Alarm Detection Systems, Incor v. Orland Fire Protection Distri ( 2019 )

In the
United States Court of Appeals
For the Seventh Circuit
____________________
No. 18-2926
ALARM DETECTION SYSTEMS, INCORPORATED,
Plaintiff-Appellant,
v.
ORLAND FIRE PROTECTION DISTRICT, et al.,
Defendants-Appellees.
____________________
Appeal from the United States District Court for the
Northern District of Illinois, Eastern Division.
No. 1:14-cv-00876 — Thomas M. Durkin, Judge.
____________________
ARGUED APRIL 8, 2019 — DECIDED JULY 15, 2019
____________________
Before WOOD, Chief Judge, and SCUDDER and ST. EVE, Circuit
Judges.
ST. EVE, Circuit Judge. This appeal is one of two we decide
today regarding the market for commercial fire-alarm ser-
vices 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.
2 No. 18-2926
In 2014, citing safety concerns, the Villages passed ordi-
nances 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 District.
One of 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, in-
cluding ones under the Illinois Fire Protection District Act (the
“District Act”), the Sherman Act, and the Fourteenth Amend-
ment—all with the goal of breaking Tyco’s hold on the mar-
ket.
The district court decided for the defendants. After dis-
missing the District Act claims at summary judgment, it con-
cluded after a bench trial that the Sherman Act claims fail be-
cause they are premised on the unilateral actions of the Vil-
lages—which ADS did not sue—and that the Fourteenth
Amendment claims lacked merit. We agree and affirm.
I. Background
In 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
No. 18-2926 3
Association’s National Fire Alarm and Signaling Code (NFPA
72) sets the nationwide standard for these systems.
Should 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,” estab-
lished under the District Act. 70 ILCS 705/1 et seq. The District
Act requires fire-protection districts, like Orland Fire, to op-
erate 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 differ-
ent creature of Illinois law—an “intergovernmental coopera-
tion,” formed by several municipal members, including
Bloomingdale. 5 ILCS 220/3.
The 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 detec-
tor goes off, it sends an alert to the panel. The panel then con-
nects 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 ordinance requires.
Both 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
4 No. 18-2926
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 cen-
ters to provide the necessary signal-receiving equipment.
In an 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 re-
ceive the signal coming from the property, it must operate on
the same frequency. And the equipment provider, like Tyco,
owns the frequency licenses.
This is at least the current state of play. ADS, however, in-
sists 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 re-
transmission.” 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 pro-
vider, and thus, its transmitters can send signals directly to
the RSS. Neither alternative has, to date, taken hold in the ar-
eas with which this appeal is concerned.
That 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 pre-
decessor, ADT Security Services, Inc., were plaintiffs, feature
No. 18-2926 5
prominently in ADS’s current claims. See ADT Sec. Servs., Inc.
v. Lisle-Woodridge Fire Prot. Dist., 672 F.3d 492 (7th Cir. 2012)
(ADT I); ADT Sec. Servs., Inc. v. Lisle-Woodridge Fire Prot. Dist.,
724 F.3d 854 (7th Cir. 2013) (ADT II).
ADT I and ADT II concerned another fire-protection dis-
trict, the Lisle-Woodridge Fire Protection District. The ques-
tion we faced was whether an ordinance set by the district ex-
ceeded NFPA 72, and, by extension, the district’s authority
under the District Act. We focused on two facets of the ordi-
nance: it (1) mandated an RSS model and (2) required ac-
counts to purchase equipment from Lisle-Woodridge or its
exclusive partner. In ADT I, we decided that NFPA 72 permit-
ted an RSS model (there also characterized as a “direct con-
nect” model). But NFPA 72 did not permit the district to order
accounts to purchase equipment from it or its exclusive part-
ner. 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 oper-
ating an RSS model or any other form of NFPA 72-approved
supervision; it was, instead, routing signals through an inter-
mediary. The district’s scheme therefore violated NFPA 72
and by extension the District Act. 724 F.3d at 868–71.
