Ruling in Illinois fire alarm monitoring case ‘positive’ for industry

But decision in lawsuit brought by ADT over public entities monopolizing fire alarm monitoring will be appealed
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Wednesday, August 15, 2012

ARLINGTON HEIGHTS, Ill.—The latest decision in a lawsuit brought by ADT and other alarm companies over public entities taking over fire alarm monitoring in the state contains “a lot of positive things for the alarm industry,” according to the executive director of the Illinois Electronic Security Association (IESA).

“I would sum it up by saying that this was a great step forward for licensed alarm contractors in the state as well as the fire services,” Kevin Lehan told Security Systems News. “I know that they had been waiting for this ruling, as well as our industry has, and the ultimate winners are going to be the consumers.”

Among key provisions of the modified permanent injunction order issued in federal court last week by Judge Milton Shadur are ones that say the public Lisle-Woodridge Fire District can’t require private businesses to contract only with the district for fire alarm monitoring, and that it can’t ban the businesses from contracting with private central stations that meet approved codes and standards.

However, Lisle-Woodridge is seeking a stay on the injunction while it appeals it. The district argues the decision violates an earlier appeals court ruling and is overbroad.

The 32-page order is quite complex. In fact, at an IESA meeting on Sept. 13, the organization’s legal counsel is slated to hold an hourlong session to clarify the decision and its potential impact on the alarm industry. IESA, which is based here, is inviting members and non-members to attend.

But a crucial element of the Aug. 7 ruling in the case—in which ADT Security Services and other companies sued the Lisle-Woodridge Fire District after it adopted an ordinance in 2009 putting itself solely in charge of fire monitoring in the district—is a provision that says the “district shall cease and desist from any activities related to the fire alarm monitoring business as set out in the ordinance.”

The Illinois case has been watched by the alarm industry nationwide because it could carry implications for other states.

The Lisle-Woodridge Fire District said the reason it needed to control fire alarm monitoring was because that arrangement was safer. The industry disputes that argument, and contends that financially strapped public entities just want to displace private companies to collect monitoring fees for public coffers.

The lawsuit was brought after the fire district invalidated contracts that ADT and the other companies had with commercial and multi-residential customers, and required those customers to contract only with the district for fire alarm monitoring via a wireless radio network implemented by a private vendor with whom the district had contracted.

But the judge has now ruled that the district can’t require commercial entities to contract only with the district and can’t bar them from contracting with NFPA code-compliant central stations, such as UL-listed central stations. Also, the judge said, the district can’t charge any commercial entities for fire alarm monitoring services or any other fire protection services.

The fire district had appealed a permanent injunction issued last summer by Shadur. The 7th U.S. Circuit Court of Appeals earlier this year affirmed part of that injunction and reversed some of it. This modified permanent injunction by Shadur comes as the result of that appeals court decision.

Sarah Cohn, director of media relations for ADT North America Residential/Small Business, told SSN, “As a matter of policy, we don’t discuss matters in litigation.”

The fire district has until Sept. 6 to appeal the latest decision, according to the IESA. Jim French, public information officer for the district, told SSN that he couldn’t comment because the district is “in the middle of federal litigation.” However, the district has filed court papers seeking a stay of the injunction, indicating it plans to appeal the case. The district argues that it is likely to win on appeal and says the injunction should be stayed "because it harms the public interest."

The industry believes otherwise. Lehan said the judge urged the parties in the suit to work with Lisle-Woodridge to minimize dispatch times, which Lehan said the industry stands ready to do.

“I think it’s time that public and private industry move forward together to further increase life safety for those in Lisle-Woodridge as well as everyone else throughout the state,” he said. “We can put in best practices that will minimize false alarms, minimize dispatch times and increase public safety, and that’s the goal of our industry.”

If the ruling stands, how will it impact other Illinois communities taking over fire alarm monitoring? “I can’t say for sure this ends the practice across the state,” Lehan said.

For one thing, some of those taking control of fire alarm monitoring are municipalities, which contend they have “home rule” authority under state law that fire protection districts lack. However, Lehan says the judge’s ruling would "give us legal precedence” in fighting cases of municipalities monopolizing fire alarm monitoring. And he praised the judge’s requirement that municipal monitoring facilities must meet NFPA 72 standards, which central stations have to comply with.

However, the district contends the judge erred in requiring it to adopt the latest version of NFPA, which currently is the 2010 version. The district says it has adopted the 2002 edition of NFPA, which it says still is valid.