ADT Security Services, Inc. et al v. Lisle-Woodridge Fire Protection District, The et al
Filing
207
MEMORANDUM Opinion and Order Signed by the Honorable Milton I. Shadur on 8/23/2011:Mailed notice(srn, )
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
ADT SECURITY SERVICES, INC.,
et al.,
Plaintiffs,
)
)
)
)
)
)
)
)
)
)
)
v.
LISLE-WOODRIDGE FIRE
PROTECTION DISTRICT, et al.,
Defendants.
No.
10 C 4382
MEMORANDUM OPINION AND ORDER
After extended litigation and a thorough vetting of the
issues by the parties and by this Court itself, it issued a
July 20, 2011 memorandum opinion and order (“Opinion”) granting a
partial summary judgment against Lisle-Woodridge Fire Protection
District (“District”) calling for a permanent injunction, which
was then issued on August 16.
As District’s counsel had
announced during the most recent court sessions addressing the
appropriate terms of that injunction, District has now filed a
motion to stay its enforcement.
This memorandum opinion and
order explains why the motion is without merit and must be
denied.
As this Court has repeatedly explained during the course of
this litigation, this case involves an act of illegal selfaggrandizement by a fire protection district.
Heedless of the
fact that the Illinois General Assembly has carefully
circumscribed the powers of fire protection districts in the
course of creating them and defining the scope of their
authority,1 District has treated itself as though it were some
sort of general legislative body, with wide-ranging power to
expand its own authority beyond the boundaries set by its
creator.
That violation of fundamental principles by District in
trampling on the rights of companies going about their legitimate
business of providing alarm security services led this Court to
enter a preliminary injunction (presently on appeal) and now the
permanent injunction.
District’s counsel begin their argument for a stay in a
manner that has regrettably typified too many of their legal
arguments during the course of this litigation--they
impermissibly reframe the operative legal principles in a way
that seeks to ease their burden of persuasion.
Thus their Motion
at 2, in stating the factors to be considered as to the grant or
denial of a stay of a permanent injunction order, lists the first
and vitally important factor, as reported in the per curiam
decision in Etherly v. Schwartz, 590 F.3d 531, 532 (7th Cir.
2009), as “likelihood of success on appeal”--but the actual
language in Etherly requires “a strong showing that it is likely
to succeed on the merits of its appeal.”
1
Indeed, on that score
That restrictive approach has consistently been followed
by the Illinois courts, which have regularly refused to grant
implied authority to such districts, or to read general statutory
language expansively, where express authority has not been
conferred by the legislative provisions.
2
Etherly expressly cited the Supreme Court’s decision in Hilton v.
Braunskill, 481 U.S. 770, 776 (1987), which has definitively
stated the factors in these terms:
Different Rules of Procedure govern the power of
district courts and the courts of appeals to say an
order pending appeal. See Fed. Rule Civ. Proc. 62(c);
Fed. Rule App. Proc. 8(a). Under both Rules, however,
the factors regulating the issuance of a stay are
generally the same: (1) whether the stay applicant has
made a strong showing that he is likely to succeed on
the merits; (2) whether the applicant will be
irreparably injured absent a stay; (3) whether issuance
of the stay will substantially injure the other parties
interested in the proceeding; and (4) where the public
interest lies.
This Court will of course be governed by those standards, not by
District’s watered-down version.
And in those terms the analysis
shows that District’s presentation is skewed, effectively turning
those factors topsy-turvy.
It may be worth spending a moment to think about why such a
set of standards is called for.
Remember that in the case of a
money judgment Fed. R. Civ. P. (“Rules”) 62(a) and 62(d) call for
an automatic stay on the posting of a supersedeas bond, so that
the prevailing plaintiff is spared any risk of defendant’s
insolvency or of other uncollectibility of the judgment--only
delay in collection is involved, and the addition of interest is
viewed as compensating for that delay.
But where injunctive
relief is involved, Rule 62(a)(1) reverses the presumption of an
automatic stay by requiring the appellant to obtain an express
court order.
3
That approach recognizes the fact that the harm inflicted by
a stay against a prevailing plaintiff is often irreparable or, at
a minimum, may be difficult to quantify despite its real-world
impact.
No good reason justifies imposing that risk on the party
that has prevailed after fighting out the issues on the merits.
Hence the courts have developed the quoted four-factor test to
promote reasonable analysis of the issues.
As for District’s need to make the requisite strong showing
of success on its appeal, the Opinion has provided chapter and
verse on the absence of merit in District’s illegal power grab,
and there is no need to repeat that analysis here.
Moreover, it
is surely worth noting (as Opinion at 1 n.2 pointed out) that
District had earlier sought a stay in pursuit of its appeal from
this Court’s preliminary injunction order, and our Court of
Appeals’ December 28, 2010 order denying such a stay stated:
The appellant has not presented arguments that
demonstrate a likelihood of success on appeal or
irreparable injury absent a stay.
