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A St. Joseph Superior Court judge has dismissed South Bend Chocolate Co.’s lawsuit challenging the selection of a new master concessionaire at South Bend International Airport, ruling the airport authority had legal authority to award the contract.
Judge Jenny Pitts Manier granted the St. Joseph County Airport Authority’s motion for judgment on the pleadings and dismissed the case with prejudice in an order issued Aug. 19. The ruling followed a July hearing on the airport authority’s request to dismiss the case.
The lawsuit stemmed from the airport’s decision to award its master concessionaire agreement to South Dakota-based Sky Dine. South Bend Chocolate, which had operated concessions at the airport since 2014, lost its bid to retain the contract. Its previous concession agreement and lease expired May 31.
“South Bend International Airport is pleased with the judge’s ruling regarding the lawsuit brought by South Bend Chocolate Company pertaining to concession operations,” an SBN spokesperson said in an email to Inside INdiana Business. “From the beginning, we strongly disagreed with the claims being made and were confident that the selection process was done in full accordance with the law. We are excited to provide a broad mix of new offerings.”
At the center of the dispute was which law governed the airport authority’s selection process.
The court sided with the airport authority, finding the process was governed by statutes in Title 8 of the Indiana Code, which specifically address airport authorities. The law gives airport authorities broad powers to manage airport facilities, lease airport property and negotiate contracts related to airport operations.
The judge found that the master concessionaire agreement was a contract for professional services, specifically concession management services. The lease provided the concessionaire with space within the airport’s facilities to carry out those services. Because the agreement was for services rather than the procurement of goods or construction, the judge found the Indiana Public Purchasing Act and its lowest-bid requirements did not apply.
That distinction also affected South Bend Chocolate Co.’s request for judicial review. The company had filed its petition under a provision of the Public Purchasing Act. Because the court determined the airport authority’s decision was made under Title 8 rather than Title 5, it found the law did not authorize the company’s petition for judicial review.
The ruling further found that South Bend Chocolate Co. President Mark Tarner did not have standing to bring the lawsuit as a taxpayer because the transaction was not a purchase of goods.
The court also said South Bend Chocolate Co. had no statutory right to have its expired lease renewed or to have its bid accepted. Even if the bidding process were conducted again, the judge noted there was no guarantee South Bend Chocolate Co. would win the contract.
Inside Indiana Business reached out to Tarner for comment and had not yet received a response by the time of publication.
Sky Dine plans to bring in full-service dining through The Lauber, a local brand, as well as Jimmy John’s and two Dunkin’ locations. The gift shop will be reimagined as Bend Market & Brews, to include food service, a bar and retail. A new concession area between gates 6 and 7 will add additional dining and bar service by the windows.
Within the next 30 days, three new concession areas will open post-security at the airport while construction continues on the remainder of the spaces.
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