ADT Security Services, Inc. v. Lisle-Woodridge Fire Protection District

In the
United States Court of Appeals
For the Seventh Circuit
No. 11-2905
ADT S ECURITY S ERVICES, INC., et al.,
Plaintiffs-Appellees,
v.
L ISLE-W OODRIDGE F IRE P ROTECTION D ISTRICT,
Defendant-Appellant.
Appeal from the United States District Court
for the Northern District of Illinois, Eastern Division.
No. 1:10-cv-04382—Milton I. Shadur, Judge.
A RGUED N OVEMBER 17, 2011—D ECIDED F EBRUARY 27, 2012
Before W OOD , T INDER, and H AMILTON, Circuit Judges.
H AMILTON, Circuit Judge. This appeal presents issues
of state law governing the powers of Illinois fire protec-
tion districts. Defendant-appellant Lisle-Woodridge Fire
Protection District (the District) adopted an ordinance
in 2009 requiring commercial buildings and multi-family
2 No. 11-2905
residences to have fire alarms equipped with wire-
less radio technology that would send alarm signals
directly to the central monitoring “board” operated by
the District. The 2009 ordinance further provided that
the District would contract with just one private alarm
company to provide and service the signaling equipment.
As a result, all commercial and multi-family buildings
would have had to become customers of the District,
displacing the plaintiffs-appellees in this case, several
private fire alarm companies that have competed for
these customers’ business for many years.
The alarm companies sued the District on claims under
the United States Constitution, federal antitrust law, and
state law. Without reaching the federal claims, the
district court granted summary judgment for the plain-
tiff alarm companies on the basis of state law and perma-
nently enjoined the District from implementing the
new ordinance. ADT Security Services, Inc. v. Lisle-Woodridge
Fire Prevention Dist., 799 F. Supp. 2d 880 (N.D. Ill. 2011).
The District has appealed. We affirm in part and
reverse in part. We hold that the District has the statutory
authority to require that commercial and multi-family
buildings connect directly to the District’s monitoring
board, and to do so through wireless radio technology.
We reverse the district court’s injunction to the extent
it prohibited implementation of those portions of the
2009 ordinance. But we also hold that the District
No. 11-2905 3
does not have the authority to displace the entire private
market by requiring all customers to buy alarm sig-
naling services and equipment from itself or just one
private company. We affirm those portions of the district
court’s injunction and remand for further proceedings.
I. Factual and Procedural History
In assessing whether the plaintiff alarm companies
are entitled to summary judgment, we review the record
in the light most favorable to the District, the non-
moving party, drawing all reasonable inferences in its
favor. See Lesch v. Crown Cork & Seal Co., 282 F.3d 467,
471 (7th Cir. 2002).
A. The Illinois Fire Protection District Act
The Illinois Fire Protection District Act (the Act) allows
two or more local governments to consolidate fire pro-
tection and related services by creating a fire protection
district. 70 ILCS 705/1 et seq. Such districts operate with
their own elected boards that exercise the powers
spelled out in the Act. These include the powers to buy
or lease firefighting equipment, employ firefighters, and
impose civil fines for setting false fire alarms, 70 ILCS
705/6, as well as the authority to tax district residents
to pay for the fire protection services in the district.
70 ILCS 705/14.
4 No. 11-2905
Illinois law does not grant fire protection districts
general home rule powers. Instead, Illinois courts have
held that fire protection districts are limited to the powers
expressly granted by statute. Wilkes v. Deerfield-Bannock-
burn Fire Protection Dist., 399 N.E.2d 617, 622-23 (Ill. App.
1979); Glenview Rural Fire Protection Dist. v. Raymond,
311 N.E.2d 302, 304-05 (Ill. App. 1974). The Illinois
General Assembly has amended the Act from time to
time to grant fire protection districts specific additional
powers. See, e.g., Pub. Act 85-1285, § 1, effective Jan. 1, 1989
(codified at 70 ILCS 705/11g) (services for responding
to emergencies involving hazardous materials); Pub. Act
81-1375, § 1, effective Aug. 9, 1980 (codified at 70 ILCS
705/11) (emergency ambulance service); Pub. Act 81-869,
§ 1, effective Jan. 1, 1980 (codified at 70 ILCS 705/11e)
(street-address numbering systems). Particularly im-
portant here is section 11 of the Act, which gives certain
fire protection districts, including the defendant-
appellant, “the express power to adopt and enforce fire
prevention codes and standards parallel to national
standards.” 70 ILCS 705/11.
