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Gibson’s v. Oberlin College: How False Accusations Led to a $32-Million Judgement

April 22, 2022
Gibson’s v. Oberlin College

For the most part, the First Amendment guarantees free speech. But when that speech is false and aimed at inflicting economic harm, it can lead to real liability. Such was the case in Gibson’s Bakery v. Oberlin College.

As this case proved, organizations should beware of doing or saying what’s popular – before determining the truth – just to appease their constituents (customers, students, citizens). While expressing opinions is protected by the First Amendment, spreading false and negative information to appease constituents can lead to serious repercussions.

n.b. this article is about the legal analysis of the facts and law of this case, and not about any political issues.

What Events Transpired?

The case arose in Oberlin, Ohio from an incident where police arrested three Black, Oberlin College students and charged one of them, Jonathan Aladin, with robbery and assault for allegedly shoplifting and injuring an employee of Gibson’s Bakery. Mr. Aladin entered a guilty plea deal in exchange for no jail time, restitution, a promise of future good behavior, and a public statement that he believed Gibson’s actions were justified and were not racially motivated.

The day after the incident, a student protest was held outside Gibson’s, which is across the street from Oberlin’s campus. Oberlin’s Vice President and Dean of Students, Meredith Raimondo, and other administrators and faculty attended the protests. Ms. Raimondo’s written job duties included her attendance at off-campus student protests in and effort to ensure and maintain peace.

As the Oberlin College student body became outraged at the events, a flyer was prepared and the Oberlin Student Senate drafted a resolution. At trial, some witnesses testified that Ms. Raimondo passed along the flyer, but Ms. Raimondo stated that she did not prepare the flyer.

The flyer stated:

“This is a RACIST establishment with a LONG ACCOUNT of RACIAL PROFILING and DISCRIMINATION…”

The Senate Resolution read, in pertinent part, that

“A Black student was chased and assaulted at Gibson’s after being accused of stealing… Gibson’s has a history of racial profiling and discriminatory treatment of students and residents alike.”

The Senate Resolution was emailed to the entire student body and posted in a display case on Oberlin’s campus for about a year.

Sometime later, Ms. Raimondo instructed a subordinate to direct Oberlin’s food vendor to stop supplying Oberlin with food from Gibson’s.

As a result, Gibson’s, and its owners, believed that the bakery and its other ventures lost business and became the target of perceived ongoing harassment by Oberlin and its students. Although Oberlin and Gibson’s attempted to find a resolution, litigation became unavoidable. Gibson’s and its owners eventually sued in the Lorain County Court of Common Pleas (the trial court) alleging that it had lost business as a result of spoken and written statements by Oberlin and its student body, faculty, and administrators.

Oberlin and Gibson’s contested whether the statements made where a matter of fact or opinion and would therefore be subject to First Amendment protections. Before trial, the court decided that the spoken statements did not amount to defamation, but allowed the libel claims, pertaining to the flyer and Senate Resolution, to proceed to a jury trial along with Gibson’s claims for intentional infliction of emotional distress and interference with a business relationship.

The Jury’s Verdict

The Gibson’s libel claim focused only on whether Oberlin had disseminated false, written statements of fact that caused Gibson’s significant harm. The jury ultimately concluded that the flyer distributed during the protests and the Senate Resolution amounted to libel because Oberlin and Ms. Raimondo were unable to prove that the statements were truthful. Gibson’s also prevailed on its claims for intentional infliction of emotional distress and interference with a business relationship. The jury awarded Gibson’s compensatory damages amounting to $11,074,500, punitive damages in the amount of $33,223,500, and attorneys’ fees. Later, the trial court reduced Gibson’s punitive damages under R.C. 2315.21.

Oberlin College Files an Appeal

Oberlin appealed the jury’s verdict to Ohio’s Ninth District Court of Appeals, not on the basis that the evidence was not strong enough or whether prejudicial evidence was admitted at trial, but on the basis that the trial court shouldn’t have even let the case get to trial.

Oberlin argued that the law was on its side because:

  1. The alleged libelous statements were constitutionally protected opinion
  2. It did not publish the statements
  3. It did not act with the requisite degree of fault

A) Libel

1. Factual Statements or Constitutionally Protected Opinion?

Oberlin argued that it was for the trial court (not the jury) to decide if what was said were statements of fact or constitutionally protected opinion.

The appeals court held that the statements in the flyer and Senate Resolution about Gibson’s having a “history” of discrimination and racial profiling were not opinions, but rather statements of fact about the past which could be verified as true or false. In other words, a reader of these statements could reasonably interpret them to mean that there were, in fact, past incidents of discrimination or profiling by Gibson’s. The appeals court concluded that no prior instances of alleged discrimination and racial profiling appeared in the record.

Likewise, the same analysis applies to statements made about an “assault” on a community member, which, if untrue, would be defamatory per se. Therefore, the context of the publication of these false statements mattered. The statements were published immediately following the incident at Gibson’s, prior to the prosecution and conviction of the student, and before the actual facts had been flushed out.

The appeals court held that given the public’s lack of knowledge about what actually happened, a reasonable reader could have interpreted statements about the “assault” as fact and a reason to boycott Gibson’s.

2. Publication of Statements

Another defense Oberlin asserted was that it did not publish the statements. But both the trial and appeal courts disagreed. Ohio law provides that anyone “who requests, procures, or aids or abets, another to publish defamatory matter is liable as well as the publisher.” In other words, while publication is an essential element to a libel claim, any individual or entity or aids or abets the publication may be found responsible for libel.

