ADS, village settle lawsuit

Private companies can now offer fire alarm monitoring services in Algonquin, Ill. after village agrees to end its monopoly of the service
 - 
Wednesday, May 7, 2014

DES PLAINES, Ill.—The village of Algonquin recently agreed to settle a lawsuit in which Alarm Detection Systems accused the village of establishing an “illegal monopoly” on fire alarm monitoring.

“This is very good news,” Kevin Lehan, executive director of the Illinois Electronic Security Association, based here, told Security Systems News, regarding the April 17 court settlement. “It opens up the market for any alarm contractor to come and bid” the job for commercial fire alarm subscribers, he said.

According to news reports, more than 400 commercial businesses and multifamily units in the community that had been served by the village’s wireless network now have to find a private company that can monitor their fire alarms.

ADS, based in Aurora, Ill., filed the federal lawsuit late last year against the village and the Algonquin-Lake in the Hills Fire Protection District.

ADS said the village had established an “illegal monopoly” that shut out ADS and other private companies from providing fire monitoring to commercial customers there.

The lawsuit came after the village on Dec. 1 took over the wireless radio network fire alarm system previously owned and operated by the fire district. The fire district couldn’t operate the system any longer because of a U.S. Court of Appeals for the Seventh Circuit decision last summer that said such public entities couldn’t be in the fire monitoring business. However, because the village itself is a municipality and not a fire district, it maintained the ruling did not apply to it. The village passed an ordinance requiring commercial businesses to contract only with the village for fire monitoring.

The village of Algonquin still believes it is legally correct but has decided not to pursue the matter in court, according to a statement provided by Kelly Cahill, attorney for the village, to Security Systems News.

“The village of Algonquin negotiated terms with ADS to end the litigation.  While the village disagrees with the allegations made by ADS and feels it has clear statutory authority to require commercial properties to directly connect to the village wireless alarm monitoring system, it made a business decision not to litigate the issue,” the statement said.

But Lehan noted that in the settlement—in which the village agreed to rescind the ordinance mandating that commercial businesses connect with village’s network—the village and the fire district agreed to each pay ADS $25,000. And he said the industry feels “we’re on strong legal grounds” because of the Seventh Circuit court ruling.

Lehan said commercial businesses will benefit from the Algonquin market opening up, because it’s likely they will get better monthly deals from private companies than they did with the village, which charged a fixed alarm monitoring fee. “Basically it’s a brand new open market and when people compete for business you’re going to get a much better price point,” he said.

In another positive development for the industry in Illinois, proposed state legislation that would have given public fire districts sole control over fire alarm monitoring never made it out of committee, Lehan told SSN. He said in late April that he expected that the bill would die “a peaceful death.”

IESA and other business groups lobbied hard against the measure, which IESA described as a “job-killing, monopoly-creating measure,” crafted in reaction to the federal appeals court decision regarding fire monitoring.