B. Fire Alarm Technology and the 2009 Ordinance
A fire alarm system consists of three basic parts:
(1) smoke and heat detectors; (2) an alarm panel in the
protected building that receives signals from those de-
tectors; and (3) a communication device that transmits
the signals to a receiver “board” at a central location for
dispatch of firefighting personnel and equipment. These
signals may be transmitted either through telephone
wires or by wireless radio technology. Prior to 2009, most
No. 11-2905 5
of the plaintiff alarm companies operated systems that
communicated, whether by wireless radio or by tele-
phone wire, with central monitoring stations operated
by the private companies themselves. In fire alarm in-
dustry lingo, this type of system is known as a “central
station service” system. When a private alarm company’s
central station receives an alarm or trouble signal, the
company then relays that signal to the appropriate
local dispatching agency.
Plaintiff ADT Security Services has a different system.
An earlier ordinance adopted by the District prohibited
central station monitoring if the central station was
outside a specified four-county area in the Chicago
area. Unlike the other plaintiffs, ADT is not based in
Illinois and has no central stations located within the
state. It therefore provided for communication through
dedicated telephone lines connected directly to an
alarm board maintained at the District, which then for-
warded the signals to the District’s local dispatching
agency, which is known as Du-Comm (a portmanteau
for DuPage Public Safety Communications).
The District became dissatisfied with ADT’s telephone-
based system, and on review of summary judgment, we
treat as true the District’s claim that it was concerned
about safety and efficiency. In 2007, the District began
to study the feasibility of implementing a uniform
wireless radio network and concluded that such a
system would be advantageous. The District solicited
bids from six fire alarm companies, including plaintiffs
ADT and Alarm Detection Systems, Inc. (ADS). In their
6 No. 11-2905
bids, ADT and ADS proposed central station service
systems, that is, ones in which signals would be sent to
their own central stations rather than directly to the
District. Two other vendors — Fox Valley Fire and Safety
and Chicago Metropolitan Fire Prevention Company
(Chicago Metro) — each proposed setting up a single
wireless alarm monitoring network in which the
District itself would own and operate its own supervising
station, and all customers’ alarm signal transmitters
would communicate directly with the District’s board
there. In other words, Fox Valley and Chicago Metro
proposed cutting out the middlemen of multiple alarm
companies’ central stations. In the fire alarm industry,
this arrangement where the government agency’s
station is the nerve-center is called a “remote super-
vising station” system. The District determined that
this was the superior model and eventually selected
Chicago Metro as the winning bidder.
The District adopted the 2009 ordinance requiring
all commercial properties and multi-family residences to
join the District’s new wireless monitoring network.
See Lisle-Woodridge Fire Protection District, Ill., Ordinance
09-06 §§ 1.3, 1.6 (Sept. 22, 2009) (the Ordinance). The
Ordinance noted that the District had already entered
into a contract with Chicago Metro “for the purpose of
providing and maintaining a state-of-the-art wireless
radio monitoring system that will transmit alarm and
trouble signals to the District’s communications center
via a Keltron radio transmitter.” Id. at 2. In the contract
with Chicago Metro, the District agreed to require all
current and future subscribers to “direct-connect” so that
all alarm and trouble signals would be communicated
No. 11-2905 7
directly to the District’s communications center via one
particular type of equipment, the Keltron radio trans-
mitter. The Ordinance accordingly provided: “The method
of connecting directly to the remote supervising station
shall be by the LWFPD Keltron Wireless Alarm Net-
work, or other alternate connection means as approved
by the Fire Prevention Chief.” Id. § 1.6.
This direct-connect requirement imposed a sub-
stantial change on customers whose alarms are con-
nected to the central stations of the plaintiff private
alarm companies. The Ordinance provided that such
subscribers would be “provided with a radio transceiver
that replaces their current monitoring connection ar-
rangement to the remote supervising station.” Id. § 1.3.
The District would be “the owner of all equipment as-
sociated with the LWFPD Keltron Wireless Alarm Net-
work.” Id. The Ordinance also required all subscribers
to sign up for five-year “leasing” contracts for use of the
equipment and to pay monitoring fees to the District. Id.