ADT I and ADT II caused fire-protection districts and mu-
nicipalities 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 contract also required the accounts to
6 No. 18-2926
contract directly with Tyco, and Orland Fire and Tyco would
share in the monitoring fees.
After ADT I and ADT II, Orland Fire amended its ordi-
nance, rescinding the direct-connect requirement, and requir-
ing only compliance with NFPA 72. But in 2014 and 2015, the
Villages amended ordinances of their own. Those ordinances
(which we will refer to as the “Ordinances”) mandated an RSS
system and designated Orland Fire as the designated dispatch
center. Orland Fire soon after renewed its exclusive contract
with Tyco for a three-year term. In 2017, the parties renewed
the contract again with a one-year term subject to automatic
renewals.
As a result of the renewed contracts and the new Ordi-
nances, the Villages essentially returned to the status quo: the
accounts had to comply with an RSS system and, because of
the exclusive contract, Tyco would be their equipment pro-
vider. Tyco currently provides systems to almost all of the 650
accounts in the Villages. Tyco bills accounts $89 per month for
its services on average, $23.50 of which is remitted to Orland
Fire in consideration for the exclusivity arrangement. ADS
charges less for its CSS services—$55 per month, on average.
The district court did, however, find that RSS models are
more expensive to maintain than CSS models, because a sin-
gle CSS can monitor multiple jurisdictions at a time, unlike a
dispatch center acting as an RSS.
Frustrated that despite ADT I and ADT II it was still locked
out of the market, ADS filed this suit. ADS alleged more than
16 claims, but the relevant ones here are those brought under
the District Act, the Sherman Act, and the Fourteenth Amend-
ment. It claimed that Orland Fire and Du-Comm were collect-
ing excessive fees in Bloomingdale and Lemont in violation of
No. 18-2926 7
the District Act. It also claimed that Orland Fire and Tyco’s
arrangement violated § 1 and § 2 of the Sherman Act. ADS
further claimed that Orland Fire acted arbitrarily, in breach of
the Fourteenth Amendment’s guarantee of substantive due
process, by denying ADS the chance to use automatic retrans-
mission or frequency sharing.1
ADS did not, however, sue the Villages. It accepts that the
Ordinances are lawful.
The district court resolved ADS’s claims at summary judg-
ment and after a bench trial. At summary judgment, the dis-
trict court ruled that the District Act did not provide a right of
action for ADS. After a six-day bench trial, the district court
issued a thorough opinion and found that the Sherman Act
claims failed because Orland Fire and Tyco’s conduct was a
necessary consequence of the Villages’ Ordinances. The court
ruled that the Fourteenth Amendment claims failed because,
similarly, Orland Fire did not act irrationally, but rather as the
Ordinances required.
ADS appeals. We consolidated the case with Alarm Detec-
tion Sys., Inc. v. Vill. of Schaumburg, No. 18-3316, which con-
cerns a similar market and ordinance. But deciding the ap-
peals requires addressing different legal, factual, and proce-
dural questions, so we issue this opinion independently.
II. Discussion
On appeal, ADS tries to revive its District Act, Sherman
Act, and Fourteenth Amendment claims. But it makes a
broader argument, too. ADT I and ADT II, ADS says, should
1ADS also brought state tort law claims, which the district court dis-
posed of after trial. ADS does not pursue these claims on appeal.
8 No. 18-2926
guide our way in analyzing the current claims. And, ADS con-
tinues, in this case, as in those cases, we should condemn a
local effort to concentrate the alarm-system market in the
hands of one provider.
ADT I and ADT II do not control this appeal. Those deci-
sions concerned a fire-protection district’s ability to mandate
a particular RSS model under the District Act. This case cen-
ters on the Villages’ Ordinances, which are not subject to the
District Act and, as ADS concedes, are lawful. This case, more-
over, concerns an argument never raised in ADT I or ADT II—
that there is no private right of action under the District Act
for companies like ADS. This case also poses antitrust and
constitutional questions that ADT I and ADT II never reached.
We thus address ADS’s claims from square one, taking
them in turn.
A. The Fire Protection District Act
The district court dismissed the District Act claims for
want of a private right of action. Because that decision was
made at summary judgment, we review it de novo. Levitin v.
