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SOUTH BEND, Ind. – South Bend Chocolate Co. and founder Mark Tarner are pushing back against the St. Joseph County Airport Authority’s bid to dismiss their lawsuit, filing an 18-page response late Friday accusing the airport’s selection committee of fraud, collusion and a biased process that denied the local chocolatier fair consideration of its proposal to remain the airport’s master concessionaire.
The response, filed the same day the airport authority sought dismissal, argues the airport’s motion for judgment on the pleadings should be denied because the company has a case that has not yet been fully heard on its merits.
The lawsuit stems from the airport’s selection of South Dakota-based Sky Dine as its new master concessionaire. South Bend Chocolate Co. had operated as the airport’s sole concessionaire since May 2014, providing food, beverage, retail and vending services in the terminal.
South Bend Chocolate Co. had sought a preliminary injunction that would have prevented Sky Dine from taking over, but that request was denied.
At the core of South Bend Chocolate Co.’s argument is a dispute over which Indiana statutes govern the airport’s concession selection process. The airport authority has maintained that Indiana Code Title 8 exempts it from the state’s public purchasing requirements.
The company’s attorney, James Masters, counters that the airport misread the applicable statutes and that Indiana Code Section 8-22-3-12 expressly requires the airport to follow public purchasing laws for contracts involving improvements and purchases.
Masters argues the airport’s reliance on Indiana Code Section 8-22-3-11(a)(20) is misplaced because the provision it cited applies only to the airport authority established by the city of Gary, not to the St. Joseph County Airport Authority.
The filing also challenges the airport’s claim that the concession contract falls under the definition of “services” exempt from public bidding requirements. Because the contract required the winning vendor to finance and construct leasehold improvements, fixtures, furnishings, equipment and signage, South Bend Chocolate Co. argues the scope of work goes well beyond what Indiana law defines as services and squarely into the category of improvements and purchases subject to competitive procurement rules.
“South Bend International Airport continues to stand by the process it used to select a master concessionaire,” a spokesperson for the airport said in an email to Inside INdiana Business. “The formal, fair, and transparent process has led to expanded and reimagined concession offerings for the traveling public. We will continue to let the legal process play out in court.”
On the question of standing, South Bend Chocolate Co. argues it and Tarner qualify for judicial review not merely as unsuccessful bidders but as citizens and taxpayers of the airport authority’s taxing district, a distinction Indiana courts have recognized as conferring standing to challenge public contract awards.
The filing raises additional and more serious allegations. The company alleges the airport authority’s selection committee presented a biased summary of proposals to the board rather than the full submissions, and that the board was influenced by false representations made by SkyDine.
Specifically, the filing alleges SkyDine misrepresented to board members that it had already entered into an agreement with South Bend Chocolate Co. to purchase and market its products at the airport and at other airports nationally. The filing claims those representations were false and that some board members cited the purported partnership as a reason the company would not suffer significant financial harm from losing the contract.
Meanwhile, Sky Dine officially starts its contract with the airport today. During construction, travelers will have access to temporary food and beverage service, including breakfast sandwiches, omelets, burgers, sandwiches and a full bar.
The first wave of permanent concessions is expected to open later this summer. That includes national sandwich chain Jimmy John’s, which will operate post-security across from Gate 8, as well as Dunkin’, which will have locations both pre-security near the South Shore Line platform and post-security across from Gate 6. The airport also expects to open The Lauber Overlook, a post-security bar and lounge featuring cocktails and light bites.
Additional concepts are scheduled to debut later in the year. Bend Market & Brews, a retail and dining concept featuring local brands, snacks and casual dining, is expected to open in fall 2026 by baggage claim. The airport also plans to open SBN Market in fall 2026, offering grab-and-go food, travel essentials and self-checkout service across from Gate 5.
The largest project, The Lauber, a full-service restaurant inspired by the downtown South Bend eatery, is anticipated to open in spring 2027. But completion dates are subject to change.
South Bend Chocolate Co. is asking the court to set aside the contract award, remand the matter to the airport authority for a do-over based on lawful criteria and award damages for its losses. The company also raised an Indiana antitrust claim, arguing that collusion between the selection committee and SkyDine voided the contract award.
The case remains pending in St. Joseph Superior Court.
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