§ 1.8. “The installation and the annual and necessary
maintenance . . . of the radio transceiver at the sub-
scriber’s premise will be completed solely by a fire alarm
company of the [District’s] choice,” namely Chicago
Metro. Id. § 1.4 (emphasis added). The chosen contractor
would thus be the exclusive provider of the transmitter
technology, but not of the other parts of the alarm
system — i.e., the smoke and heat detectors that trigger
alarm signals — which property owners remained respon-
sible for having installed, maintained, and tested. See id.
§ 1.5.
8 No. 11-2905
As its statutory authority under the Act, the Ordinance
relied primarily on the power of fire protection districts
under section 11 to adopt fire prevention standards
that are parallel to national standards. See id. at 2. The
Ordinance included a severability clause in case any
portion might be held invalid. See id. § 3.
In December 2009, after adoption of the Ordinance, the
District sent a letter to owners of all commercial and multi-
family residential properties in the District. The letter
announced the new system and its associated monitoring
fee of $66 per customer per month. The most provocative
part of the letter said: “If you are under contract for
monitoring with another vendor, our ordinance now
supersedes those contracts and makes them null and
void.” To the alarm companies already providing fire-
alarm monitoring services to these customers under long-
term contracts, this was an invitation to file this lawsuit.
D. District Court Proceedings
The District’s system through Chicago Metro became
fully operational in May 2010, and at that time, the plain-
tiff alarm companies lost many of their customers in
the District’s territory. The private alarm companies
filed suit in July 2010 alleging that the Ordinance
violated federal antitrust laws and the Due Process,
Equal Protection, and Contracts Clauses of the United
States Constitution, and was not authorized by Illinois
law. The district court has federal question jurisdiction
over the antitrust and constitutional claims pursuant to
28 U.S.C. § 1331 and has exercised supplemental juris-
No. 11-2905 9
diction under 28 U.S.C. § 1367 over the state-law claim.
The district court issued a preliminary injunction, ruling
that the District did not have the legal authority under
Illinois law to require commercial accounts to comply
with the Ordinance. While appeals from that injunction
were pending, the district court granted summary judg-
ment and issued a permanent injunction. ADT Security
Services, 799 F. Supp. 2d 880. That effectively mooted the
already-briefed first appeals, and we expedited this
appeal of the permanent injunction.
We heard oral argument on November 17, 2011, and
issued an interim order staying in part the decision of
the district court. We issued a clarification of the interim
order on December 19, 2011. We now find that the
district court erred in part in its interpretation of Illinois
law to the extent it enjoined the District’s direct-connect
and wireless requirements, so we reverse those portions
of the injunction. We affirm the district court’s finding
that the District could not require all commercial and
multi-family buildings to use the District and its one
chosen private vendor for fire alarm equipment and
services, and we reject without further comment the
District’s numerous other claims of error. We remand
for further proceeding on the remaining claims.
II. The District’s Powers Under Illinois Law
We review de novo the district court’s decision to
grant summary judgment. E.g., Collins v. Hamilton, 349
F.3d 371, 374 (7th Cir. 2003). Where a permanent injunc-
10 No. 11-2905
tion has been issued based on a grant of summary judg-
ment, we must determine whether the plaintiff has
shown: “(1) success, as opposed to a likelihood of success,
on the merits; (2) irreparable harm; (3) that the benefits of
granting the injunction outweigh the injury to the defen-
dant; and, (4) that the public interest will not be harmed
by the relief requested.” Id. The crucial factor in this
appeal is plaintiffs’ success on the merits, and this factor
depends on three questions of statutory interpretation:
whether the District has the authority under the Act to
require (1) that fire alarm systems in the district direct-
connect to a central monitoring facility operated by the
District or its authorized agent; (2) that such connections
be established by wireless radio technology; and (3) that
all account holders rely exclusively on the District and
its chosen vendor for providing alarm equipment and
monitoring services.
These questions are ones of first impression. Our duty
is to interpret the Act as best we predict the Illinois Su-
preme Court would. See Woidtke v. St. Clair County, 335
F.3d 558, 562 (7th Cir. 2003); Allstate Ins. Co. v. Menards,
Inc., 285 F.3d 630, 637 (7th Cir. 2002). In the absence of
guiding decisions by the state’s highest court, we
consult and follow the decisions of intermediate appel-
late courts unless there is a convincing reason to
predict the state’s highest court would disagree. See
Fidelity Union Trust Co. v. Field, 311 U.S. 169, 177-78
(1940) (“An intermediate state court in declaring and
applying the state law is acting as an organ of the State
and its determination, in the absence of more convincing
evidence of what the state law is, should be followed by
No. 11-2905 11
a federal court in deciding a state question.”); Klunk v.
