PORTLAND, Ore. (CN) - "You will learn that $25 million means different things to different people," the plaintiff's attorney began, in the first day of the punitive damages phase of a trial in which the jury found the Boy Scouts of America negligent in allowing an assistant scoutmaster to sexually abuse a boy in the 1980s. Attorney Kelly Clark is demanding $25 million in punitive damages for his client.
Clark continued, "BSA [the Boy Scouts of America] is a corporation worth $929 million, with yearly revenues of $400 million; monthly revenue of $35 million; branded merchandise sales of $150 million; unrestricted liquid assets of $400 million; and an annual change in asset value of $34 million. The Chief Scout Executive Robert Mazzuca makes $1.2 million and their art collection alone is worth $45 million."
Clark was referring to the Boy Scouts' collection of Norman Rockwell paintings, icons of the virtues of scouting life.
"What we're requesting is $25 million to get the message across to this billion-dollar corporation," Clark said. "The amount we are asking for is less than one year of investment income, less than one month's revenue."
Clark asked the jury, "Have they accepted responsibility? No. Look at their statement made within a day after your verdict."
Defense attorney Charles Smith objected, and asked that the jury be cleared from the court.
After Multnomah County Judge John Wittmayer sent the jury out, Smith said that the statement Clark intended to read had no probative value and was meant to inflame the jury.
Clark countered that the fact that despite the jury verdict, the Scouts continued to deny responsibility, was directly relevant to how high the damages would have to be to make them accept their responsibility and change their policies.
Judge Wittmayer agreed with Clark that the statement was relevant. He rather testily told Smith, "The BSA invited this response by posting a statement on their Web site commenting on an ongoing trial."
Late last week the judge asked Smith to ask his clients to take down the statement, which they did.
After the jury returned Clark continued to read from the statement: "'We are gravely disappointed with the verdict ... Based on the standard of care of that time, the BSA believes it acted responsibly and that the evidence presented during the trial does not justify the verdict.'
"Have they apologized? Quite the opposite, as their statement suggests. They see it as society's problem, not theirs.
"Have they acknowledged a fundamental problem? No. They continue to say that the safety of children in their care is not in question.
"Have they done everything possible to address the problem? No. They do not require mandatory child abuse training. They have not conditioned charter renewals on training. They have performed no analysis on the lessons to be learned from the Ineligible Volunteer files. To this day they have not performed an analysis to see how to make the scouts safer."
The first witness for the plaintiff was Serena Morones, a forensic accountant and expert in corporate valuations, who testified to the wealth of the Boy Scouts, which Clark listed in his opening remarks. She said the Scouts control total assets of $929 million, including $47 million in cash, an investment portfolio worth $633 million, and real estate booked at an original cost of $100 million.
Asked to evaluate the impact of a $25 million verdict on the financial health of the organization, Morones said, "They are very secure financially for a nonprofit organization."
She calculated that based on a conservative 5 percent return on its investment portfolio, the Scouts could recoup a $25 million dollar in about 9½ months.
She noted that the Scouts maintain a $67 million reserve fund for legal liabilities.
After establishing the ability of the defendant to pay substantial punitive damages, Clark's team claimed that the Scouts never developed effective plans or policies to deal with abuse in its troops.
Playing the videotaped deposition of Martin Walsh, manager of the Membership Impact Department at the Boys Scouts national headquarters, plaintiff's attorney Paul Mones asked Walsh when the Boy Scouts recognized they had a problem with sexual abuse.
Walsh replied, "We don't recognize it as a problem any bigger than it is in society. It's no more of a problem than in it is in society in general."
Mones asked what the first policies were that the Scouts put in place to prevent abuse.
Walsh said that parent involvement had always been key to the safety of Scouts. "Parent involvement could help act as a barrier to anything such as child abuse. Their involvement is a barrier to it occurring. It would help prevent it from occurring when they are on outings and meetings."
Mones then asked, "Do you have any understanding where Scouts were being molested?"
"No, those details are in the files," Walsh said, referring to the Ineligible Volunteer files.
"Are you in charge of the maintenance of the IV files?"
"The administration of the files ..."
"Do you have access to the files?" asked Mones.
"But could you have access to the files?"
Walsh replied, "If I wanted to but I don't."
Walsh said the Scouts had no formal policy on whether suspected abuse should be reported to law enforcement.
"The local council would inform agencies as required by local law ... if authorities did not request the information, the BSA did not turn it over."
Mones asked what would happen if a member of a local troop called national headquarters to report a case of abuse.
Walsh said they would be referred back to local Scout officials, and that the national organization would do no investigation, but would place a report in the IV files, if local Scout leaders asked that they do so.
This led Mones to ask, "Are the guidelines for reporting suspected abuse discretionary or not?"
"It's their decision as the local Scout executive, so they are the guidelines."
"Is there discretion on reporting sexual abuse of Scouts to the national council?"
"It is my testimony that there are guidelines. Whether or not they use that guideline is discretionary, because the local council is not owned by the national council," Walsh said.
Mones asked if the IV files were ever shown to mental health experts, and whether any analysis was ever done to understand the circumstances of abuse and how policies could be developed to avoid abuse.
Walsh replied, "That's not the purpose of the files, so no."
"Is the safety of Scouts the purpose of the IV files?" Mones asked.
"That's our primary purpose in everything we do," Walsh said.
"But did BSA ever look at the files to see how it could avoid future sexual molestation of Scouts by scoutmasters or adult volunteers. ... Did the BSA ever inform local troops about the IV file?"
"Not to my knowledge," Walsh said.
Mones then grilled Nathaniel Marshal, the man responsible for maintaining the IV files, whether any analysis had been done on the files between 1986 and 2005 to determine how many abusers were in the files each year, or if the numbers had gone up or down on a yearly basis.
Marshal said that he thought the numbers had gone down over the past few years but said he did not have the data available to support his hunch.
Mones asked if in the years 2005 to 2009, the years for which Marshal maintained the files, whether the numbers of incidents of abuse added to the files increased or decreased? Were more single men implicated than married men? How many alleged abusers had children who were in the Scouts?
To all of these questions Marshal responded, "I don't know."
When asked why no analysis was ever done on the files, Marshal replied, "No one ever asked for it."
Finally, the plaintiffs addressed the guidelines, or preventive rules the Scouts initiated in the late 1980s to avoid molestation.
Mones asked Marshal if the IV files had ever been analyzed to determine if the "Two Deep Rule" which requires that all interactions with children take place in the presence of two adults, or its corollary the "One on One Contact Rule" which forbids any interaction between one adult and one child no matter how short the duration, had had any impact on the incidents of abuse.
Marshal replied that no such analysis had been done, nor had the Youth Protection Task Force, a group formed by the Scouts to train leaders in recognizing the signs of sexual abuse, ever asked for an analysis of the files to determine if their program was effective.
On cross-examination, defense attorney Smith asked Marshal, "What is the sole purpose of the IV files?"
"To keep those out of the membership who are unfit for any reason whatsoever," Marshal said.
On redirect, Mones asked if the Scouts just collected the information and filed it. Marshal replied that that was part of what they did.
In his final question to Marshal, Mones asked, "None of the information in the files was to be used to prevent future abuse?"
Smith objected, but before the judge rule, Mones said, "Plaintiff rests."
Because the plaintiff's case ended more quickly than had been anticipated, the defense asked for a long lunch break. Afterward, the defense began to present witnesses who testified to their experience as Scout leaders and about training they received to recognize and respond to child sexual abuse.
The defense will present the bulk of its case today (Wednesday).
Judge Wittmayer said he hopes the jury can begin deliberations on Thursday.