Oberlin College to Jury: We’re cash poor and big punitive award to Gibson’s Bakery will hurt students
Oberlin College basically begged for mercy at punitive damages hearing today. (UPDATED with additional details of today’s hearing)
The witness testimony completed today in the punitive damages hearing, which follows the $11.2 million compensatory verdict last Friday in the lawsuit Gibson’s Bakery v. Oberlin College. The jury could award up to double damages, meaning $22.4 million on top of the $11.2 million, bringing the potential total to $33.6 million, plus a recommendation that the judge award attorney’s fees.
I will have a complete update later, but here is the essence of Oberlin College’s defense today:
Gibson’s lawyers spent considerable time going over Oberlin College’s IRS Form 990, showing over $1 billion in assets and numerous employees earning over $100,000, They also got the Vice President and General Counsel of the college to admit to some of the content of the blast email she sent out soon after the compensatory verdict, including that she felt the jury disregarded the “clear evidence,” though they were not permitted to show the jury the letter itself under a prior court ruling.
The defense then argued that notwithstanding the Form 990, the college had cash flow and liquidity issues that would make a large punitive award difficult for the college. The defense compared the relatively poor financial condition of Oberlin College to other colleges and universities in Ohio. The defense argued that students would be harmed by a large verdict because the college might have to cut back on grants given to students.
Closing argument will start at 10 a.m. tomorrow, followed by jury instruction, and then the jury gets the case.
MORE TO FOLLOW LATER
(added 8:50 P.M.)
NOW FOR THE REST OF THE STORY
It was an odd day in the Ohio courtroom today. Oberlin College, which got socked with an $11.2 million verdict last week for their role in defaming a small business as racist, spent half the day saying they weren’t as bad as they seem, and the other half claiming they were much poorer than they seem.
As this Gibson Bros. v Oberlin College lawsuit hits the end of the line, with the jury deciding on whether “punitive” damages will be assessed to Oberlin College, much of the testimony today consisted of the jury hearing how much cash the school has. Or doesn’t have.
But at any time when one tries to define the monetary value of anyone – large institution or ordinary person – it usually comes down to how one might interpret what such fun terms as “revenues” and “expenses” and “deficits” actually mean. Sometimes those terms get interpreted in different ways to get the dollar number one wants.
Oberlin College was so hellbent on getting the message out that their cash liquidity was in such dire straits — as the eight-person jury was figuring out if they wish to add $22.4 million to the school’s legal verdict bill — that they brought out the school’s president, Carmen Twillie Ambar to the stand to tell that part the story.
“We’ve created deficits … and over the next ten years, if this continues, that is unsustainable and we will not exist,” Ambar told the jury. She even indicated the school’s grants — about $60 million a year from the school, and lots of students get those scholarships as only 10% of them pay the full $70,000 a year — were important to preserve as “the accessibility of education” was a key component of the school’s purpose.
For about four hours, it felt like a divorce court proceeding where one of the spouses was claiming they had no assets to divide. Even though they had a Rolls Royce car in the garage and a nice yacht at the marina.
A few things that flew by in the hearing on whether the jury wants to pile more money on to the Oberlin College bill, was the fact that defendant Meredith Raimondo was brought to the stand by the plaintiffs again. And how the plaintiffs used a little legal maneuvering to bring out an email in a vague way to jurors, sent to alums hours after the verdict that the school was “disappointed with the verdict and regret that the jury did not agree with the clear evidence our team presented.”
But more on that toward the bottom.
Rebecca Vazquez-Skillings, the Oberlin College vice president for finance and administration, was brought to the stand by the plaintiffs’ team to go over the numbers and show how the school had lots of money and how a few million more on this verdict wouldn’t hurt them.
As Gibson attorney Lee Plakas told the jury, “If you have $1,000 in your bank account and you get a $100 fine, it’s a big deal, but if you get a $100 fine with $1 million in the bank, its’s like getting a mosquito bite.”
When the plaintiffs went over the IRS Form 990 (the required non-profit filing) and the school’s annual financial reports, it seemed like the Oberlin College’s monies had measurable value and were robust. At least to someone like me who doesn’t have much money. [View Oberlin College’s 2017 Form 990 — the 2018 Form 990 is not yet publicly available]
The college has more than $1 billion in funds and net assets according to the latest IRS 990 form, an endowment fund that had grown from $440 million to $887 million in the last 20 years, and because of its non-profit status, pays no taxes on any property it owns.
It also had 18 members of their administration making more than $100,00 a year. The president and chief financial officer of the school were both making more than $500,000 a year.
But not all was so good, Vazquez-Skillings told the jury under questioning from the Oberlin College lawyer. “We are dependent on enrollment … and we have declined significantly in total enrollment.”
Significantly? Well, again, depends on how you define that. The enrollment has gone down from 2961 in 2014 to 2785 this year. That’s a decline of 176 students, or a 6% drop in enrollment. That might be a loss of $12.3 million in tuition and dorm housing revenue, but then you have to figure that’s less scholarship and grants coming out of endowment.