County of St. Joseph, 170 F.3d 772, 777 (7th Cir. 1999) (“To
the extent that the state’s highest court has not addressed
an issue, we examine the decisions of the lower state
courts.”).
In Illinois, the “only units of local government that
may exercise home rule powers are counties and munici-
palities.” Dineen v. City of Chicago, 531 N.E.2d 347, 349
(Ill. 1988), citing Ill. Const. art. VII, § 6(a). Since “a fire
protection district is neither a county nor a mu-
nicipality, . . . it cannot have home rule powers.” Id. at 349-
50. “Fire protection districts . . . derive their existence
and all their powers from the legislature.” Glenview
Rural Fire Protection Dist. v. Raymond, 311 N.E.2d 302, 304
(Ill. App. 1974). They “possess no inherent powers and
must be able to point out the statute which authorizes
their acts.” Id., citing City of Chicago v. Arbuckle Bros., 176
N.E. 761 (Ill. 1931). Where such authorizing language
is invoked, it is “strictly construed and any fair or rea-
sonable doubt that an asserted power exists is resolved
against [the fire protection district].” Id.In this case, the District has identified three sections of
the Act — sections 1, 6, and 11 — to support its assertion
of power in the Ordinance. We can dispense quickly
with sections 1 and 6, and then turn to the main issue,
the scope of section 11.
We agree with the district court and the Illinois Appel-
late Court that section 1 provides a broad statement of
general purpose that does not itself confer any powers on
fire protection districts. The specific grants of power are
in many later sections, which would all be superfluous
12 No. 11-2905
if we read section 1 as broadly as the District proposes.
See ADT, 799 F. Supp. 2d at 884; Glenview, 311 N.E.2d
at 305; see also Wilkes v. Deerfield-Bannockburn Fire Protec-
tion Dist., 399 N.E.2d 617, 623 (Ill. App. 1979). On its
own, section 1 does not provide the District with the
authority to regulate fire alarm systems.
The District also relies on two subsections of section 6,
which grants powers to fire districts’ boards of trustees.
Subsection 6(d) gives a fire protection district the power to
buy real estate and personal property with installment
contracts lasting up to 25 years. Subsection 6(i) gives a
district’s board the administrative powers necessary to
conduct the board’s own business. Neither provision
broadens the services the District may provide or autho-
rizes the District to take over the fire alarm business
within its boundaries. See generally Gaffney v. Board of
Trustees of Orland Fire Protection Dist., 921 N.E.2d 778,
785 (Ill. App. 2009) (subsection 6(i) does not permit the
board to “impose any substantive requirements” for
health insurance eligibility that are not otherwise set
forth in the statute).1
1
The District also makes a one-sentence throwaway argument
that section 10a empowers it to establish its own fire alarm
network because that section “provides a fire protection dis-
trict the authority to ’sell, lease, or exchange personalty.’ ”
Appellant’s Br. at 15, quoting 70 ILCS 705/10a. That quotation
is misleading because it omits without notation the remainder
of the sentence. The full sentence reads: “The board of trustees
of any fire protection district incorporated under this Act may
(continued...)
No. 11-2905 13
With those preliminaries out of the way, we turn to the
main event, the scope of section 11 of the Act, which
grants substantive powers to fire protection districts.
We conclude that those powers are not so broad as to
enable the District to establish a monopoly over alarm
transmitters and monitoring services, but they do autho-
rize the District to require buildings to be equipped
with wireless alarm signaling devices that communicate
directly with the District’s board.
Section 11 provides in relevant part:
The board of trustees of any fire protection district
incorporated under this Act has the power and it is
its legal duty and obligation to provide as nearly
adequate protection from fire for all persons and
property within the said district as possible and to
prescribe necessary regulations for the prevention
and control of fire therein. The board of trustees
may provide and maintain life saving and rescue
equipment, services and facilities, including an emer-
gency ambulance service. . . . [With exceptions not
applicable here] the board of trustees has the
1
(...continued)
sell, lease or exchange personalty and may sell or lease realty
owned by the district and no longer needed for fire protection
purposes.” 70 ILCS 705/10a (emphasis added). This provision
concerns surplus property that a fire district wishes to convey
or lease to others, rather than property it seeks to acquire. The
district court rightly characterized the District’s reliance
on section 10a as “absurd” and “grasping at straws.”
