Oberlin College pleads poverty to jury deciding on punitive damages
Yesterday saw the president (salary: over half a million dollars) of Oberlin College (with an endowment of $887.4 million) plead poverty to a jury in Lorrain County, Ohio (median household income: $54,932), urging them not to add punitive damages of up to $22 million to the $11 million already awarded to Gibson's Bakery. (For background on the case see this, this, and this.)
Allen Memorial Art Museum, Oberlin College, Oberlin, Ohio, USA. Architect Cass Gilbert, 1917.
Photo credit: Daderot.
Daniel McGraw, who sat through the entire trial for the Legal Insurrection Foundation, summarized Oberlin's defense yesterday:
[H]ere 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 emailshe 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. (snip)
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.
But of course it is not a divorce; it is a proceeding intended to signal to the nation, especially to the college administrators of the country, the costs of reckless catering to politically correct radical students making false claims of racism.
Sammy Westfall in the Toledo Blade:
Punitive damages are meant as both a punishment for the college and a deterrent for similar future conduct — not only for Oberlin, but to keep "any other institution from committing similar acts," [Gibson's lawyer] Mr. Plakas said. He said that the deterrence aspect of the case is the most important aspect for himself and the nation.
He told the jury that the punitive damages determined will "protect everyone else in our country, in our state, in our community — protects them to ensure that they don't have to go through what the Gibsons went through."
"If indeed there was interest, if indeed you come across stories in the New York Times, or the Washington Post, or FOX News on TV or CNN or Wall Street Journal ... why do you think they would have been and are so interested?" Mr. Plakas asked the jury.
Mr. Plakas submitted to the jury that national interest in the case has arisen because of a "national tipping point" spurred by twin purposes: How society is recognizing a "changing atmosphere" in the country and how words have become weapons, and the importance of our educating youth properly.
With all its assets, Oberlin would not be bankrupted by a judgment totaling $33 million, but it would have to make a lot of cuts to programs and maybe to scholarships. Institutional decline is the more likely outcome, as the Pittsburgh Post-Gazette editorialized:
Oberlin is at a crossroads. It must take stock and correct course — no more political correctness for the sake of appearances or image, no more defense of student misbehavior. The college must admit that it erred and that the owners of the bakery acted as any business owners would under similar circumstances. More shenanigans like this could put Oberlin out of business at a time when so many liberal-arts schools are struggling to fill their classrooms.
That's what happened to Antioch College, also once a distinguished Ohio liberal arts school. It was overcome with unthinking and fashionable leftist radicalism and it made itself a joke. Now it is a pale shadow of its former self. Is this the route Oberlin would like to go?