Today was Day 7 of witness testimony in Gibson Bros. v. Oberlin College. The events giving rise to the lawsuit have been said to represent “the worst of identity politics.” You can read about some of the background on this case here.
The court addressed damage issues from a legal perspective earlier in the case, as described in our post Gibson’s Bakery v. Oberlin College trial motions – What’s a reputation worth, and how do you prove it?
In a half day of testimony that was full of numbers, the jury deciding whether Oberlin College defamed and libeled a small business heard that the bakery/market had already lost and will lose about $5.8 million from the school’s alleged racist accusations. That number was arrived at by an independent accountant who based that figure on losses over a 30 year period.
“When you look at how the revenues have declined, it is clear that those numbers represent that something major happened,” said Frank Monaco, a certified public accountant who is managing partner for a 60-member accounting and financial consulting firm based in Canton, Ohio. Monaco has been a CPA for almost 40 years.
He said he based his 30-year estimates on the fact that Gibson’s Bakery & Market, has been around for more than 130 years and that “when you have people thinking you’re racist, and you live in a small town, the accusation can last a lifetime.” He said 30 years was a “generational” estimate, being that Gibson’s family has been in the business for five generations.
Things got testy during cross-examination of Monaco by Oberlin College’s attorney Matthew Nakon. “Do you hold that Oberlin College is responsible for every human being that doesn’t shop there anymore,” Nakon asked. Monaco paused, and Nakon asked him, “Do you understand my question?”
“Yes, do you understand my report?” Monaco answered.
The differences in the approach taken in this fight between the plaintiffs and the defendants were quite clear. Gibson’s Bakery presented that their revenues began dropping significantly after the protest by students in November of 2016, a protest that claimed in no uncertain terms that the business was racist for pursuing the prosecution for three African-American students who were arrested for shoplifting bottles of wine at the store.
Monaco laid out figures that showed how much of that loss came from the stores school cafeteria food deal, in-store shopping by both students and the general public, and the lost income from two apartment buildings they owned (and a future planned building of another one scrapped).
The Oberlin College’s attorney, however, repeatedly harped on the fact that Gibson’s had seen a decline in revenue in the five years prior to the protest, and that the protests in 2016 had little to do with any income loss. In addition to that, as reported exclusively in Legal Insurrection last week, the defendants focused on the fact that an expert report they would bring into evidence this week or next would say the business isn’t worth any more than $35,000.
Monaco said the tax filings he looked at indicated that the three main employees of the business – 90-year-old Allyn W. Gibson, his son, David Gibson, and grandson, Allyn D. Gibson – made $140, 000 in salaries in 2016. “You would never sell a business like this for $35,000 that has been around for 130 years and has $140,000 in annual salaries for its principal owners,” he told the jury.
Monaco laid out his numbers very clearly: the business would lose $2,819,000 over 30 years in the store and from school food losses; $985,350 in higher rental property vacancies; and $2,031,000 in a long-planned apartment building they planned to build in the next few years. The last loss came from not having the projected revenue to do the housing project.
His report also took a stab at measuring how bad the student loss of shopping would be. Oberlin has a student debit card system called Obie Dollars; money is deposited in the school-run account, and the students can then use that card at on-campus, school-run stores or selected off-campus stores like Gibson’s
In 2015, Gibson’s took in about $48,000 in Obie Dollar shopping from students, and then $44,000 in 2016 (the protests happened Nov.10-11 that year). But in the next two years, the Obie Dollars spending dropped off the campus cliff: Oberlin College student spent only $9,000 in Obie Dollars at the store in 2017, and about $5,000 in 2018.
Overall store revenues have dropped from $828,000 in 2016 to $690,000 in 2017 to $525,000 in 2017. Based on what has been brought in so far this year, the 2019 revenues are predicted to be $433,000. Monaco said that is a loss of 47.74% in income four years. “These are textbook before and after numbers,” he told the jury.
Oberlin College attorney Nakon cross-examined with several points he put out over and over again. He tried to lessen the estimated loss by calling Gibson’s a “small time general store and not a national conglomerate.” He also pointed out to Monaco that the store had had a mixed bag of revenue results between 2010 and 2018: five years when the business posted small losses, and four years when they operated at a profit.
Monako said the previous losses were from the business being late to the game in having debit cards accepted. “Hardly anyone, and especially among students, carry any cash anymore,” he said. “They were very slow to modernize.”
It is quite apparent that the Oberlin College attorneys are defending the damages with as much effort as they are defending liability.
What the general feeling among courtroom observers is that a win for Oberlin College (from their viewpoint) would be to be found guilty of the defamation and libeling of Gibson’s, but having the decide upon a small payout of money. That way, they can still be seen by the social justice warrior activist students in Oberlin as fighting racism by the establishment, but not have to pay much money to be held in such high esteem.
At this point, when one does the math, it is very clear that a high monetary award is quite possible. The expert today laid the compensatory damage at $5.8 million for store revenue losses, and if the jury does find the college guilty of the defamation and uses that number as compensatory damage, the punitive monetary damage can be double from that number. That would add $11.6 million to the $5.8, making it $17.4 million to start with. And, of course, that high figure would mean the best of all possible worlds would take place in a pro-Gibson’s bakery world.
Monaco gets back in the witness chair tomorrow to finish his testimony. Expect Gibson’s principal owner, David Gibson, to follow. Oberlin College will likely begin calling their witness and presenting evidence on Wednesday.
Daniel McGraw is a freelance writer and author in Lakewood, Ohio. Follow him on Twitter @danmcgraw1
WAJ adds: Based on Dan’s reporting, the college’s attack on the expert appears to continue the tone-deaf nature of the defense since the start of the case, and arguably before the case. It’s one thing to attack future damages as speculative, it’s something else to denigrate the business, a business in existence since 1885 and which feeds multiple generations of the Gibson family and numerous local employees. By insulting and demeaning the Gibson’s business, the defense is insulting the community and the jury. The defense might as well have just called them “deplorables.”
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