14 No. 11-2905
express power to adopt and enforce fire prevention
codes and standards parallel to national standards.
70 ILCS 705/11.2 Whether section 11 authorizes the new
regulations imposed by the District’s Ordinance depends
on whether the new requirements can be considered
“parallel to national standards.” Id. We focus on the
Ordinance’s three distinct changes to the legal regime
governing fire alarm systems in the District. First, it
requires commercial and multi-family buildings to have
alarm systems that communicate directly with the Dis-
2
The current language in this section is the product of an
extended dialogue between the Illinois Appellate Court and the
Illinois legislature. In 1979, Wilkes held that section 11 did not
allow a fire protection district to operate emergency ambulance
services as a form of “life saving and rescue . . . services.” 399
N.E.2d at 620. The legislature then amended section 11 to
authorize emergency ambulance services. Pub. Act 81-1375,
§ 1, effective Aug. 9, 1980 (codified as amended at 70 ILCS
705/11). Six years earlier, in 1974, the Glenview court had
invalidated a fire protection district ordinance requiring the
installation of sprinkler systems. 311 N.E.2d at 304-06. The
legislature likewise responded by amending what is now
section 11 to give districts the “express power to adopt and
enforce fire prevention codes and standards parallel to
national standards.” Pub. Act 80-453, § 1, effective Oct. 1, 1977
(codified as amended at 70 ILCS 705/11). The Illinois
Appellate Court later confirmed that this “national standards”
amendment authorized fire protection districts to require
building owners to install sprinkler systems. See Orland
Fire Protection Dist. v. Intrastate Piping & Controls, Inc., 637
N.E.2d 641, 646 (Ill. App. 1994).
No. 11-2905 15
trict’s monitoring board (the direct-connect require-
ment). Second, it requires that such connections be via
wireless radio communication (the wireless require-
ment). Third, it requires all affected property owners to
lease signaling devices from the District and to con-
tract with the District for the installation, service, and
maintenance of these devices (the exclusive provider
requirement). We examine each requirement separately
to determine whether it is parallel to national standards.
A. The Direct-Connect Requirement
As both sides acknowledge, the model fire codes
issued by the National Fire Protection Association
(NFPA) supply the prevailing national standards for
purposes of section 11. The applicable NFPA code on alarm
signaling, NFPA 72, establishes that a fire protection
agency may designate any of three different types of
supervisory entities to receive transmission signals from
fire alarm devices: (1) the “central stations” of private
alarm companies (like plaintiffs in this case); (2) a “remote
supervising station” operated by a governmental agency
(like the District’s preferred system); or (3) “proprietary
supervising stations” (stations operated by the building
owners themselves — an alternative that is not at issue
in this case). See NFPA 72: National Fire Alarm and
Signaling Code §§ 26.1, 26.3-26.5 (2010 ed.) (hereinafter
“NFPA 72”); see also Alarm Detection Systems, Inc. v. Village
of Hinsdale, 761 N.E.2d 782, 786 (Ill. App. 2001) (“Pursuant
to NFPA 72, all commercial structures that are required
16 No. 11-2905
to have an automatic fire alarm system must be moni-
tored by either a central monitoring station or a remote
station (e.g., a municipal fire board).”), citing NFPA 72:
National Fire Alarm Code § 5-4.1 (1999 ed.).3
Where a government agency like the District elects
option (2) and uses its own fire board, the NFPA code
provides: “Alarm, supervisory, and trouble signals shall
be permitted to be received at” any one of three locations:
“a communications center that complies with . . . [NFPA]
requirements,” “at the fire station,” “or at the govern-
mental agency that has public responsibility for taking
prescribed action to ensure response upon receipt of a
alarm [sic] signal.” NFPA 72 §§ 26.5.3.1.1-2. Finally,
“[w]here permitted by the authority having jurisdiction,
3
NFPA 72 defines “Central Station Service Alarm System” as:
“A system or group of systems in which the operations of
circuits and d evices are transm itted autom atically
to . . . a . . . central station . . . operated by a person, firm, or
corporation whose business is the furnishing, maintaining, or
monitoring of supervised alarm systems.” NFPA 72 § 3.3.267.1.