Nw. Cmty. Hosp., 923 F.3d 499, 501 (7th Cir. 2019).
Statutes can provide either express or implied rights of ac-
tion—or none at all. The District Act does not provide an ex-
press right, all agree. To determine whether it provides an im-
plied right of action, we look to Illinois law. See, e.g., Patel v.
Zillow, Inc., 915 F.3d 446, 448 (7th Cir. 2019) (looking to Illinois
law to determine whether an Illinois statute created a nonstat-
utory right of action). Though we do so cautiously, recogniz-
ing that imputing a right of action where the state was silent
assumes “policy-making authority” that is better suited for
the state’s legislature. Helping Others Maintain Envtl. Standards
No. 18-2926 9
v. Bos, 941 N.E.2d 347, 363 (Ill. App. Ct. 2010). Under Illinois
law, courts imply a cause of action when:
(1) the plaintiff is a member of the class for whose ben-
efit the statute was enacted; (2) the plaintiff’s injury is
one the statute was designed to prevent; (3) a private
right of action is consistent with the underlying pur-
pose of the statute; and (4) implying a private right of
action is necessary to provide an adequate remedy for
violation of the statute.
Metzger v. DaRosa, 805 N.E.2d 1165, 1168 (Ill. 2004). None of
those factors is present here.
The Illinois legislature enacted the District Act to create
fire-protection districts. 70 ILCS 705/1. The Act governs the
exercise of the districts’ authority to purchase equipment, id.,adopt safety codes and protocols, 70 ILCS 705/11, and employ
firefighters and collect needed funds for their operation, 70
ILCS 705/6. All of this is geared toward a clearly articulated,
broader purpose: “to protect the health, safety, and welfare of
the public by ensuring the provision of adequate fire preven-
tion and control services.” Wauconda Fire Prot. Dist. v. Stone-
wall Orchards, LLP, 828 N.E.2d 216, 224 (Ill. 2005) (citing 70
ILCS 705/1) (emphasis added).
ADS, however, uses the statute for a much different end—
to protect competition in the alarm-system market. Nowhere
in the lengthy District Act is there evidence of a concern for
competition, let alone care for the commercial welfare of com-
peting alarm-system providers. ADS, it follows, is not a mem-
ber of the protected class (public residents), its competition-
related injury is not one the District Act is geared to protect
against (fire-related damage or harm), and making a
10 No. 18-2926
competition claim out of the District Act would not be con-
sistent with its purpose (fire safety). Nor does ADS offer a rea-
son why, but for its right of action, violations of the Act will
go unremedied. We therefore find no implied right of action
for ADS under the District Act.2
ADS’s counterarguments are unpersuasive. To start, ADS
relies on three cases: Gaffney v. Bd. of Trustees of Orland Fire
Prot. Dist., 969 N.E.2d 359 (Ill. 2012), Wilkes v. Deerfield-Ban-
nockburn Fire Prot. Dist., 399 N.E.2d 617 (Ill. App. Ct. 1979),
and Glenview Rural Fire Prot. Dist. v. Raymond, 311 N.E.2d 302(Ill. App. Ct. 1974). But these cases do not address an implied
right of action under the District Act. Glenview and Gaffney do
not even involve a claim under the Act. See Glenview, 311
N.E.2d at 303–306; Gaffney, 969 N.E.2d at 368–69. And Wilkes
is equally unhelpful. It was brought by firemen claiming, es-
sentially, that a fire-protection district’s operation of an am-
bulance service was a misuse of district resources, which im-
pacted the firemen’s pay. 399 N.E.2d at 619, 621–23. Even
stretching those facts to say something about an implied right
of action—again, an issue not considered by the court—the
facts come far closer to touching on the District Act’s purpose
and operation than ADS’s competition-related claims. See 70
ILCS 705/1, 705/6.
