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An Ohio appeals court shot down challenges from Oberlin College, which now faces a $31 million payout to a local business.

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An Ohio appeals court upheld a decision that will cost Oberlin College millions of dollars in a long-running legal battle between the college and a local bakery that students accused of racist actions.

In a 3-to-0 decision, a state appeals court upheld a ruling from 2019 that required Oberlin College to pay Gibson’s Bakery $25 million in punitive damages and another $6 million in legal fees after the business accused Oberlin of damaging its reputation. A shoplifting incident in 2016 led to student protests and accusations of racism against the bakery.

Gibson’s Bakery sued the college in 2017 after Allyn D. Gibson—an employee whose father and grandfather owned the bakery—confronted three Black Oberlin students, one of whom was caught stealing wine. The fallout led to student protests, elevated by then dean of students Meredith Raimondo, who handed out fliers protesting the bakery, and Oberlin’s student government, which passed a resolution accusing the bakery of a history of racial discrimination.

Gibson’s Bakery claimed initial success in the courts on counts of libel, intentional interference with a business relationship and intentional infliction of emotional distress by Oberlin College. Now, with the latest ruling on Thursday, Oberlin looks to be on the hook for $31 million.

In an email to Inside Higher Ed, Oberlin did not dismiss the potential for another appeal.

“Oberlin is obviously disappointed that the appeals court affirmed the judgment in its ruling. We are reviewing the Court’s opinion carefully as we evaluate our options and determine next steps,” Oberlin spokesperson Scott Wargo wrote. “In the meantime, we recognize that the issues raised by this case have been challenging, not only for the parties involved in the lawsuit, but for the entire Oberlin community. We remain committed to strengthening the partnership between the College, the City of Oberlin and its residents, and the downtown business community. We will continue in that important work while remaining focused on our core educational mission.”

Legal counsel for Gibson’s Bakery did not respond to a request for comment but did provide a statement to the conservative website Legal Insurrection, celebrating Thursday’s ruling.

“The Gibson family appreciates the Court of Appeals’ thorough and thoughtful analysis which rightly rejected all of Oberlin College’s and Dean Raimondo’s challenges on appeal,” Owen Rarric, one of the attorneys representing Gibson’s, told Legal Insurrection.

Unpacking the Ruling

According to court documents, some 200 to 300 protesters demonstrated outside Gibson’s Bakery in November 2016 following the confrontation between Allyn Gibson and a student. Fliers distributed at the protests claimed that the bakery—which has been family-owned since 1885—was a “racist establishment with a long account of racial profiling and discrimination.”

The Student Senate soon followed with a resolution condemning Gibson’s Bakery, which was emailed to the entire student body and publicly posted in a display case on campus.

Oberlin College then cut business ties with Gibson’s, dropping its products from campus.

The Gibsons lawyered up, went to court and won. The initial sum was a total of $44 million, with $11 million awarded in compensatory damages and another $33 million in punitive damages. Citing Ohio law, a judge later capped the amount at $25 million, plus attorneys’ fees. Counting $6 million in legal fees, the total amount owed to Gibson’s Bakery is now $31 million.

Upholding the original verdict, the appeals court shot down three issues raised by Oberlin College and one by the Gibson family. Judges dismissed Oberlin’s claims that the prior judge was wrong to deny the college a new trial on grounds that the court provided incorrect instructions to the jury, among other complaints; that the court failed to cap damages; and that it improperly enhanced fees for the family’s attorneys that the college was ordered to pay.

The Gibson family also appealed, arguing that the court erred when it applied punitive damage caps and Oberlin had not been fully held accountable, a claim that was ultimately dismissed.

Implications for Higher Ed

Some higher education observers worry that the ruling will have a chilling effect on free expression. A key concern is that colleges, fearful of litigation, will clamp down on student speech.

“This creates a very heavy incentive for institutions, particularly private institutions, to police the speech of their students and student governments, student organizations, student newspapers,” said Adam Steinbaugh, an attorney at the Foundation for Individual Rights in Education. “Because the decision suggests that an institution not only can punish unprotected speech—which is not a controversial position—but that the institution must punish it or must censor it, or [the college] becomes liable for that speech if it is defamatory.”

Jeffrey Sachs, a political science professor at Acadia University who often writes about free speech on campus, offered a similar opinion in a Twitter thread. He noted that the suit hinged on two actions: the libelous fliers distributed by staff and the Student Senate resolution.

“It’s the second action that really worries me. Basically, the court held that since Oberlin authorizes the student senate, subsidizes it, provides a supervisor, and allows it to post its documents on school property, it is legally responsible for the student senate’s speech,” Sachs tweeted.

While Sachs notes the dean erred in handing out the fliers, “the senate resolution issue feels much more complicated and nothing to celebrate.” The ruling, he suggests, implies that colleges must scrutinize the speech they provide a platform for and “have a legal duty to censor.”

Given the financial implications, Steinbaugh suspects colleges will be more likely to take a hard look at student speech and perhaps even diminish the support they provide for free expression. After all, enabling student speech may be more costly for colleges than simply stifling it.

“It creates a financial incentive for institutions to limit the channels through which students can exercise their expressive rights, or to diminish the resources that institutions commit to allowing students to express themselves, whether that’s through a student organization or student government or a student newspaper,” Steinbaugh said.

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