The Iowa Supreme Court has ruled that a food distributor can sue over a state organization created to buy food for schools. Ten Area Education Agencies formed the Iowa Educators Corporation to serve as a volume food buyer in hopes of getting lower food prices for their school districts.
Hawkeye Foodservice of Corallville sued in 2008, alledging IEC chose Martin Brothers Distributing of Cedar Falls as its prime vendor despite superior bids from other vendors. The director of IEC is a former Martin Brothers employee.
Hawkeye Foodservice also said the IEC was formed illegally and resulted in the loss of substantial revenue and customers to the company. The Polk County District Court ruled Hawkeye had no legal standing to sue and threw out the case.
The Court of Appeals overturned the district court ruling in 2009. The Iowa Supreme Court issued a ruling today that the district court was in error and sent the case back to the district court for trial.
See the complete ruling here:IEC ruling PDF