ADS also makes the novel argument that even if there is
no right of action to enforce particular provisions of the Dis-
trict Act, there should be a right to sue when a fire-protection
district exceeds its authority under the Act. That is a
2 It does not matter that ADS seeks declaratory, rather than monetary,
relief under the District Act. Declaratory relief “presupposes the existence
of a judicially remediable right” and thus cannot be pursued without a
predicate right of action. Schilling v. Rogers, 363 U.S. 666, 677 (1960).
No. 18-2926 11
distinction without a difference. A regulated entity exceeds its
statutory authority because it does not comply with particular
statutory limits.
ADS further points to ADT I and ADT II. It argues that
those cases must have recognized an implied right of action,
because they addressed thoroughly ADS and other alarm-sys-
tem providers’ District Act claims, which were similar to the
ones ADS brings in this case. Again, no party raised the right-
of-action argument that now comes to our attention. “[U]nex-
amined assumptions of prior cases do not control the disposi-
tion of a contested issue.” Stanek v. St. Charles Cmty. Unit Sch.
Dist. No. 303, 783 F.3d 634, 640 (7th Cir. 2015); see also Fowler
v. Butts, 829 F.3d 788, 792 (7th Cir. 2016); United States v. Ro-
driguez-Rodriguez, 453 F.3d 458, 460 (7th Cir. 2006).
ADS, finally, claims estoppel: that the defendants should
be estopped from arguing that there is no right of action be-
cause Tyco’s predecessor litigated and prevailed in ADT I and
ADT II. The district court rejected that argument. It reasoned
that no party, on either side, raised the right-of-action issue in
ADT I or ADT II; Tyco did not embrace a side in that litigation
that would now lead to unjust results; and it would be espe-
cially unfair to impose estoppel against Orland Fire, which
was not a party in ADT I or ADT II. Estoppel is a discretionary
call in the district court’s purview. See, e.g., United States v.
Trudeau, 812 F.3d 578, 584 (7th Cir. 2016). And the district
court’s sound reasoning was well within its discretion.
The limits of our holding should be noted. We do not fore-
close any implied right of action in the District Act. But the
District Act gives no reason to oblige ADS’s claim, premised
on enforcing competition in the alarm-system market.
12 No. 18-2926
B. The Sherman Act
The district court also found for the defendants on ADS’s
Sherman Act claims. See 15 U.S.C. §§ 1, 2. It concluded that
ADS’s exclusion from the market was the result of the Ordi-
nances, not the defendants’ anticompetitive behavior. Be-
cause that decision came after a trial, we review the court’s
legal conclusions de novo and its factual findings for clear er-
ror. ARC Welding Supply Co, Inc. v. Am. Welding & Gas, Inc., 924
F.3d 322, 325 (7th Cir. 2019).
Fisher v. City of Berkeley, 475 U.S. 260 (1986), holds that re-
straints on trade that are unilaterally imposed by the govern-
ment do not form the basis of a § 1 claim. See, e.g., Flying J, Inc.
v. Van Hollen, 621 F.3d 658, 662–65 (7th Cir. 2010). Fisher’s facts
concerned a local ordinance that set a mandatory rent ceiling
for landlords. Landlords sued, arguing, in part, that the Sher-
man Act preempted the local, anticompetitive ordinance. The
Supreme Court accepted that the ordinance was anticompeti-
tive but disagreed that it violated the Sherman Act. The gov-
ernment’s ordinance mandated the landlords’ effective price
fixing, and thus, there was no anticompetitive meeting of the
minds for § 1 purposes. Id. at 266–67. The ordinance was at
fault, not whatever anticompetitive conduct necessarily fol-
lowed. Id.
Fisher distinguished such unilateral restraints from “hy-
brid” restraints, which do fall under § 1. The difference be-
tween the two, according to Fisher, is the extent of the govern-
ment’s command. If the government exercises “complete con-
trol” through the restraint, the conduct is not coordinated. Id.
at 269. If, on the other hand, private parties are granted “a de-
gree of private regulatory power,” pursuant to which they be-
have anticompetitively, “the regulatory scheme may be
No. 18-2926 13
attacked under § 1.” Id. at 267–68 (quoting Rice v. Norman Wil-
liams Co., 458 U.S. 654, 666 n.1 (1982)); see also AREEDA &
HOVENKAMP, ANTITRUST LAW: AN ANALYSIS OF ANTITRUST
PRINCIPLES AND THEIR APPLICATION ¶ 217 (2018 ed.) (“key” to
Fisher is whether the government exercised “direct” control
under the regime). Fisher contrasted the rent-control ordi-
nance, a unilateral government action, with a hybrid restraint
it had addressed before: local laws that require liquor distrib-
utors to set shared prices, but do not set what those prices are.
