By Associated Press - Thursday, April 27, 2017

SIOUX FALLS, S.D. (AP) - An appeals court has revived a lawsuit filed by a small energy drink company with South Dakota origins against former food giant Sara Lee.

The Argus Leader ( ) reports that a three-judge panel with the Fifth Circuit Court of Appeals in Texas ruled that a state district court judge wrongly dismissed claims made by the company, Jacked Up.

The lawsuit argues that Jacked Up founder Joseph Schmitz signed a licensing agreement with Sara Lee that entitled it to royalties on sales of the product and sales to Sara Lee. Three weeks later, Sara Lee sold its beverage division to the J.M. Smucker Company, which terminated the contract with Jacked Up. Part of the Sara Lee company later became Hillshire Brands, which in turn was bought by Tyson Foods.

Schmitz sued Sara Lee for breach of contract, breach of fiduciary duty, fraud and fraudulent inducement. The suit also named Smucker for interfering with the lawsuit and trade secret misappropriation.

Sara Lee argued it was willing to go forward with the energy drinks but Jacked Up violated the agreement, but Schmitz said Greg Immell, then an executive with Sara Lee, called to terminate the deal.

The judges believed Schmitz’s account.

“Schmitz’s account is corroborated by an internal Sara Lee email dated October 26, 2011, suggesting that Immell had told Schmitz that the licensing agreement would be terminated and that Schmitz ‘was not too happy,’” the judges wrote.

The ruling allows Jacked Up to move forward with the lawsuit.

Last year, Schmitz was jailed in South Dakota’s Lake County in connection to the shooting death of his fiancee at the Lake Madison home they rented.


Information from: Argus Leader,

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