Remember the fight between Gibson’s Bakery and Oberlin College in 2016? It seems so long ago, but it isn’t over yet. You can read about it on the relevant Wikipedia page, or on the many posts I wrote about it at the time. If you forget, here’s the summary from Wikipedia:
The case began in 2016 with an incident of shoplifting by a Black Oberlin College student at Gibson’s Bakery, and subsequent arrest of three Black students for assaulting a staff member. Students, faculty members and employees of Oberlin College protested against the bakery, alleging racism. Meredith Raimondo, the dean of students and vice-president at Oberlin College, took part in the protest, distributing a pamphlet falsely alleging racism on the part of the bakery. Oberlin initiated financial sanctions against the bakery and lent material support to protestors. The owners of the bakery sued Oberlin College and Raimondo for damages.
A jury found that the college had defamed the owner of Gibson’s Bakery and his family and awarded them $44 million in compensatory and punitive damages in 2019. The trial judge reduced the total award to $25 million due to Ohio state law capping punitive damages. The trial court also awarded the bakery $6 million for legal fees. The college appealed the decision. In 2022, the Ninth Ohio District Court of Appeals unanimously upheld the 2019 jury verdict which found that the college defamed, inflicted distress and illegally interfered with Gibson’s Bakery; the court also upheld the damages award. Oberlin College then sought review by the Supreme Court of Ohio, but that effort failed when the court declined to accept jurisdiction on August 30, 2022.
Oberlin behaved badly, defaming, lying about, and trying to damage Gibson’s Bakery, and the jury got angry, levying a huge fine. With interest, the amount that Oberlin had to pay Gibson’s was precisely $36,590,572.48. That’s a big hit for a small school like Oberlin, and a windfall for Gibson’s (alas, two of the owners involved in the fight died during the legal proceedings).
But Oberlin had insurance through four companies: Lexington Insurance Company of New York; United Educators Insurance of Bethesda, Maryland; Mount Hawley Insurance Company of Peoria, Illinois; and StarStone Specialty Insurance Company of Cincinnati. The College assumed that they could recoup that huge pile of damages from these insurance companies.
But not so fast: the companies are refusing to pay Oberlin, and so the College have had to take them to court. This case will go on forever! Click the screenshot below to read the National Review article about this suit, or see a more complex post at Legal Insurrection.
Why are the insurers refusing to pay? Because, they claim, Oberlin violated the conditions of the insurance policy. Not only are the companies balking at paying, but United Educators is refusing to renew its $25 million coverage of Oberlin, coverage that had lasted 34 years.
Here’s the basis of the lawsuit: the insurance companies claimed that Oberlin’s actions rendered reimbursement null and void. I’ve put the meat of the companies’ claims in bold:
William A. Jacobson previously noted at Legal Insurrection that a Motion to Intervene filed by Lexington in 2019 offered evidence that the company was likely planned to refuse to cover the judgement.
The company wrote in the filing that the policy at hand “potentially provides coverage in relation to ‘personal and advertising injury,’ defined to include defamation and/or disparagement in certain circumstances” but that it “excludes any such coverage if ‘personal and advertising injury’ is caused ‘with the knowledge that the act would violate the rights of another … ,’ or if the insured published material it knew to be false. Further, the Lexington policy provides coverage for punitive damages insurable by law, but only where the corresponding award of compensatory damages is also covered by the Lexington policy.”
The filing went on to note that the plaintiffs in the Oberlin case [JAC: Gibson’s Bakery] “allege that defendants Oberlin and Ms. Raimondo published material that falsely characterized the bakery owned by plaintiffs (“Gibson’s”) as being a racist establishment.”
“While such allegations potentially implicate ‘personal and advertising injury,’ plaintiffs also alleged that the statements were published with malice, were intended to injure plaintiffs’ business reputation, and were part of a purported campaign to harm plaintiffs,” the filing read. “If it is established that the defendants knew the alleged statements were false, or if the defendants knew their alleged acts would violate plaintiffs’ rights, the Lexington policy would exclude coverage for any resultant damage. Thus, Lexington seeks to intervene in order to submit jury interrogatories to determine the extent of the defendants’ knowledge in relation to the alleged publications.”
In other words, the College’s actions constituted “personal and advertising injury” that violated the rights of Gibson’s Bakery, and, in its pamphlets and handouts, published information that Oberlin knew to be false. That’s defamation that injured the bakery and was intended to do so.
Of course insurance companies don’t want to hand out such a large reimbursement, so I’m not sure if they’ll prevail in this case. But given Oberlin’s arrogant behavior and invidious actions against Gibson’s Bakery, which the jury saw as unforgivable, I can’t help but be glad that Oberlin hasn’t yet been able to recover the damages. And, in trying to do so, they’re going to have to pay even more money to lawyers.
Note too that Oberlin never issued an apology for defaming the bakery, calling it a racist establishment (not at all true), and trying to hurt Gibson’s business.
h/t: DrBrydon, Michael