Id. at 268–69 (citing California Retail Liquor Dealers Ass’n v.
Midcal Aluminum, Inc., 445 U.S. 97 (1980); Schwegmann Bros. v.
Calvert Distillers Corp., 341 U.S. 384 (1951)); see also 324 Liquor
Corp. v. Duffy, 479 U.S. 335 (1987) (similar, post-Fisher hybrid
restraint).
Fisher’s teachings control here. It is true that, unlike
Fisher’s rent-control ordinance, the Villages’ Ordinances do
not, on their face, mandate the challenged anticompetitive
conduct—exclusivity with Tyco. But we do not see why that
distinction matters here. Fisher was concerned with a law’s co-
ercive effect, not its facial interpretation. See 475 U.S. at 266–
67; see also Costco Wholesale Corp. v. Maleng, 522 F.3d 874, 890
(9th Cir. 2008) (Fisher applies when “the potential anti-com-
petitive effect is not the result of private pricing or marketing
decisions, but the logical and intended result of the statute it-
self”) (emphasis added). As long as the law “leave[s] nothing
further to be decided” by private parties, there can be no con-
certed action. AREEDA & HOVENKAMP, ANTITRUST LAW
¶ 221e4.
Here, the district court found, after carefully reviewing the
record evidence and hearing testimony, that implementing an
RSS protocol, which the Ordinances do mandate on their face,
14 No. 18-2926
required an exclusive arrangement with an alarm-system pro-
vider. This was true, according to the district court, as a tech-
nological and economic matter. Radio signals operate on one
frequency that is licensed by a provider. So to ensure that ac-
counts can send signals directly to the dispatch center, as an
RSS protocol requires, the accounts and the center must share
a provider—that is, there must be exclusivity. That exclusiv-
ity, moreover, could come as no surprise to the Villages. Ex-
clusivity was the status quo under Orland Fire’s previous
RSS-mandating ordinance. Fisher therefore dictates that the
defendants did not violate § 1.
In contending otherwise, ADS insists that its alternative
modes can operate in an RSS protocol and, thus, comply with
the Ordinances. We are skeptical about the practical feasibility
of those alternatives. Automatic retransmission in fact means
that the signal goes first to the CSS and second to the RSS,
however quickly. See ADT II, 724 F.3d at 868. More troubling,
a ruling that requires the market’s participants to make fre-
quency-sharing available, as ADS seems to request, would
mean demanding that Tyco sublicense its frequencies to its
competitors. Antitrust law usually frowns upon such duties
to deal. See Pac. Bell Tel. Co. v. Linkline Commc’ns, Inc., 555 U.S.
438, 450 (2009); Verizon Commc’ns Inc. v. Law Offices of Curtis V.
Trinko, LLP, 540 U.S. 398, 410 (2004).
We can set aside that skepticism, though, because again
the district court’s factual findings resolve the question for us.
The district court considered these alternatives—and rejected
them. The court found that ADS had not supported its claim
that retransmission can comply with an RSS system. It further
found that the evidence of ADS’s retransmission capabilities
were “at best inconclusive.” And as to frequency sharing, the
No. 18-2926 15
district court found that it was flawed. The sublicensing com-
pany could not monitor the signals for trouble or maintenance
alerts, a critical part of the alarm-system business. ADS shows
no clear error in those findings.
ADS makes another argument. Even if the Ordinances ef-
fectively mandate exclusivity, ADS argues, they do not con-
trol the prices Orland Fire and Tyco charge. Thus, according
to ADS, the Ordinances impose at most a hybrid restraint, be-
cause the governmental command is not complete. We agree
with the factual premise but not the conclusion. The Ordi-
nances do not speak to pricing, it is true, but the anticompeti-
tive conduct ADS’s claim challenges is not inflated prices.
