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A St. Joseph County judge has denied South Bend Chocolate Co.’s request for a preliminary injunction, clearing the way for a new concessionaire at South Bend International Airport to take over June 1.
If granted, the injunction would have allowed the local chocolatier to remain at the airport, pending the conclusion of a lawsuit over the selection of South Dakota-based Sky Dine as the airport’s new master concessionaire.
The ruling closes a significant chapter in a legal dispute that began after the St. Joseph County Airport Authority awarded its concession contract to Sky Dine. South Bend Chocolate Co. had operated at the airport under a Concessionaire Operator Use and Lease Agreement since May 2014. That agreement, along with its extensions, expires in five days on May 31.
“Officials at South Bend International Airport are pleased with the Court’s ruling denying South Bend Chocolate Company’s request for preliminary injunctive relief,” an airport spokesperson said in an email to Inside INdiana Business. “The Court’s decision allows the Airport to continue moving forward with its planned transition to the new concession operator and the expanded dining and retail experience designed to better serve the traveling public and our growing passenger base.”
In her order, Judge Jenny Pitts Manier rejected each of the four factors courts typically weigh when deciding whether to grant preliminary injunctive relief.
The court found that South Bend Chocolate Co.’s central legal argument did not hold up on the question of likelihood of success on the merits. Plaintiffs had cited Indiana Code Title 5-22, the state’s Public Purchasing Act, as the governing framework for the airport’s selection process and as the basis for their right to judicial review. The court disagreed, finding that Indiana Code Title 8, Chapter 22 governed the airport’s process instead. Because concessionaire services are a provision of services rather than a procurement of goods or construction of a public works project, the court found the Title 5 framework did not apply. That means the concession contract was not required to be awarded to the lowest bidder.
The court also rejected the irreparable harm argument. South Bend Chocolate Co. argued it would suffer irreparable injury by being displaced from the leased premises and forced to abandon fixtures and improvements it had made over the years. Judge Manier noted those consequences were spelled out clearly in the lease agreement the company had signed and renewed. The court said any remedy for unconscionable terms would be monetary damages, not continued occupancy.
On the balance of harms, the court found the financial exposure to the airport if an injunction were granted outweighed the harm to South Bend Chocolate Co. if it were not. The order noted the airport’s potential liability could include claims from the incoming concessionaire for lost profits extending well into the future. The court also found that an orderly transfer of concession operations served public interest.
The underlying complaint by South Bend Chocolate Co. and its owner, Mark Tarner, remains pending. Tarner issued the following statement to Inside INdiana Business:
“We’d hoped an injunction would buy us time and allow our suit to move forward without damaging us, the Airport and our customers. The judge made a decision based on the lease agreement we had with the Airport,” Tarner said. “She did not rule on whether or not the bidding process was fair and legal. This ruling is just the first step in a process that we hope will reveal the truth about how the process unfolded and validate our position.”
Sky Dine expects to launch its pre-security Dunkin’ location by June 1 with other offerings including two full-service, post-security The Lauber locations, a post-security Dunkin’ location and a post-security Jimmy John’s location expected to follow in the coming months.
“This transition is focused on improving the customer experience, expanding options, and ensuring the Airport continues to meet the needs of record passenger growth,” airport officials said.
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