The big post-trial fight will be how much the compensatory verdicts get reduced under the tort reform caps on non-economic damages, and what the ripple effect is on punitive damages. The swing could be enormous.

The massive compensatory and punitive damage jury verdicts in favor of Gibson’s Bakery and its owners Allyn W. Gibson and David Gibson, against Oberlin College and Dean of Students Meredith Raimondo, continue to reverberate. This case is a big shock to the higher educational system and already is giving rise to a rethinking of the role of administrators in participating in student activism.

Yet think of the jury verdict as the end of the beginning. The most legally dangerous territory for the Gibsons is ahead. The facts of the case were so strong for the Gibsons that in some ways the easiest part is behind them. Now they need to protect what they have earned from numerous legal dangers. As discussed below, in addition to other legal challenges, the defense will save millions under Republican tort reform laws, how many millions will be a fight.

That likely is part of why Oberlin College’s president vowed after the punitive verdict to continue fighting and promised alumni:

This is not the final outcome. This is, in fact, just one step along the way of what may turn out to be a lengthy and complex legal process.

Post-Trial Motions

So what comes next? Several things, probably simultaneously in a flurry of post-verdict court motions.

The court will need to assess the amount of legal fees to be awarded the Gibsons, since an award of legal fees was included in the jury verdict on punitive damages. I haven’t researched it yet, so I’m not expressing an opinion, but there should be some argument over whether the Gibsons’ counsel gets straight time, time plus a so-called lodestar multiplier, or the contingency fee they presumably are charging. Among other things, there could be some theatrics if, as often happens, the plaintiffs’ counsel seeks to use the fees charged by the defense counsel as one possible benchmark for “reasonable attorney’s fees.” Legal fees could add millions to the verdict, but it’s up to the judge to decide the amount.

There also will be motions to set aside the verdict. I don’t expect those to succeed since Judge John Miraldi already denied summary judgment, a motion for a directed verdict, and motions for a mistrial and new trial. Judge Miraldi was fairly meticulous in his summary judgment decision allowing certain (but not all) of the libel claims to get to the jury because he found those statements not constitutionally protected opinion. That will be an issue on appeal, but I think Judge Miraldi got it right. I can’t imagine he’ll change his mind now. So too the other claims of intentional interference with business relations and intentional infliction of emotional distress — whatever an appeals court may do in the future, I can’t see why Judge Miraldi would reverse himself now on the legal sufficiency of the evidence.

There is an issue the defense already has complained about, that the jury was not asked to break out damages claim-by-claim, so we don’t know how much of compensatory was for which claim. Unless there is some clear law on that, which I presume Judge Miraldi would have considered, that doesn’t seem like a winning argument. The damages may have been difficult to break down claim-by-claim since the damage was one whole, and had the jury done so, the defense probably would argue there was double counting.

Republican Tort Reform Caps

More problematic for the Gibsons is the compensatory damages awarded in light of the Ohio Tort Reform legislation. We mentioned that statute in an earlier post.

Tort reform legislation has been a corporate Republican objective for decades (I stress corporate Republicanism as opposed to Tea Party or other more legal insurrectionist variants, but that’s a topic for another time).

In 2004, the Republican-led Ohio legislature passed, and in January 2005 the Republican Governor signed, a civil law torts reform bill that greatly favored the state’s businesses. You can read a detailed academic history of tort reform in Ohio here.

The main part of the tort reform was that caps were imposed on damages for non-economic losses. as well as a cap on punitive damages of 2x compensatory damages.

This law firm publication explains how the law works:

Caps On Non-Economic Damages (O.R.C. § 2315.18) S.B. 80 establishes a limit on noneconomic damages (i.e. pain and suffering, loss of consortium, etc.) only in non-catastrophic injury cases. There is no such cap for catastrophic injury tort cases. Catastrophic injury cases are those involving permanent and substantial physical deformity, loss of use of a limb, loss of a bodily organ system, or other permanent physical injuries. In non-catastrophic injury cases, the cap for non-economic damages is the greater of $250,000 or three times the plaintiff’s economic damages, up to a maximum of $350,000 per plaintiff and $500,000 per occurrence. Caps And Other Limits On Punitive Damages(O.R.C. § 2315.21) S.B. 80 establishes a limit on punitive damages for most tort claims. The amount of the cap depends on whether the defendant is a large or small employer. Punitive damages for large employers (defined as having >500 employees in the manufacturing sector or >100 employees in the nonmanufacturing sector) are limited to two times the amount of compensatory damages. For small employers (defined as having =500 employees in the manufacturing sector or =100 employees in the non-manufacturing sector), the punitive damage limit is the lesser of two times compensatory damages, or 10% of the employer’s net worth, up to a maximum of $350,000. In cases where punitive damages are sought, a bifurcated jury trial is now mandatory if requested by a party, in order to separate compensatory and punitive trial phases. S.B. 80 prohibits the imposition of multiple punitive damage awards against a defendant who already paid punitive damages for the same act or course of conduct, under limited circumstances. Post-Verdict Review of Damage Awards (O.R.C. § 2315.19) Under S.B. 80, the trial judge must now review evidence supporting an award of non-economic compensatory damages, if a defendant challenges the award as excessive. In reviewing the award, the judge is to consider various factors including whether improper “punitive” arguments were made (such as arguments asking the jury to consider the defendant’s wealth).