And that was the problem with all this back and forth over how Oberlin College is supposedly in the poor house. Yes, they admitted, they had lots of money in some buckets, but weren’t allowed to touch some of those buckets, so even though it seems like they have lots of money, they really don’t.
The jury seemed be getting tired hearing this back and forth financial interpretation.
At the end of this Accounting 101 class, I thought of it this way. They said enrollment was decreasing, but assets were increasing. Overall revenue from students was down, but investment income was up. “We have to reorganize the way we function,” Vazquez-Skillings said in one of the most obvious statements this jury heard in the last month.
As for Meredith Raimondo, she was brought to the stand for a short period in what seemed like an excuse for the plaintiffs to show the jury more emails and texts she was privy to or that originated with her. The punitive stage demands the jury find “malice,” in their deliberations, and these emails and texts tended to prove some of that.
Raimondo didn’t answer many questions. She just confirmed that she had read and received these letters and messages. Most were written by ordinary residents of the town of Oberlin within a week or so of the protests in early November of 2016, and the plaintiffs were trying to show the jury that the Oberlin College administration ignored virtually every voice that was saying they were wrong about claiming Gibson’s was racist over the shoplifting incident.
One was an email from a biracial couple (one an alum, the other not), who had known the Gibsons for many years and told the administration that their racist branding “was completely inappropriate in so many ways.” Another alum wrote “[The Gibsons] are a family of gentle and fine people” and that the racist accusations were “a few opportunistic student activists looking for a cause.”
The attorneys also brought up again that Raimondo called a news reporter who she had handed the racially accusative flyer “a liar” soon after he wrote a story that she had done so. She has testified in court previously, and again today, that she was mistaken for doing that. But she also indicated her mistake in calling him a liar was explainable, in that she “believed it was a false statement because I did not know he was the person I gave the flyer to.”
As far as the little bit of legal maneuvering, Judge John R. Miraldi had ruled yesterday that an email written by Donica Thomas Varner, Oberlin College’s Vice President and General Counsel, who has been in court since day one, was inadmissible. The email was sent to thousands of alums an hour or so after the jury came back with their $11.2 million verdict against the college, and was very much against the jury’s decision. The judge wouldn’t admit it because “this was a letter sent by the Oberlin general counsel after the verdict. We are talking about the actions of the defendants that demonstrated malice. What we will use is only what was litigated in court.”
Varner’s email said this in one part: “We are disappointed with the verdict and regret that the jury did not agree with the clear evidence our team presented.”
Plakas got around the judge’s ruling that the email was not admissible by calling Varner to the stand to discuss school policy. He referred to the email in vague terms, but was able to ask Varner a few questions without acknowledging the email itself to the jury. He even asked her about the quotation above, specifically if she still “regrets that the jury did not agree with the clear evidence our team presented.”
“Yes,” she answered, before Oberlin College attorneys objected.
At the end of the day, though, it comes down to the jury. And if they see malice as part of what Oberlin College did in their libeling of Gibson’s.
“You have spoken,” said Oberlin College attorney Rachelle Kuznicki Zidar to the jury. “You have sent a profound message. We have heard you, and believe me, colleges across the country have heard you,” She also looked at the Gibson family and said, “The college doesn’t hate you.”
But then she got back to the main theme, which was that “punitive damages would only adversely impact students who had nothing to do with the demonstrations.”
Plakas brought up the bigger national interest in the case, saying that “Defamation is where words are used as weapons … even more damaging than bullets can be from weapons. Once you are defamed there is no surgical procedure to fix it. That’s why the words are the weapons now, in our society at this time, because they cause permanent injury.”
“Why should we care about the Gibson’s? Why should the rest of the country care? What is it about this case that has generated such interest?”
“Because the Gibson family represents all of us and we are at a tipping point now,” Plakas told the jury. “This case is about fairness. It is about our youth’s education and its importance. You, as a jury, are helping your community right now, but you are also helping the national community.”
Plakas then looked over at Allyn W. Gibson, the 90-year-old who has been sitting behind the plaintiffs’ attorneys’ table since the first day in April, a walker in front of him and a brace around his neck, and the veteran attorney in his late sixties smiled and winked at “Grandpa” as he finished his opening statement.
“The school helped distribute a flyer that said, ‘A member of our community was assaulted by the owner of this establishment yesterday,’ “ Plakas said, looking directly at Mr. Gibson. “That is what the malice part of this is about.”
“Oberlin College apparently thinks Grandpa is able to assault somebody.”
The final closing arguments will be done tomorrow (Thursday) morning, and the jury should go back to their contemplation room by lunch. The punitive damage verdict should be decided by afternoon. Stay tuned to Legal Insurrection for the latest.
Daniel McGraw is a freelance writer and author in Lakewood, Ohio. Follow him on Twitter @danmcgraw1
[Featured Image: Oberlin Police Body Cam Video of Gibson’s Bakery Shoplifting Arrests]
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