The code defines “Proprietary Supervising Station” as: “A
supervising station under the same ownership as the pro-
tected premises fire alarm system(s) that it supervises (moni-
tors).” Id. § 3.3.266.2. The code defines “Remote Supervising
Station Alarm System” as: “a protected premises fire alarm
system . . . in which alarm, supervisory, or trouble signals
are transmitted automatically to . . . and supervised from
a remote supervising station that has competent and experi-
enced servers and operators who, upon receipt of a signal,
take such action as required by this Code.” Id. § 3.3.267.3.
No. 11-2905 17
alarm, supervisory, and trouble signals shall be permitted
to be received at an alternate location approved by the
authority having jurisdiction.” Id. § 26.5.3.1.3. In other
words, the relevant national standards are consistent
with either a system using multiple central stations or a
system built around a single remote board.
In passing the disputed Ordinance, the defendant
District opted for the latter system — the “remote super-
vising station” system authorized by NFPA 72 § 26.5.3.1.2.
Because this reflects one scheme that the NFPA has
expressly approved, we conclude that the District’s direct-
connect requirement is parallel to national standards. The
alarm companies’ contention that the District must
allow each and every supervisory signaling system
allowed by NFPA 72 is both impractical and at odds with
the meaning of the word “parallel.” In ordinary (non-
geometric) parlance, “parallel” means comparable to
and consistent with, but not necessarily “identical.” One
thing is parallel to another when it is “marked by a
likeness or correspondence” or when there is “agreement
in many or all essential details.” Webster’s Third New
International Dictionary of the English Language 1637 (1993).
Because the Ordinance selects among permissible alter-
natives by requiring alarm devices to direct-connect to
the board at the District’s own remote supervising
station, it corresponds to and is therefore parallel to
national standards.
The plaintiff alarm companies contend that because the
NFPA standards also allow for their central stations, as
well as just one board operated by the District, section 11
does not permit the District to impose the stricter re-
18 No. 11-2905
quirement of direct connection to its own board. As
we understand their argument, plaintiffs contend that
section 11 makes the NFPA standards both the floor and
the ceiling for requirements that the District may im-
pose. We do not interpret the “parallel to national stan-
dards” language so narrowly. Section 11 allows an
Illinois fire protection district to use the NFPA standards
as a floor and to require similar but parallel and some-
what more demanding requirements. Such experimenta-
tion may be helpful in improving fire protection for
the long term, and we do not read section 11 as prohib-
iting it. We therefore conclude that a fire district, like
a non-home-rule municipal corporation, may mandate a
remote supervising system that requires direct connec-
tion to the district’s own remote supervising station’s
fire alarm board.
This result is in harmony with the Illinois Appellate
Court’s conclusion that a non-home-rule municipality
has the authority to “require[ ] all owners of commercial
buildings to connect their fire alarm systems directly to
the Village’s fire board for monitoring.” Alarm Detection
Systems, Inc. v. Village of Hinsdale, 761 N.E.2d 782, 785
(Ill. App. 2001). Of course, municipal corporations derive
their legal authority to regulate fire protection from a
different statute than fire protection districts do. See
Illinois Municipal Code, 65 ILCS 5/11-6-1; Hinsdale, 761
N.E. 2d at 790 (“Fire protection districts are not gov-
erned by the provisions of the [Illinois Municipal]
Code and are completely separate legal entities from
municipalities.”). Like fire protection districts, however,
non-home-rule municipalities possess only those powers
No. 11-2905 19
established by statute. See Ill. Const. 1970, art. VII, § 7;
Glenview, 311 N.E.2d at 304 (“Fire protection districts, like
all municipal corporations, derive their existence and all
their powers from the legislature.”) (emphasis added).
Moreover, the Hinsdale court considered the village’s own
direct-connect ordinance in the context of NFPA 72,
just as we do here, and likewise read NFPA 72 to “autho-
rize fire alarm monitoring by either a central station or
a fire board.” Hinsdale, 761 N.E.2d at 788. Like the
District in our case, the Village of Hinsdale opted for
the latter, and the requirement was upheld.4
B. The Wireless Requirement
The Ordinance’s requirement that alarm devices com-
municate with the District’s board via wireless radio
technology is also parallel to national standards. NFPA 72
provides: “Alarm system equipment and installations
4
The major difference in Hinsdale was that the court ultimately
concluded that because a municipality had the statutory
authority “to amend national building or fire codes or draft its
own codes as it determines is necessary in order to protect
the public safety and welfare,” it was not limited to “enacting
only those rules and regulations promulgated by nationally
recognized trade associations.” Id. at 789. The state court thus
upheld the ordinance in its entirety without examining its
consistency with national standards. Fire districts, in our
reading of the Illinois law, do not get such wide latitude.
