Oberlin College, known as a bastion of progressive politics, said on Thursday that it would pay $36.59 million to a local bakery that said it had been defamed and falsely accused of racism after a worker caught a Black student shoplifting.

That 2016 dispute with Gibson’s Bakery resulted in a yearslong legal fight and resonated beyond the small college town in Ohio {snip}

The decision by the college’s board of trustees, announced Thursday, came nine days after the Ohio Supreme Court had declined to hear the college’s appeal of a lower-court ruling.

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The case hinged on whether Oberlin officials had defamed the bakery by supporting students who accused it of racial profiling, and the verdict, essentially finding that the officials had done so, may make other colleges and universities think twice about joining student causes, legal experts said.

“Such a large amount is certainly going to make institutions around the country take notice, and to be very careful about the difference between supporting students and being part of a cause,” said Neal Hutchens, a professor of higher education at the University of Kentucky. “It wasn’t so much the students speaking; it’s the institution accepting that statement uncritically. {snip}”

Professor Hutchens said it also made a difference that Gibson’s was a small family business, not a large multinational corporation like Walmart or Amazon, which would be better able to sustain the economic losses from such a protest.

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The incident that started the dispute unfolded in November 2016, when a student tried to buy a bottle of wine with a fake ID while shoplifting two more bottles by hiding them under his coat, according to court papers.

Allyn Gibson, a son and grandson of the owners, who is white, chased the student out onto the street, where two of his friends, also Black students at Oberlin, joined in the scuffle. The students later pleaded guilty to various charges.

That altercation led to two days of protests; several hundred students gathered in front of the bakery, accusing it of having racially profiled its customers, according to court papers.

The lawsuit filed by Gibson’s contended that Oberlin had defamed the bakery when the dean of students, Meredith Raimondo, and other members of the administration took sides in the dispute by attending the protests, where fliers, peppered with capital letters, urged a boycott of the bakery and said that it was a “RACIST establishment with a LONG ACCOUNT OF RACIAL PROFILING and DISCRIMINATION.”

Gibson’s also presented testimony that Oberlin had stopped ordering from the bakery but had offered to restore its business if charges were dropped against the three students or if the bakery gave students accused of shoplifting special treatment, which it refused to do.

The store said that the college’s stance had driven customers away, for fear of being perceived as supporting an establishment that the college had tarred as racist.

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In the spring, a three-judge panel of the Ohio Court of Appeals confirmed the jury’s finding, after a six-week trial, that Oberlin was liable for libel, intentional infliction of emotional distress and intentional interference with a business relationship — that it had effectively defamed the business by siding with the protesters. {snip}

In its ruling, the Court of Appeals agreed that students had a right to protest. But the court said that the flier and a related student senate resolution — which said that the store had a history of racial profiling — were not constitutionally protected opinion.

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