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Adt Security Services, Inc., et al v. Lisle-Woodridge Fire Protection District

August 23, 2011


The opinion of the court was delivered by: Milton I. Shadur Senior United States District Judge


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 self-aggrandizement 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,*fn1 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." Indeed, on that score 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.

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.

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).*fn2 But this Court is constrained to comment briefly on ...

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