Their rules must “parallel” national standards, but the direct-
connect requirement does so.
20 No. 11-2905
shall comply with Federal Communications Commission
(FCC) rules and regulations, as applicable, concerning
the following: (1) Electromagnetic radiation[;] (2) Use of
radio frequencies[;] (3) Connection to the public switched
telephone network of telephone equipment, systems, and
protection apparatus.” NFPA 72 § 26.6.2.4.1 (emphases
added). The code further specifies: “Where only one
communications technology is used, any failure of the com-
munications path shall be annunciated at the super-
vising station within 5 minutes of the failure.” Id.
§ 26.6.3.1.4.1 (emphasis added). The applicable NFPA code
thus identifies wireless radio technology as one permis-
sible communications method in fire alarm signaling
devices and provides further that a system may be
limited to “only one communications technology” for any
one supervising station. Id. The District’s selection of
wireless radio frequency as an exclusive form of com-
munications technology is consistent with and therefore
“parallel” to these standards.
C. The Exclusive Provider Requirement
The more dramatic effect of the challenged Ordinance
was to make the District, together with its private
partner Chicago Metro, the exclusive provider and
servicer of the necessary equipment. The District has
identified no provision in NFPA 72 that authorizes such
an arrangement, nor have we found one. On the contrary,
in its definition of “Remote Supervising Station Service”
(the direct-connect system), NFPA 72 states: “Related
activities at the protected premises, such as equipment
No. 11-2905 21
installation, inspection, testing, and maintenance, are the
responsibility of the owner” of the premises. NFPA 72
§ 3.3.268.3 (emphasis added). The District, by making
itself the sole purveyor, installer, inspector, tester, and
maintainer of the necessary radio transmitter equipment,
has usurped responsibilities the NFPA code accords to
property owners. Although NFPA 72 authorizes a fire
protection agency like the District to control the receiver
end of the alarm signaling infrastructure — that is, by
owning and operating a remote supervising station — it
does not authorize the takeover of the transmitter end,
as well. The District’s requirement to that effect cannot
be said to “parallel” any national standard of fire protec-
tion services and is consequently not authorized under
section 11 of the Act.
Neither the NFPA code nor the Act even tacitly
endorses so drastic a policy change as the establish-
ment of a local governmental monopoly over fire alarm
transmitter devices. In view of fire protection districts’
limited powers, supplanting a competitive private
market is far too significant a change to infer from statu-
tory silence. We agree with the district court that the
District exceeded its authority under Illinois law in en-
acting the Ordinance’s exclusive provider requirement,
which is therefore null and void. The Ordinance’s
severability clause allows this provision to be invalidated
without condemning the entirety of the legislation.
Because the direct-connect and wireless requirements
are permissible exercises of the District’s powers under
section 11 of the Act, these provisions survive review,
and the district court erred by striking them down as
ultra vires acts.
22 No. 11-2905
III. Instructions on Remand
We recognize that the district court will continue to
face a number of additional claims and challenging
issues after remand. To help guide the district court’s
resolution of these issues, some of which have been
identified in the parties supplemental motions memo-
randa to this court, we briefly address two, and in all
other respects deny the parties’ supplemental motions.
A. Effective Monopoly
The plaintiff alarm companies contend that if the
District is able to require direct connection to its own
board, it will “effectively perpetuate a monopoly over
alarm monitoring that displaces competition” — presum-
ably by setting restrictive technical specifications to
enable compatibility with its board. (According to the
alarm companies, only one manufacturer’s transmitter
is currently compatible.) Appellees’ Motion for Clarifica-
tion, Dkt. No. 46-1, at 4-5. We acknowledge that this is a
possibility. With the District providing its own central
station and dispatch services, it remains to be seen
what marginal value private alarm companies could
offer potential customers by providing and servicing
their own wireless transmitters. The benefits of
bundled alarm services — combining fire, burglar,
and other services into one transmitting unit and one
contract — might be attractive to some customers. We
also note that the plaintiffs’ brief to this court in the
appeals from the preliminary injunction (Nos. 10-3754
and 10-3968) seemed to acknowledge that a direct-
No. 11-2905 23
connect wireless system would be feasible. Among the
hypothetical systems the alarm companies proposed as
alternatives to a District monopoly, the alarm companies
described scenarios quite close to the arrangement our
decision today envisages:
There were obvious ways to address the purported
goal of better fire alarm monitoring without even
considering taking over the Business. The District
could have . . . (3) required that all such Commercial
Accounts switch to radio or other acceptable technol-
ogy; (4) replaced the ADT board [located at Du-Comm]
with a board that could receive wireless and let
those affected Commercial Accounts migrate to wire-
less; (5) accepted [plaintiff] ADS’s proposal to operate
a new board to serve those Commercial Accounts
on the old board at no cost to the District.
