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Anti-trust Violation

By: Derek Hawkins//August 12, 2019//

Anti-trust Violation

By: Derek Hawkins//August 12, 2019//

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7th Circuit Court of Appeals

Case Name: Alarm Detection Systems, Incorporated, et al. v. Village of Schaumburg, et al.

Case No.: 18-3316

Officials: WOOD, Chief Judge, and SCUDDER and ST. EVE, Circuit Judges.

Focus: Anti-trust Violation

This appeal is one of two we decide today regarding the market for commercial fire‐alarm services in Chicago’s suburbs. The current case takes us to the Village of Schaumburg.

In 2016, Schaumburg passed an ordinance that requires commercial buildings to send fire‐alarm signals directly to the local 911 dispatch center. That decision, sensible as it may seem, comes at an economic cost: as implemented, the ordinance threatens to exclude from the market all but one alarm‐ system provider. This is because the area’s dispatch center, Northwest Central Dispatch System (“NWCDS”), has an al‐ most decade‐old exclusive arrangement with Tyco Integrated Security, LLC. To send signals to NWCDS, then, local buildings must also use Tyco equipment—or at least that is what Schaumburg has told local building owners.

A few of Tyco’s competitors (the “Alarm Companies” or “Companies”) see in these facts a profit‐driven conspiracy among Schaumburg, NWCDS, and Tyco to centralize the local market for fire‐alarm services. The Alarm Companies filed this suit charging violations of constitutional, antitrust, and state tort law. The district court, however, dismissed the case, concluding that the complaint’s allegations failed to state a claim.

We agree in large part. With one exception, the claims, and the underlying conspiracy, are not pleaded with enough facts to cross the line from speculative to plausible. We therefore affirm in large part and reverse and remand in part.

Affirmed in part. Reversed and remanded in part.

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Derek A Hawkins is trademark corporate counsel for Harley-Davidson. Hawkins oversees the prosecution and maintenance of the Harley-Davidson’s international trademark portfolio in emerging markets.

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