Antitrust Law Daily Wrap Up, ANTITRUST—N.D. Ill.: “Co-operative” of municipalities, fire protection districts could intervene in security firm’s antitrust suit, (Aug 21, 2014)

By Greg Hammond, J.D.

Alarm Detection Systems, Inc. (ADS) was unable to stop DuPage Public Safety Communications (Du-Comm)—a co-operative venture formed by 17 municipalities and 22 fire protection districts—from intervening in its antitrust suit against a number of fire protection districts and security companies. In granting Du-Comm’s motion to intervene, the federal district court in Chicago determined that the co-operative had the capacity to sue or be sued (Alarm Detection Systems, Inc. v. Bloomingdale Fire Protection District, August 20, 2014, Durkin, T.).

Background. ADS filed suit against Bloomingdale Fire Protection District and others, alleging—in part—violations of federal antitrust statutes. The company also asserted that, “[a]ny relief sought against Bloomingdale would apply to its alter ego [Du-Comm], as [Du-Comm] has no legal status and could be bound in any event as a third party if it were a separate legal entity.” Du-Comm is a co-operative venture that provides services to 17 municipalities, including a central 911 dispatch services location. The co-operative moved to intervene in the ADS’ action, and ADS opposed the motion.

Capacity to be sued. Fed. R. Civ. P. 17(b) requires that a party in litigation have the “capacity to sue or be sued.” The rule also provides that “unincorporated associations” have the capacity to be sued. However, ADS—in its opposition to Du-Comm’s motion to intervene—argued that Du-Comm does not have the capacity to sue or be sued, as there is no statutory authority for a “co-operative venture” to exist as an independent legal entity.

The court disagreed with ADS’ argument, noting that the company admits Du-Comm satisfies the Illinois Intergovernmental Cooperation Act’s (IICA) definition of a public agency. Although there is no specific authority that states an entity or public agency formed under the IICA is an “unincorporated association,” the court gave weight to the Seventh Circuit Court of Appeals’ decision allowing Du-Comm to intervene in another ADS case, which is central to the claims in this case. In addition, the court noted that Du-Comm’s charter agreement provides the co-operative with the ability to enter into contracts in its own name; employ agents and employees; acquire, hold and dispose of property; and incur debts and liabilities for accomplishing its purposes. Consequently, the court concluded that these facts support Du-Comm’s capacity to be sued, and granted the co-operative’s motion to intervene.

The case number is 14 C 876.

Attorneys: David Joel Bressler (Dykema Gossett Rooks Pitts PLLC) for Alarm Detection Systems, Inc. Ericka J. Thomas (Ottosen Britz Kelly Cooper Gilbert & DiNolfo, Ltd.) for Bloomingdale Fire Protection District

Companies: Alarm Detection Systems, Inc.; Bloomingdale Fire Protection District

Cases: Antitrust IllinoisNews