Witnesses testified that Ms. Raimondo and another Oberlin associate director handed out at least two flyers at the protest. Another Oberlin professor advised students that they could put flyers on parked car and an Oberlin employee testified that she witnessed a supervisor offer to make copies of the flyer in an Oberlin copy room. The jury also heard other testimony about other Oberlin faculty helping the students to assist in publishing the flyer.

The Senate Resolution was published by an organization that was sanctioned by Oberlin – the student senate. Oberlin assisted the senate in its activities by providing financial support, a faculty advisor, an office, and a glass display case to post announcements. Most significantly, Oberlin provided the senate with the authority to meet and pass resolutions, distribute them via mass email, and display them in the glass case. All of this support amounted to a jury being able to find that – but for Oberlin’s support of the student senate – the Senate Resolution could not have been published.

The appeals court even noted that, even if it did not author the defamatory Senate Resolution, Oberlin may have had a duty to remove it from Oberlin’s property.

3. Degree of Fault

The degree of fault attributable to a libel defendant’s actions varies with the plaintiff’s public or private status. The trial court here found that Gibson’s and its owners were private figures, so Oberlin could be held liable if it just negligently published the false statements. The Ninth District affirmed that although Gibson’s was a well-known and longstanding business in Oberlin, itself and its owners were not “public figures.” Were Gibson’s and its owners deemed public figures, they would have had to prove that Oberlin acted with actual malice.

B) Interference with Business Relationship

At trial, while Ms. Raimondo was found liable for interfering with Gibson’s business, Oberlin was not. This claim hinged on whether Oberlin’s food vendor (Bon Appetit) was an agent of Oberlin or a mere third party.

In other words, could Bon Appetit (the agent) bind Oberlin (the principal)? Ohio law instructs that parties and agents for parties cannot interfere with a business relationship because they are a part of the relationship and therefore have a privilege to do so. But, based on the trial and appellate court’s review of the contract between Oberlin and Bon Appetit, Bon Appetit could not bind Oberlin and therefore was not an agent. Accordingly, Oberlin or Ms. Raimondo could interfere with the relationship between Bon Appetit and Gibson’s. Because the record revealed that Bon Appetit stopped purchasing goods from Gibson’s at Ms. Raimondo’s direction, the jury found Ms. Raimondo liable for interference with Gibson’s business relationship with Bon Appetit.

C) Intentional Infliction of Emotional Distress

A claim for IIED requires that a defendant intended to cause serious emotional distress, that their conduct was considered intolerable in a civilized society, that their actions caused injury, and that the plaintiff suffered anguish beyond what a reasonable person would be expected to endure.

During trial, the jury was presented with evidence that Oberlin would not resume business with Gibson’s unless and until Gibson’s dropped charges against Mr. Aladin and the other students or implemented a “first-time shoplifter pass” policy, essentially giving Oberlin students one free pass if caught shoplifting. It was also revealed that an Oberlin interim dean sent a text message reading that she hoped Oberlin would “rain fire and brimstone” on Gibson’s.

Ms. Raimondo also texted in response to a retired Oberlin professor’s criticism was also a key fact in the IIED claim. The text read “F-him. I’d say unleash the students if I wasn’t convinced this needs to be put behind us.”

Perhaps most importantly, Gibson’s proved at trial that even though Oberlin learned that the statements in the flyer and Senate Resolution may be untrue, Oberlin did not do anything about the flyer or Senate Resolution.

Damages Awarded

The jury found Oberlin negligent and awarded actual damages to Gibson’s. According to their forensic accounting expert, Gibson’s had three categories of damages:

  • lost profits
  • lost rental income
  • lost rental opportunities.

These damages were projected out 30 years, due to the Gibson’s being in business since 1885 and the taint of being labelled a racist business unlikely to be overcome for at least a generation. The Gibson’s also had a marketing expert witness who testified as to how negative word-of-mouth communications have twice the effect on revenue.

Then they had a punitive damages phase of the trial. Ohio has limits aka “caps” compensatory non-economic (pain and suffering) damages at $350,000 per claim per party. But punitive damages can be up to two times the un-capped compensatory damages, which was $11,074,500 in this case. So even where a jury’s compensatory damages are capped, the jury’s initial un-capped amount matters for purposes of calculating punitive damages. After the liability phase of trial, the jury awarded $33,223,500 in damages. Ultimately, after adjustments for non-economic compensatory caps and adding in attorney fees and costs, the final judgment upheld on appeal was $31,565,531.

Another noteworthy tidbit is that the Ninth District Court of Appeals panel in this case was bipartisan. But they unanimously affirmed the trial court’s verdict.

What does Gibson’s Mean?

First, organizations (companies, colleges, cities, and even states) should be careful with their actions and public communications regarding smaller organizations. As applied, organizations should not let someone else publish false statements via their communication channels, including social media, or respond with false information and then fail to remove the statements after learning of their veracity.

Second, what may seem like a small matter is still worth consulting experienced and ardent counsel. From filing suit through appeal, the litigation lasted about five years. Gibson’s, a much smaller organization than Oberlin College, could have folded or let Oberlin’s actions blow over. But it sought out counsel who zealously advocated on Gibson’s behalf for years and ultimately prevailed.

Third, since deep pockets are often a harbinger of victory in litigation, it can be tempting for organizations to do something that is borderline to appease constituents. But now, Oberlin is left with a $30+ million decision and widespread publicity as a result.

If you would like to discuss further or have any questions regarding the details of this case, please reach out to KJK Litigation and Arbitration attorney Samir Dahman (SBD@kjk.com; 614.427.5750) or Managing Partner Jon Pinney (JJP@kjk.com;216.736.7260).

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