Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-1_09-cv-00906/USCOURTS-caed-1_09-cv-00906-88/pdf.json

Nature of Suit Code: 891
Nature of Suit: Agricultural Acts
Cause of Action: 07:499 Agricultural Commodities Act

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IN THE UNITED STATES DISTRICT COURT 

FOR THE EASTERN DISTRICT OF CALIFORNIA 

ONIONS ETC., INC., et al.,

Plaintiffs,

v.

Z&S FRESH, INC., et al.,

Defendants.

1:09-cv-00906 AWI MJS 

ORDER FOR SUPPLEMENTAL BRIEFING

REGARDING PUNITIVE DAMAGES 

(ECF No. 916.)

At the Court’s invitation, the parties, Fresno Madera Federal Land Bank (“Land 

Bank”) and Aron and Carrie Margosians, filed supplemental briefing on the issue of 

whether the Margosians may be permitted to seek punitive damages against the Land 

Bank in this case. The Court heard oral argument on the issue on December 18, 2015. 

For the reasons stated on the record at the hearing, the Court finds that it remains 

bound by the Ninth Circuit decision in In re Sparkman, 703 F.2d 1097 (9th Cir. 1983), 

and thus that the Margosians may not pursue punitive damage claims against the Land 

Bank. 

At the hearing, the Margosians argued that Loeffler v. Frank, 486 U.S. 549 (1988), 

serves as superseding Supreme Court case law that this Court should rely upon to 

Case 1:09-cv-00906-MJS Document 931 Filed 12/22/15 Page 1 of 2
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overturn Sparkman. The Court finds the argument unpersuasive for two reasons. First, 

the Supreme Court in Loeffler applied the test for implicit limitations to sue-and-be-sued 

clauses set forth in Federal Housing Admin. v. Burr, 309 U.S. 242, 245 (1940). Loeffler 

did not add or amend the manner in which the Supreme Court determines the scope of 

sue-and-be-sued clauses against federal agencies. It does not serve as supervening 

Supreme Court authority. Second, it still remains that this Court is not the proper Court to 

overturn Ninth Circuit decisions. Even if the Sparkman decision faces just criticism, it is 

this Court’s duty to follow Ninth Circuit authority. 

At the hearing, the Court invited proposals for proceeding in a manner that might 

avoid retrial for a finding on punitive damages if the Margosians prevail at trial and the 

Ninth Circuit overturns Sparkman on appeal. The Court seeks further briefing from the 

parties setting forth their proposals or stipulation on this issue as well as authority for 

proceeding as they propose. The supplemental briefing should be short, no more than 

five (5) pages in length, and filed on or before January 22, 2016. The Court will then 

issue an order regarding how it will proceed. 

IT IS SO ORDERED. 

Dated: December 21, 2015 /s/Michael J. Seng 

 UNITED STATES MAGISTRATE JUDGE 

Case 1:09-cv-00906-MJS Document 931 Filed 12/22/15 Page 2 of 2