Tyco’s exclusivity is what caused ADS’s asserted antitrust in-
jury—exclusion from the market—not high prices, which
ADS of course does not pay. Accord O.K. Sand & Gravel, Inc. v.
Martin Marietta Techs., Inc., 36 F.3d 565, 572 (7th Cir. 1994)
(“increased prices” cause competitors “no injury, let alone an-
titrust injury”).
ADS also insists that the district court misread the Ordi-
nances, which led it to find that Fisher applied. The district
court, however, did not decide that the Ordinances on their
face require an exclusive arrangement. Instead, the court
found, based on the evidence, that an exclusive arrangement
was the only feasible way to carry out the RSS model that the
Ordinances mandate. A different case, with different evi-
dence, may prove differently. But nothing in this record
shows that the district court’s findings were in clear error.
Fisher thus resolves ADS’s § 1 claim—and it resolves the
§ 2 claim as well. Section 2 prohibits monopolization, or the
attempt at it, through willful, anticompetitive conduct. E.g.,
Mercatus Grp., LLC v. Lake Forest Hosp., 641 F.3d 834, 854 (7th
16 No. 18-2926
Cir. 2011). The only willful conduct cited by ADS is the exclu-
sivity arrangement. But for reasons just explained, that con-
duct was not willful under Fisher; it was effectively required
by the Ordinance. See Englert v. McKeesport, 872 F.3d 1144,
1150 (3d Cir. 1989) (applying Fisher to exclusive-dealing
claims under both § 1 and § 2).
One final note. ADS worries that without introducing
competition against Tyco the alarm-system market will stag-
nate; Tyco will have little reason to innovate and more flexi-
bility to charge high prices. We are not unsympathetic to the
point, in theory. But ADS had its chance at trial to demon-
strate to the district court that its alternative methods can
work in an RSS system, and it did not. And no one should lose
sight of the fact that competition for the exclusive contract is
competition. Paddock Publ’ns, Inc. v. Chicago Tribune Co., 103
F.3d 42, 47 (7th Cir. 1996). Orland Fire and Tyco’s deal has
only a one-year, renewable term, and nothing we know of
forecloses ADS from making a bid to Orland Fire for another
deal.
C. The Fourteenth Amendment
The district court further found for Orland Fire on ADS’s
substantive due process claims. This decision, like the Sher-
man Act decision, came in the posttrial ruling, so we review
the legal conclusions de novo and the factual findings for
clear error. ARC Welding Supply, 924 F.3d at 325.
Because ADS does not invoke a fundamental right, the ex-
clusion of ADS from the Schaumburg market need only be ra-
tionally related to a legitimate government interest. Washing-
ton v. Glucksberg, 521 U.S. 702, 727 (1997); Hayden ex rel. A.H.
v. Greensburg Cmty. Sch. Corp., 743 F.3d 569, 576 (7th Cir. 2014).
No. 18-2926 17
This is a lenient standard, and laws challenged under ra-
tional-basis review carry a “strong presumption of validity.”
Minerva Dairy, Inc. v. Harsdorf, 905 F.3d 1047, 1053 (7th Cir.
2018); Goodpaster v. City of Indianapolis, 736 F.3d 1060, 1071 (7th
Cir. 2013).
ADS’s substantive due process claim can be easily re-
jected. It asserts that Orland Fire has acted arbitrarily and ir-
rationally by going with an exclusive provider rather than en-
tertaining ADS’s efforts at alternative, RSS-compliant meth-
ods. But ADS accepts that the Ordinances are lawful. And for
reasons explained in the last section, we have no reason to dis-
turb the district court’s sound findings that the Ordinances
effectively require Orland Fire to work with an exclusive pro-
vider. There was thus a rational basis for Orland Fire to
choose an exclusive provider—abiding by municipal com-
mand.
III. Conclusion
For these reasons, we affirm the district court’s judgment.