A Texas jury this week held Charter Communications liable for $7 billion in punitive damages following a lawsuit brought by 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 damages awarded by the jury in June.
The explanation behind the verdict’s staggering figure goes far beyond the heinous crime committed. It also includes the company’s policies and responses to past theft incidents and an attempt to falsify a document showing Thomas has agreed to forced arbitration that would have limited the potential damages to the amount of her latest bill.
While awarding the $7 billion in exemplary damages for gross negligence, the jurors decided Charter was trying to force the case into arbitration using forged documents from the Internet service provider Spectrum. Charter attempted to enforce arbitration using a terms of service document that they claimed Thomas had agreed to when he signed up for service, which was supposedly pulled from the database.
During the trial, family lawyers pointed to a number of inconsistencies with the document. Those included dates that didn’t match the times it was supposedly pulled from Charter’s system, and an empty spot where Thomas’s name should have been. In other cases, the company’s attorneys presented a different set of terms without the arbitration clause.
Though the documents were believed to represent evidence from Charter’s live database, they showed an address indicating that the file was actually stored on someone’s personal computer. At the very bottom, the file address is displayed, with the text “localhost:62220/VewContracts.aspx”.
Localhost is a loopback address, which represents 127.0.0.1, and means that the request does not leave the computer it was started on or access any other network or database.
A USA today report from earlier this month outlines the murder, committed by a Spectrum cable repairman who returned to Thomas’s house the day after being sent for a service call to repair her fax machine. Lawyers representing Thomas’ family argued in court that the technician, Roy James Holden, learned that the woman had reported ongoing problems with her service, and then used his company key card to drive one of his vans to her home. where she caught him attempting to steal her credit cards, and he killed her.
On January 3, 2020, Charter Thomas sent an overdue bill with a one-time fee of $58.94 for the service call.
The jury found Charter to be a direct cause of Thomas’ death, meaning that the company committed an act or omission “that a person using ordinary care could have foreseen the injury, or similar injury,” and awarded 90 percent of the responsibility. The prosecution’s attorneys pointed to Charter’s failure to conduct a background check that would show Holden lied about his employment history, and submitted evidence that he had repeatedly sought help from supervisors and management due to personal issues, telling 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.
In addition, attorneys for Thomas’ family presented evidence that Charter Spectrum technicians were responsible for more than 2,500 thefts against customers over several years before the murder, and said the company refused to investigate or report them to police. The court added a looting order to the jury’s instructions, based on Charter’s destruction of evidence that should have been preserved, including video surveillance and tracking information for Holden, and found Charter guilty of contempt for failing to produce other documents.
In a statement released after the verdict, Charter spokesman Cameron Blanchard said:
Our hearts go out to Mrs Thomas’ family after this senseless and tragic crime. Responsibility for this terrible act rests solely with Mr. Holden, who was off duty, and we’re thankful he’s in prison for life. While we respect the jury and the justice system, we strongly disagree with the verdict and are appealing.
Texas law and the facts presented at trial clearly show that this crime was unforeseeable – and the plaintiffs’ allegations of misconduct by Charter are categorically false. We are committed to the safety of all our customers and have taken appropriate steps, including a thorough pre-employment criminal background check, which reveals no arrests, convictions or other criminal conduct. Nor did anything in Mr. Holden after he was believed to be capable of the crime he committed, which included more than 1,000 completed service calls with no customer complaints about his behavior.
On Friday morning, Charter announced its second quarter 2022 earnings results, with revenue of $13.6 billion, “driven primarily by growth in residential, mobile and commercial revenues.” The press release did not mention the case or the verdict, and a transcript of the earnings call posted to Seeking Alpha shows that analysts did not ask executives about it. A 10-Q filing with the SEC noted it under the Contingency section.
The company has considered several factors, including the legal and factual circumstances of the case, the trial record, the jury’s rulings, the status of the proceeding, applicable law, counsel’s views, the court’s rulings prior to at and during the trial, along with upcoming motions after the trial of the parties in determining the various grounds of appeal that the company expects to vigorously follow and the likelihood of a successful appeal. Based on these factors, the Company has concluded that a loss from this case is not likely and cannot be reasonably estimated. Therefore, the Company has not accrued any liability for the unfavorable opinion in its financial statements as at June 30, 2022.