ADS vs. village in lawsuit

After wins in court saying public fire districts in Illinois can’t monopolize monitoring, the industry is fighting a municipality attempting the same thing
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Tuesday, December 31, 2013

DES PLAINES, Ill.—The industry is fighting back against an Illinois municipality’s attempt to do an “end around” of a recent court ruling barring public fire districts from monopolizing fire monitoring in the state.

Alarm Detection Systems (ADS), a fire company based in Aurora, Ill., has filed a federal lawsuit against the village of Algonquin, Ill., charging the village with establishing an “illegal monopoly” that shuts out ADS and other private companies from providing fire monitoring to commercial customers there.

The village on Dec. 1 took over the wireless radio network fire alarm system previously owned and operated by the Algonquin-Lake in the Hills Fire Protection District. The fire district can’t operate the system any longer because of a federal appeals court ruling last summer. However, because the village itself is a municipality and not a fire district, it maintains the ruling does not apply to it, according to news reports.

The industry contests this interpretation.

Kevin Lehan, executive director of the Illinois Electronic Security Association (IESA), based here, told Security Systems News that the village’s action is an “end around.” He said, “What they’ve done in Algonquin-Lake in the Hills is that they’ve transferred ownership of the equipment [to the village] but they’re still mandating a monopoly and shutting off the private industry. This does not seem to comply in spirit or letter of the law. …  It’s a shame they won’t allow the private industry to work and that they believe they have a right to disregard what the federal court has recently and very clearly stated.”

Lehan was referring to a U.S. Court of Appeals for the Seventh Circuit decision in July that favored ADT, ADS and other private alarm companies.

Those companies in 2010 sued the Lisle-Woodridge Fire District, which had passed an ordinance mandating that commercial and multi-residential businesses must contract solely with the district for fire alarm monitoring.

But the Seventh Circuit decision last summer upheld an earlier decision by Judge Milton Shadur that said, among other things, that such a monopoly by the fire district was illegal.

Now, ADS has filed another lawsuit, this time against Algonquin Village, as well as the Algonquin-Lake in the Hills Fire Protection District and Chicago Metropolitan Fire Prevention Co. of Elmhurst, Ill., an alarm vendor that has worked with public fire districts to help them put their fire alarm monitoring networks in place.

In its Dec. 16 lawsuit, filed in U.S. District Court in Illinois, ADS, which operates one of the largest wireless transmission systems in the country, contends that the village has acquired from the fire district “an illegitimately attained monopoly with unfettered and uncontested access to hundreds of radio transmitters already installed on the walls of commercial accounts.”

The district said recently that it operates 441 radio transmitters, which are expected to generate more than $400,000 in revenue this fiscal year.

The industry has maintained that public entities want to control fire alarm monitoring for the revenue that it brings in. The fire districts have claimed their systems were safer, but the appeals court found that in the case of Lisle-Woodridge, that system was “more dangerous” and didn’t meet NFPA standards private companies must comply with.

Lehan said Algonquin has the same system as Lisle-Woodridge.

“This is an obvious attempt to test the waters to find any way they can to claim this revenue as their own,” Lehan said of Algonquin. “You would think … the leaders of public safety there … would want the safest system possible and not worry about revenue, but that doesn't seem to be the case. It’s a shame.”

As of late December, the village of Algonquin had not received notice of ADS’ lawsuit and thus was unable to comment, Michael Kumbera, Assistant to the village manager, told SSN.

Lehan also pointed to another “end around” a fire district had used since the summer appeals court ruling: The Darien-Woodridge Fire Protection District sold its already-installed radio alarm monitoring equipment to just one alarm company vendor that it already has a relationship with—Chicago Metro—instead of going through a competitive bid process that would have allowed other alarm companies to bid on the equipment. 

Lehan said that gives Chicago Metro an unfair advantage and stifles competition. A spokesman for the district denied that contention.