A Texas jury found Charter Communications responsible for $7 billion in punitive damages this week following a lawsuit from the family of Betty Jo McClain Thomas, an 83-year-old woman who was stabbed to death by one of her employees in December 2019. The $7 billion is in addition to the $375 million in compensatory damages that the jury awarded in June.
The explanation behind the staggering verdict figure goes far beyond the horrific crime committed. It also includes the company’s policies and responses to previous theft incidents and an attempted falsification of a document showing that Thomas agreed to forced arbitration that would have limited potential damages to the amount of his last bill.
While awarding the $7 billion exemplary damages for gross negligence, jurors decided that Charter had tried to force the case into arbitration by using false documents from Spectrum, its internet service provider. Charter attempted to force arbitration using a terms of service document they claimed Thomas had accepted when signing up for the service, which was allegedly extracted from its database.
During the trial, the family’s attorneys pointed out a number of inconsistencies with the document. These include dates that did not correspond to when he would have been removed from Charter’s system and a blank space where Thomas’s name should have been. In other cases, company attorneys presented a different set of terms without the arbitration clause.
While the documents were meant to represent evidence taken from Charter’s live database, they showed an address indicating the file was actually stored on someone’s home computer. At the very bottom it shows the address of the file, which reads “localhost:62220/VewContracts.aspx”.
Localhost is a loopback address, representing 127.0.0.1, and means that the request does not leave the computer it started from or access any other network or database.
A USA today report earlier this month describes the murder, committed by a Spectrum cable repairman who returned to Thomas’s home the next day after being sent for a service call to fix his fax machine. Lawyers representing Thomas’ family argued in court that the technician, Roy James Holden, learned that the woman had reported ongoing problems with his service and then used his company key card to drive one from her vans at her house, where she had caught him stealing. her credit cards, and he murdered her.
On January 3, 2020, Charter sent Thomas an overdue invoice which included a one-time charge of $58.94 for the service call.
The jury found that Charter was a proximate cause of Thomas’s death, meaning the company had committed an act or omission “that a person using ordinary care would have foreseen the injury, or a similar injury, could be anticipated”, and assigned him 90% of the responsibility. Lawyers for the plaintiff pointed to Charter’s failure to complete a background check that allegedly showed Holden had lied about his work history, and presented evidence that he repeatedly sought help from supervisors and the management due to personal issues, and told them that at one point he thought he was a Dallas Cowboys player.
Holden admitted to committing the murder and was sentenced to life in prison in April 2021.
Additionally, attorneys for Thomas’ family presented evidence that Charter Spectrum technicians had been responsible for more than 2,500 thefts from customers over several years prior to the murder, and said the company had refused to investigate. or report them to the police. The court included a spoliation order with the jury instructions, based on Charter’s destruction of evidence that should have been preserved, including video surveillance and tracking information for Holden, and found Charter in contempt for not have produced any other documents.
In a statement released after the verdict, Charter spokesperson Cameron Blanchard said:
Our hearts go out to the family of Mrs. Thomas following this senseless and tragic crime. The responsibility for this horrific act rests solely with Mr. Holden, who was off duty, and we are grateful to him for being in prison for life. While we respect the jury and the justice system, we strongly disagree with the verdict and will appeal.
Texas law and the facts presented at trial make it clear that this crime was not foreseeable – and the plaintiffs’ allegations of wrongdoing under the Charter are categorically false. We are committed to the safety of all of our clients and have taken the necessary steps, including a thorough pre-employment criminal background check which revealed no arrests, convictions or other criminal behavior. Nor does anything about Mr. Holden’s performance after he was hired suggest he was capable of the crime he committed, including more than 1,000 service calls completed without any customer complaints about his behavior.
Friday morning, Charter published its results for the second quarter of 2022, reporting revenue of $13.6 billion, “primarily driven by growth in residential, mobile and commercial revenues.” His press release did not mention the case or the verdict, and a transcript of his appeal to the results posted on Seeking Alpha shows that analysts did not ask executives about it. A Document 10-Q filed with the SEC mentioned it in the Contingencies section.
The Company has considered a variety of factors, including the legal and factual circumstances of the case, the trial record, jury verdicts, the state of the proceedings, applicable law, opinions of legal counsel, decisions of the court before and during trial, as well as the parties’ upcoming post-trial motions to determine the various grounds for appeal that the Company expects to pursue vigorously and the likelihood of a successful appeal. Based on these factors, the Company has concluded that a loss arising from this event is not probable and reasonably estimable. Accordingly, the Company has not recognized a liability for the adverse verdict in its financial statements as of June 30, 2022.