They were unambiguously violating state law intended to prevent this exact scenario when they were sharing the data with the federal government. Some lawyer is going to be having a bad year and a black mark on their resume if they didn't have a statutory breach clause in the contract with a city government and even if such a clause doesn't exist there is an extremely strong case for it regardless.
They have self-inflicted a business disaster upon themselves for doing that in a state like Illinois. In the event this holds up under that legal theory every municipality in the state has a case to dump them, to say nothing of getting new contracts there and in any place that has the same values.