Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-1_09-cv-00906/USCOURTS-caed-1_09-cv-00906-91/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 REGARDING PRESENTATION OF

PUNITIVE DAMAGES

(ECF No. 931)

Fresno Madera Federal Land Bank (“Land Bank”) filed a brief challenging Aron 

and Carrie Margosians’ (“Margosians”) ability to seek punitive damages against the Land 

Bank. The Court heard oral argument on the issue on December 18, 2015, and on

December 22, 2015, issued an order finding that the Margosians were not entitled to 

seek punitive damages against the Land Bank in light of In re Sparkman, 703 F.2d 1097 

(9th Cir. 1983). (Order, ECF No. 931.)

However, in the December 22, 2015 order, the Court requested supplemental 

briefing from the parties regarding proposals for proceeding in a manner that might avoid 

retrial on punitive damages if the Margosians prevail at trial and the Ninth Circuit 

overturns Sparkman on appeal. (ECF No. 931.) The parties filed supplemental briefs on 

January 22, 2016. (ECF Nos. 933-34.) 

Case 1:09-cv-00906-MJS Document 938 Filed 02/01/16 Page 1 of 3
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The Land Bank denies that any valid claim for punitive damages exists in this 

case. It further argues that even if there were a valid claim, the likelihood of all 

prerequisites to seeking such an award occurring is too small to justify providing for that 

possibility at trial. Further, the Land Bank contends it would be prejudiced by having 

potentially to litigate and resolve that issue when the Court acknowledges that a verdict 

favorable to the Margosians would have to be vacated under controlling Ninth Circuit 

law. 

The Margosians, unsurprisingly, argue that the Court has the authority to, and 

should, allow a jury to hear the punitive damage claim. They claim that it is within the 

Court’s inherent case management powers to so proceed and then enter judgment as a 

matter of law in favor of the Land Bank under Fed. R. Civ. P. 50 should the jury return a

punitive damage award in the Margosians’ favor. 

Upon review, the Court will allow the Margosians to pursue a punitive damages 

award at trial under the following limited circumstances: As a matter of judicial 

efficiency, the Court will bifurcate from issues of general damages and other relief the 

Margosian’s claims of liability for and the amount of punitive damages. The latter two 

issues shall be addressed to and by the jury only after the former are resolved. That is 

to say, if and only if the Margosians obtain a verdict for actual damages shall the Court 

proceed to a second phase of trial addressing the propriety, Sparkman aside, and 

amount of punitive damages. By proceeding in this manner, if the Margosians do not 

succeed in proving liability on their counterclaims or if they opt instead for purely 

equitable relief, neither the Court, the jury, or the Land Bank will be burdened with the 

need to address the punitive damage claim. If, on the other hand, the Margosians

prevail on a legal basis which, but for Sparkman, would give rise to the possibility of an 

award of punitive damages, it would be most efficient for the Court and all the parties to 

have their entitlement to it and the amount thereof determined by the same jury which 

hears the underlying case and to do so immediately after conclusion of the underlying 

case. The Court does not see any meaningful prejudice to the Land Bank in having to 

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spend the additional time addressing the punitive damage issue in the manner specified 

above if the need should arise; any prejudice would be outweighed by the benefit to all 

of not having to reconvene the same or a new jury to try a punitive damage claim in the 

event Sparkman is overruled.

IT IS SO ORDERED.

Dated: February 1, 2016 /s/Michael J. Seng 

UNITED STATES MAGISTRATE JUDGE

Case 1:09-cv-00906-MJS Document 938 Filed 02/01/16 Page 3 of 3