A small energy drink company with South Dakota origins has won a legal victory against former food giant Sara Lee, reviving a lawsuit that had been dismissed.A three-judge panel with the Fifth Circuit Court of Appeals ruled that a district court judge in Texas wrongly dismissed some claims made by Jacked Up against Sara Lee.

The decision comes nearly a year to the day when Jacked Up’s founder was jailed in Lake County, South Dakota on charges that he murdered his fiancée at the Lake Madison home they rented.

Joseph Schmitz has been held since April 27, 2016, after he shot Corina Booth. Both Schmitz and Booth were South Dakota natives who lived in Texas, but they also spent time at Lake Madison.

Schmitz told authorities that Booth attacked him that night with a knife. In interviews with Argus Leader Media, Schmitz said he had confronted Booth about an affair she was having with Scott Rabern, a Department of Transportation employee in Pierre. Schmitz said Booth attacked him after he told her that he was going to confront Rabern the next day.

Authorities recovered a knife near Booth’s body, but arrested Schmitz on murder charges, arguing that he could have escaped the home. Friends of Booth contend that she didn’t have the temperament to act violently.

Schmitz founded Jacked Up in 2009 while working for the Trump Organization, where he was a national sales manager for what was then President Trump’s bottled water division. Schmitz said he recognized the potential for energy drinks, but lawyers for the Trump Organization were worried about liability, so Schmitz went out on his own.

His products of energy shots were already enjoying success, having been picked up by some national convenience stores, when he was approached in April 2011 at a food convention by two Sara Lee officials about negotiating a licensing agreement to sell a line of dispensed energy drinks at convenience stores. That summer, Jacked Up developed several energy-infused coffees, teas and cappuccinos as well as the marketing materials for the drinks.

Schmitz signed a licensing agreement with Sara Lee in September which entitled Jacked Up to royalties on sales of the products and sales to Sara Lee. But three weeks later, Sara Lee sold its beverage division to J.M. Smucker Co. Smucker terminated the contract with Jacked Up.

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

The district court judge threw out all of Jacked Up’s claims against Sara Lee and Smucker.

But the three-judge panel ruled that the district court erred in throwing out some of the claims against Sara Lee, including on breach of contract, fraud and fraudulent inducement.

In the lawsuit, Sara Lee claimed that it still wanted to go forward with the energy drinks after it sold its beverage division but that Jacked Up violated the agreement. Greg Immell, then an executive with Sara Lee, claimed that he expressed Sara Lee’s desire in a phone call with Schmitz to move forward with the deal. Schmitz, however, claimed that Immell called to terminate the deal.

Jacked Up energy shots. (Photo: Jacked Up Facebook Page)

The judges found Schmitz’s account believable.

“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.

In a jailhouse interview Wednesday morning, Schmitz called the decision “a very bittersweet moment.” He and Booth had been together 15 years when she died, and it had been “a huge factor in our lives for so many years.” But in text messages that were recovered between Booth and Rabern, it was clear they had been communicating about the lawsuit and a potential monetary award.

The ruling allows Jacked Up to move forward, he said.

“Obviously, it’s a huge victory for us and I’m very excited about it,” he said.

Kelly Mendel, a friend of Schmitz’s and the current CEO of Jacked Up, said by email that she was excited by the ruling.

“I am looking forward to getting Jacked Up back on a national level and it being a very prominent household brand name,” she said.