FPD and Tyco illegally monitor fire alarms within the Lemont Fire Protection District's territory in accordance with contracts Orland FPD and Tyco have with Lemont FPD. Finally, Alarm Detection alleges that Orland FPD and Tyco illegally monitor fire alarms within Orland FPD's territory.¹

In the September 8 Order, the Court held that Bloomingdale FPD and Lemont FPD had the authority under the District Act to assign subscriber agreements to Tyco, and for that reason dismissed Alarm Detection's claims for violation of the District Act from its first amended complaint. Unlike its first amended complaint, Alarm Detection's claims for violation of the District Act in its second amended complaint allege that Defendants violate the District Act by charging certain fees. It is unnecessary, however, for the Court to address whether Alarm Detection's substantive allegations state a claim for violation of the District Act because the Court agrees with the argument put forward by Orland FPD that the District Act does not provide a private alarm company like Alarm Detection a private right of action to challenge Defendants' authority to engage in fire alarm monitoring activities.

Orland FPD argues that Alarm Detection "lacks standing [to bring] its District Act claims because there is no private right of action under the Act." R. 271 at 10. As Orland FPD goes on to explain, however, this argument is not about constitutional standing under Article III, but contends that the "District Act does not expressly [or impliedly] grant [Alarm Detection] a right to judicial relief." Id. at 11; see HSBC Bank USA, N.A. v. Townsend , 793 F.3d 771, 796 (7th Cir.2015) ("To the extent the argument is framed in terms of prudential or statutory standing, the Supreme Court...