United States District Court, D. South Dakota, Southern Division
PERFETTI VAN MELLE USA, INC., AND PERFETTI VAN MELLE BENELUX B.V., Plaintiffs,
MIDWEST PROCESSING, LLC, AND DEXTER JORGENSEN, Defendants
Perfetti Van Melle USA Inc., Perfetti Van Melle Benelux B.V.,
Plaintiffs: Aaron M. Bernay, LEAD ATTORNEY, PRO HAC VICE,
Frost Brown Todd, LLC, Cincinnati, OH; Michael L. Luce, LEAD
ATTORNEY, Lynn, Jackson, Shultz & Lebrun, P.C., Sioux Falls,
OPINION AND ORDER GRANTING
A. LANGE, UNITED STATES DISTRICT JUDGE.
Perfetti Van Melle USA, Inc. and Perfetti Van Melle Benelux
B.V. (collectively, " Perfetti" ) arranged through
a third party for Defendants Midwest Processing, LLC ("
Midwest" ) and Dexter Jorgensen (" Jorgensen"
) to recycle candy that Perfetti had manufactured but deemed
unsalable. Perfetti moved for a temporary restraining order,
preliminary injunction, and a permanent injunction against
Defendants after learning that Defendants had diverted the
candy to retail stores for sale rather than recycling it. For
the reasons explained below, this Court grants Perfetti's
motion for a preliminary injunction.
Court draws the facts from the Verified Complaint, the
sworn declarations filed by Perfetti, and the testimony and
exhibits from the hearing on May 28, 2015. See Doe v. S.
Iron R-1 Sch. Dist., 498 F.3d 878, 880 (8th Cir. 2007)
(affirming a preliminary injunction based on a verified
complaint and additional documents); Movie Sys., Inc. v.
MAD Minneapolis Audio Distribs., 717 F.2d 427, 431-32
(8th Cir. 1983) (holding that courts may rely solely on
affidavits in granting preliminary injunctions).
is a global manufacturer of candy and chewing gum whose
brands include Airheads®, Airheads Xtremes®, and
Mentos® . Doc. 1 at 1, 12. Perfetti introduced a new
product in 2014 called " Airheads Xtremes®
Bites" (" Xtremes® Bites" ). Doc. 1 at
¶ 20; Doc. 18-1 at 1; Doc. 18-2 at 1. Xtremes® Bites
were initially imported from Italy, but Perfetti USA began
manufacturing the candy in the United States in July 2014.
Doc. 1 at ¶ 23; Doc. 18-1 at 1; Doc. 18-2 at 1.
November 2014 and February 2015, Perfetti USA determined that
certain Xtremes® Bites production runs did not meet
specifications and would therefore be withheld as unsalable
product. Doc. 1 at ¶ 25; Doc. 18-2 at 1-2. The sanding
sugar on some of the product did not adhere correctly,
causing the product to become harder than usual, and
individual pieces showed signs of clumping together in the
package. Doc. 1 at ¶ 25; Doc. 18-2 at 1-2. Other
problems arose with packaging of the product, including
sealing defects. Doc. 1 at ¶ 25; Doc. 18-2 at 1-2.
Although posing no health or safety risk to consumers, the
withheld product had defects in quality and/or packaging that
are common when calibrating a new production line and that
would make the product less appealing to consumers. Doc. 1 at
¶ 26; Doc. 18-2 at 2.
USA contacted an environmental services broker, Advanced
Environmental, Inc. (" Advanced Environmental" ),
to arrange for the recycling of the unsalable Xtremes®
Bites. Doc. 1 at ¶ 28; Doc. 18-2 at 2. Perfetti USA
specifically instructed Advanced Environmental that the candy
was not to be sold out on the market. On Perfetti USA's
behalf, Advanced Environmental engaged Midwest, a South
Dakota company operated by Jorgensen, to haul away and
recycle the unsalable Xtremes® Bites. Doc. 1 at ¶
¶ 7, 8, 28; Doc. 18-2 at 2. Perfetti USA understood that
Midwest had the capacity to separate the candy from its
packaging, and then convert the candy into agricultural uses
while recycling the plastic and cardboard. Doc. 1 at ¶
28. Midwest and Jorgensen agreed with Advanced Environmental
to recycle the unsalable Xtremes® Bites. Doc. 18-3 at 2.
Advanced Environmental never told Jorgensen or Midwest that
they could sell the candy. Doc. 18-3 at 3.
hired Golden View Logistics, Inc. (" Golden View" )
to transport the unsalable Xtremes® Bites from Perfetti
USA's facility in Kentucky. Doc. 18-2 at 2; Doc. 18-3 at
2. Between November 2014 and February 2015, Golden View
picked up fifteen truckloads of unsalable Xtremes® Bites
and candy slurry. Doc. 1 at ¶ 29; Doc. 18-2 at 3. It
appears that only four of the truckloads ended up at
Midwest's facility in South Dakota and that Midwest had
Golden View transport the remaining eleven loads to various