I agree with the court. Public services like these are paid for with local/state taxes and is theoretically suppose to cover labor and overtime fees for their own employees. It would set a bad precedent if public service officials could sue you for money spent everytime they help you (police, fire).
This part:
“When we started this case, we knew it was an uphill battle given the free public services doctrine defense that we knew Colgan would put up to resist the recovery claim,” he said. “We’re glad we made the effort and we respect the court’s ruling, although we disagree with it.”
Translation:
"We knew we wouldn't win, because there's a free public services DOCTRINE already in place, but anything that gets me a few more hours of legal fees is worth it..."