April 8, 2019
from the United States District Court for the Northern
District of Illinois, Eastern Division. No. l:14-cv-00876 -
Thomas M. Durkin, Judge.
Wood, Chief Judge, and Scudder and St. Eve, Circuit Judges.
EVE, CIRCUIT JUDGE.
appeal is one of two we decide today regarding the market for
commercial fire-alarm services in Chicago's suburbs. Here
we are concerned with the Villages of Orland Park and Orland
Hills (the "Villages") and, to a lesser extent,
Bloomingdale and Lemont.
2014, citing safety concerns, the Villages passed ordinances
that require commercial buildings to send fire-alarm signals
directly to the local 911 dispatch center. This decision,
sensible as it may seem, comes at an economic cost: either by
design or due to technological restraints, the ordinances
allow only one alarm-system provider to operate in the
Villages. That provider is Tyco Integrated Security, LLC. It
services the area pursuant to an exclusive agreement with the
Villages' dispatch center, Orland Fire Protection
Tyco's competitors, Alarm Detection Systems, Inc.
("ADS"), filed this suit against Orland Fire, Tyco,
and another dispatch center, DuPage Public Safety
Communications ("Du-Comm"), among others. It
brought a host of claims, including ones under the Illinois
Fire Protection District Act (the "District Act"),
the Sherman Act, and the Fourteenth Amendment-all with the
goal of breaking Tyco's hold on the market.
district court decided for the defendants. After dismissing
the District Act claims at summary judgment, it concluded
after a bench trial that the Sherman Act claims fail because
they are premised on the unilateral actions of the
Villages-which ADS did not sue-and that the Fourteenth
Amendment claims lacked merit. We agree and affirm.
Illinois, local laws often require commercial buildings and
apartment complexes to maintain fire-alarm systems. The
buildings and complexes-or "accounts," as the
parties call them-contract directly with the alarm-system
providers to install and maintain the systems. The National
Fire Protection Association's National Fire Alarm and
Signaling Code (NFPA 72) sets the nationwide standard for
a system detect fire or smoke, local 911 dispatch centers are
responsible for receiving distress calls and sending
services. The dispatch center in the Villages and Lemont is
Or-land Fire. It is what is called a "fire-protection
district/' established under the District Act. 70 ILCS
705/1 et seq. The District Act requires
fire-protection districts, like Orland Fire, to operate
consistent with nationwide standards, like NFPA 72.
See 70 ILCS 705/11. In Bloomingdale, Du-Comm is the
dispatch center. Du-Comm is not a fire-protection district,
but a different creature of Illinois law-an
"intergovernmental cooperation," formed by several
municipal members, including Bloomingdale. 5 ILCS 220/3.
logistics of the fire-alarm systems are important to this
appeal. Each account's system has essentially three
parts: heat or smoke detectors, a panel, and a transmitter.
When a detector goes off, it sends an alert to the panel. The
panel then connects to the transmitter. The transmitter, in
turn, sends a radio signal to one of two places: (1) a
central-supervising station run by the alarm-system provider
(the "CSS model"); or (2) a remote-supervising
station operated by the local dispatch center (the "RSS
model"). Which model applies depends on the account and
its provider's arrangement or, as here, what the local
the CSS model and the RSS model comply with NFPA 72. See
NFPA 72: National Fire Alarm and Signaling Code
§§ 3.3.282.1, 3.3.282.3 (2016 ed.). If a CSS model
is in place, a CSS operator will receive the signal from the
property's radio; and if the operator determines that the
signal was not a false alarm or a maintenance problem, the
CSS calls the dispatch center, which in turn sends help. If,
however, the signal goes to the RSS, the RSS either contacts
the account directly or sends help. That is why the RSS model
is often called a "direct connect" system: accounts
send their signals directly to the RSS dispatch center.
Alarm-system providers, in addition to their contracts with
the accounts, contract with dispatch centers to provide the
necessary signal-receiving equipment.
RSS model, unlike a CSS model, the dispatch center and the
account usually must share an equipment provider. This,
according to the record and the district court's
findings, is because the dispatch center's receiving
equipment operates on FCC-licensed radio frequencies. For
that equipment to receive the signal coming from the
property, it must operate on the same frequency. And the
equipment provider, like Tyco, owns the frequency licenses.
at least the current state of play. ADS, however, insists
that alternative methods are feasible. First, it asserts that
its CSS can instantaneously send alert signals it receives
from accounts to the RSS through a process called
"automatic retransmission." Doing so, ADS believes,
would have the same effect as a signal that is sent directly
from the accounts to the dispatch center, as in an RSS model.
Second, it claims that it can share a radio frequency with
the RSS's alarm-system provider, and thus, its
transmitters can send signals directly to the RSS. Neither
alternative has, to date, taken hold in the areas with which
this appeal is concerned.
summarizes the technical background. There is an important
legal backdrop, too. Alarm-system providers, and ADS
specifically, are no strangers to this type of litigation.
Two of our past decisions, in which both ADS and Tyco's
predecessor, ADT Security Services, Inc., were plaintiffs,
feature prominently in ADS's current claims. See ADT
Sec. Sews., Inc. v. Lisle-Woodridge Fire Prot. Dist.,
672 F.3d 492 (7th Cir. 2012) (ADTI); ADT Sec. Servs.,
Inc. v. Lisle-Woodridge Fire Prot. Dist., 724 F.3d 854
(7th Cir. 2013) (ADT II).
I and ADT II concerned another fire-protection
district, the Lisle-Woodridge Fire Protection District. The
question we faced was whether an ordinance set by the
district exceeded NFPA 72, and, by extension, the
district's authority under the District Act. We focused
on two facets of the ordinance: it (1) mandated an RSS model
and (2) required accounts to purchase equipment from
Lisle-Woodridge or its exclusive partner. In ADT I,
we decided that NFPA 72 permitted an RSS model (there also
characterized as a "direct connect" model). But
NFPA 72 did not permit the district to order accounts to
purchase equipment from it or its exclusive partner. 672 F.3d
at 500-03. We then remanded the case for further fact
finding. After that fact finding, in ADT II, we
affirmed the district court's decision that the district
was not in fact operating an RSS model or any other form of
NFPA 72-approved supervision; it was, instead, routing
signals through an intermediary. The district's scheme
therefore violated NFPA 72 and by extension the District Act.
724 F.3d at 868-71.
I and ADT II caused fire-protection districts
and municipalities in the greater Chicagoland area to
reconsider their protocols. Orland Fire and the Villages were
among them. Since 2006, Orland Fire had operated under an
ordinance it issued requiring that systems "directly
connect" to Orland Fire. To make that RSS model work,
Orland Fire entered into an exclusive contract with Tyco. The
contract made Tyco the sole provider of equipment to Orland
Fire and of transmitters to the accounts. The ...