This Court is not of course presuming to predict the
ultimate conclusion on the merits by the Court of Appeals.
Instead it emphasizes that now all of the votes are in and the
ballots counted, and the Opinion has awarded summary judgment
against District.
Its likelihood of success cannot reasonably be
viewed as having been enhanced by that ruling, entered after
considering all of the evidence adduced by each side.
4
Simply to state the “strong showing” hurdle that District
must overleap underscores its lack of success in that regard.
Although a defendant’s failure on that element is of course not
controlling (all of the Hilton-prescribed factors must be
considered--see, e.g., Cavel Int’l, Inc. v. Madigan, 500 F.3d
544, 547 (7th Cir. 2007)), it certainly bulks large in the
sliding-scale approach (id.) that is called for in considering
the several criteria.
Indeed, Nken v. Holder, 129 S.Ct. 1749,
1761 (2009) has most recently made it clear that “[t]he first two
factors of the fractional standard are the most critical.”
This Court will leave it to the prevailing alarm companies
to deal with the ultimate merits on appeal--to provide the
detailed reasons for affirmance on appeal (including their take
on the reasons for denying a stay).2
But this Court is
constrained to comment briefly on one particularly egregious
contention advanced by District’s counsel.
District’s Mem. 4 criticizes the preliminary injunction’s
2
This opinion was written promptly after this Court
received District’s motion and supporting memorandum, in order to
be ready for issuance on District’s self-scheduled presentment
date. Then, immediately before such presentment, the alarm
companies weighed in with their memorandum in opposition.
Because as explained here District’s motion carries its own death
warrant, the issuance of this opinion has not been delayed by any
effort to incorporate the numerous added flaws in District’s
position identified in the alarm companies’ presentation. Their
highly persuasive additional arguments will doubtless be
presented to the Court of Appeals when District seeks to pursue
its attempt to obtain a stay before that court.
5
declaration that “customers’ contracts with the District were
null and void and their contracts with their previous alarm
monitoring companies were reinstated as though never terminated.”
That position is extraordinary, given the fact that the so-called
termination of the customers’ contracts with the alarm companies
was the result of District’s own totally illegal declaration that
those contracts were “null and void.”
What the injunctive relief
has done is simply to restore the status quo that was in place
before that unlawful action.
District’s current bootstrapping
effort is reminiscent of nothing more than the proverbial plea by
a child who, having killed both parents, asks for judicial mercy
because he is an orphan.
To shift now to the second Hilton-prescribed factor, a full
consideration of that “irreparable harm” factor confirms that the
label better describes the impact on the alarm companies if a
stay is granted.
Any such grant would continue to bar them from
carrying on a legitimate business that they have long pursued--a
business in which the equivalent of Newton’s first law of motion
operates to continue most customer contracts in effect for many
years despite the fact that they literally span specific time
periods, subject to automatic renewal if no notice of termination
has been given effective as of the end of the specified term.
That customer goodwill factor was interrupted by District’s highhanded “null and void” ukase, and the restoration of the status
6
quo via the permanent injunction would be thwarted by issuance of
a stay.
By contrast, in considering the asserted harm to District
from denial of a stay, it must first be observed that any wounds
District may suffer in that respect were self-inflicted by its
unauthorized entry into the alarm monitoring business.
But that
aside, the alarm companies have committed themselves to arranging
for and cooperating in an orderly transition that will clearly
avoid what District’s scare tactics describe as “a logistical
nightmare.”
Nothing suggests that the alarm companies will not
live up to their commitments for a smooth transition that, it
will be remembered, returns the parties to the true status
quo--the situation that existed before the dispute was triggered
by District’s unilateral decision to upset long-standing business
relationships.
In sum, any comparative analysis of the harms flowing, or
assertedly flowing, from the denial or granting of a stay comes
down substantially on the alarm companies’ side of that
comparison.
And when that is coupled with the likelihood-of-
success factor discussed earlier, the sliding scale is weighted
heavily on the side of denial of a stay.
Lastly, the public interest factor also points against
rather than toward the granting of a stay.
Once more District is
on more than shaky ground in pointing to potential customer anger
7
and confusion as a factor, when any such potential is directly
ascribable to the actions taken by District itself.
And
District’s claimed bugaboo of endangering the health and safety
of the alarm monitoring system customers glosses over--or more
accurately ignores entirely--the record’s silence as to any such
risks during the years that the independent alarm companies have
been providing their services to consumers within the fire
protection district.
Conclusion
This one is really no contest.
Analysis of the criteria for
granting a stay of the permanent injunction here, which is
concededly not the norm under Rule 62(a)(1), heavily favors the
alarm companies.
Accordingly District’s motion for a stay of the
permanent injunction order is denied.
________________________________________
Milton I. Shadur
Senior United States District Judge
Date:
August 23, 2011
8
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?