A federal court last week issued a modified permanent injunction against the Lisle-Woodridge Fire Protection District in Illinois, barring the district from prohibiting the transmission of fire alarm signals to NFPA-compliant central stations and ordering it to cease any activities related to the monitoring of fire alarms.
In September 2009, the district, which consists of the suburban Chicago towns of Lisle and Woodridge, passed an ordinance requiring all commercial alarm system owners in the area to terminate their existing monitoring contracts and switch to a system owned and operated by the district. The following summer, five private alarm companies including ADT, Alarm Detection Systems, D.M.C. Security Services, Illinois Alarm Services and SMG Security Systems, filed a lawsuit against the district alleging violations of state laws, as well as federal antitrust laws.
"There were many reasons for the lawsuit, the first being interference with contracts. That was a major thing," explained Kevin Lehan, executive director of the Illinois Electronic Security Association. "In our industry, in Illinois, we have what is called an evergreen contract, it automatically renews once the period of time comes up. Even if it was at the beginning of the contract, (the district) said that their contracts were null and void, no penalty, 'you just come to us and we’re going to monitor your alarm system.'"
The court initially entered a permanent injunction against the district in August 2011, but they appealed to the 7th U.S Circuit Court of Appeals, which issued an order staying the injunction. The case was later directed back to the U.S. District Court in Illinois where the modified permanent injunction order was issued last week.
The Lisle-Woodridge Fire Prevention District has been ordered by the district court to shut down its alarm board by Oct. 4. They have until Sept. 6 to appeal the permanent injunction.
Lisle-Woodridge Fire District Bureau Chief Jim French said that the district could not comment on the case at this time.
Lehan said he believes the impact of this injunction will be "far reaching," however, he said that people need to remember that there are still "two different animals" at play when it comes to municipal monitoring in Illinois – fire protection districts (which this ruling applied to) and home rule communities, which has greater leeway to set its own standards under state law.
With that being said, Lehan said that the injunction is still good news for alarm companies, as well as business owners in the Lisle and Woodridge communities.
"The impact for the business community is that they will again have a choice of service providers," he said. "In effect, what they did in Lisle-Woodridge is they created a monopoly, not just in Lisle-Woodridge, but in every one of those communities that have implemented (municipal monitoring ordinances), they’ve created a monopoly. And the impact of a monopoly is less service, higher costs and there’s not a damn thing you can do about it because there is no other provider in the industry. Well, now there’s going to be dozens of companies competing for that business in town. There’s going to be dozens of companies that are going to put together designs with the highest level of technology available to give them more choice and a higher level of protection than what they were getting. It’s like a brand new market, 300 new accounts that everyone is going to be trying to woo."