The law has been repeatedly upheld by the Ohio Supreme Court in limiting non-economic damages, including in a controversial case involving sexual abuse of a minor:

An Ohio Supreme Court ruling reducing damages a jury awarded to a child raped by her church pastor is a sickening miscarriage of justice: But the fault lies not with the justices, whose job is to determine whether laws are constitutional, not second-guess laws. Instead, this is a case of the Ohio legislature using too broad a brush. It’s hard to believe that the General Assembly and Gov. Bob Taft intended to protect a predator when they enacted tort reform in 2005. The law aimed to curb frivolous lawsuits and runaway jury awards over things such as defective medications, unsafe cars and slip-and-fall accidents — massive civil damages that Republican lawmakers and the insurance industry said were chasing businesses out of Ohio, hurting the economy…. Despite a jury awarding $3.5 million to the young woman, the tort reform caps mean she can collect just $250,000 in pain-and-suffering damages.

A recent Ohio Supreme Court case held that the tort reform act compensatory caps applied to defamation compensatory damages:

{¶ 22} We hold that under the plain language of R.C. 2315.18(A)(7), defamation is a “civil action for damages for injury or loss to person.” This holding, as explained above, is in accord with prior decisions of this court and several other courts that were interpreting similar language. We see no reason to overturn the well-established precedent that defamation is a “personal injury” according to the plain meaning of the term.

The Gibsons could try to come up with a theory under which the caps as applied in this case are unconstitutional and not covered by prior precedent — it will be interesting to see what arguments they come up with.

This has obvious implications for this case.

In the compensatory verdict, Allyn W. Gibson was awarded $3 million (all of which the jury designated non-economic), David Gibson $5.8 million ($1.8 million economic, $4 million non-economic), and Gibson Bros. $2,274,500 (all economic).

Here’s an example of what the damage page looked like for the individuals (there is no non-economic loss line item on the Gibson Bros form):

So none of the Gibson Bros. compensatory ($2,274,500) and David’s economic loss ($1,800,000 million) should be affected by the cap.

But Allyn’s $3 million and David’s $4 million non-economic damage awards could be subject to the cap, which arguably would reduce each to $350,000, for a total of $700,000. The $500,000 “per occurrence” cap would not seem to apply since there were multiple occurrences, though I expect the defense to argue otherwise. So unless plaintiffs can come up with some other argument, Republican tort reform may slice over $6 million off the $11 million compensatory verdict.

What about punitive damages?

The case linked above applying the tort reform caps to defamation damages did not decide whether the 2X cap for punitives would be based on the pre- or post-cap compensatory damages. That would be a huge swing. Expect the parties to argue this point.

If based on pre-cap compensatory damages, the punitive damages would be capped at $22.4 million (2X the $11.2 million compensatory). If based on post-cap compensatory damages, the punitives would be reduced for Allyn and David to $700,000 each for non-economic damages, for a total of $1.4 million. The Gibson Bros. $6,973,500 punitive damages likely will be reduced to $4,549,000 based on the 2X cap applied to the economic damages.

[added – here’s a rework of the math – maybe this time I got it right]

So, the Gibson’s run the risk of their compensatory damages being :

Gibson Bros economic damages $2,274,500

David Gibson economic damages $1,800,000

David Gibson non-economic damages (cap) $350,000

Allyn Gibson non-economic damages (cap) $350,000

Total Compensatory: 4,774,500

Plux 2X punitive cap $9,549,000

Total: $14,323,500

If the punitive calculation is based on the full compensatory, not the capped compensatory, then that would add to $12,600,000, for a total of $26,923,3500.

The lower worst-case scenario is probably a number the Gibsons would have been happy to get at the start of the trial, but having received the massive verdicts, a roughly $14 million final judgment now would seem disappointing.

Someone please check my math, you know I’m really bad a math.

This is all why I say we are at the end of the beginning. There are big legal battles to come.

What an irony it would be if a college infused at almost every level — student, faculty, administrative — with disgust for corporate capitalism and Republicans were to escape more serious financial damages because of corporate Republicans.

[Featured Image: Meredith Raimondo at trial, Photo credit Bob Perkoski for Legal Insurrection Foundation]

[Note: This post was originally published last night, but was taken private soon after publication because of new information that required a reworking]



