Onions Etc., Inc. et al v. Z & S Fresh, Inc. et al
ORDER for supplemental briefing regarding punitive damages, document 916 . 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 suppl emental 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. Order signed by Magistrate Judge Michael J. Seng on 12/21/2015. (Rooney, M)
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF CALIFORNIA
1:09-cv-00906 AWI MJS
ONIONS ETC., INC., et al.,
ORDER FOR SUPPLEMENTAL BRIEFING
Plaintiffs, REGARDING PUNITIVE DAMAGES
(ECF No. 916.)
Z&S FRESH, INC., et al.,
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
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
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.
December 21, 2015
Michael J. Seng
UNITED STATES MAGISTRATE JUDGE
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