Val-Land Farms Inc. v. Third National Bank

The plaintiffs in this case are potato growers who sold potatoes to Compton Produce (a third party, not directly involved in this litigation) who went bankrupt. The plaintiffs sued Compton Produce and won a judgment. Alas, Compton Produce had no money. In discovery in that case, however, the plaintiffs found documents suggesting to them that they might have a cause of action against Compton Produces banker, Third National. Consequently, the plaintiffs filed a two-count complaint against Third National. One count was a claim under the Perishable Agricultural Commodities Act ("PACA"), and the other was a state common law claim. Neither count made it to trial; the court granted a motion to dismiss on the PACA count and granted summary judgment on the state common law count. The plaintiffs appeal these rulings. After judgment had been entered, the court entertained a motion by Third National for Rule 11 sanctions. The court granted the motion as to the PACA claim but not as to the common law claims. The plaintiffs and their attorneys appeal, arguing that Rule 11 sanctions should not have been imposed at all, and the defendant has cross-appealed, arguing that sanctions should have been granted as to all counts and, in any event, that the amount of sanctions was too low. We affirm the decision of the court below on all issues.