Brief of Appellees at 19, ADT Security Services, Inc. v.
Lisle-Woodridge Fire Protection Dist., Nos. 10-3754 and 10-
3968 (7th Cir. June 14, 2011). These alternatives suggest
that the plaintiff alarm companies did not anticipate that
a system in which all transmitters communicated wire-
lessly with a single supervising station would entirely
displace the competitive market.
We also note that section 1.6 of the Ordinance gave
the District’s fire prevention chief the authority to
approve alternate means of connecting directly to the
District’s network. This flexibility seems to us an
essential part of the Ordinance. If competing equip-
ment suppliers provide truly compatible alternatives,
the District would not have statutory authority or
reason to prohibit such alternatives.
24 No. 11-2905
For its part, the District insists that “each alarm
company would be able to connect directly to the
District’s board . . . with their company-owned radios,
which are linked to their customers’ alarm panels” and
“compete on an equal playing field,” with “no alarm
company . . . at a competitive disadvantage.” Appellees’
Response to Motion for Clarification, Dkt. No. 53, at 2-3.
We acknowledge the disagreement and will not specu-
late further on the matter. Although resolution of the
question would not change the analysis of the District’s
authority under the Act, it may affect the legality of
its planned system under state and federal antitrust
laws. We leave it to the district court to address the
problem in the first instance.
B. Fees
On a related issue, the parties have also disputed
whether the District has the authority to charge fees to
the alarm companies for the privilege of connecting to
the District’s board. The alarm companies contend that
this power would also enable the District to establish
an effective monopoly by charging enough either to
force the private companies to raise their rates to cus-
tomers, thus rendering them uncompetitive, or to
increase the private companies’ costs to the point they
are induced to exit the market. On this point, we agree
that this would be the likely result of allowing the
District to charge fees to alarm companies for direct-
connect access to its board. In any event, we do not think
the Act permits the District to impose such fees to the
No. 11-2905 25
alarm companies for services provided on behalf of
District residents. Section 11f provides:
(a) The board of trustees of a fire protection district
may fix, charge, and collect fees not exceeding the
reasonable cost of the service for all services
rendered by the district against persons, businesses
and other entities who are not residents of the fire
protection district.
(b) Such charge may not be assessed against residents
of the fire protection district or persons who request
fire protection coverage for an unprotected area
and who pay to the fire protection district an amount
equal to the district’s Fire Protection Tax pursuant
to Section 4 of the Fire Protection of Unprotected
Area Act.
70 ILCS 705/11f(a)-(b). The District points out that sub-
section 11f(a) allows it to charge “fees not exceeding the
reasonable cost of . . . services rendered” to “businesses”
that are not residents. The language in subsection 11f(b),
however, clearly indicates that the type of “services”
referred to are limited to those involving “coverage for
an unprotected area.” Together, these subsections allow
a fire protection district to charge a fee to provide fire
protection services to persons or businesses outside its
(tax-paying) jurisdiction, but prohibit the district from
imposing fees on outsiders for services it provides to tax-
paying insiders in the ordinary course of fire protection.
Charging the alarm companies for the right to connect
to the District’s board would not facilitate the extension
of fire protection coverage to non-residents, so in our
26 No. 11-2905
view such a fee would not be permitted under subsec-
tion 11f(a).5
C. Timing
Finally, our interim order stayed the district court’s
permanent injunction until March 15, 2012. Our interim
order is extended to 28 days after issuance of this opinion.
IV. Conclusion
The judgment of the District Court is A FFIRMED in part
and R EVERSED in part, and the case is R EMANDED for
further proceedings consistent with this opinion.
5
We express no view on whether this provision prohibits
the District from imposing the $66 “monitoring fee” on residents
for use and maintenance of its alarm signaling equipment.
The alarm companies have not specifically challenged this
provision of the Ordinance, so we need not address this ques-
tion here.
2-27-12