Charter Spectrum hit with $7 billion in punitive damages over 2019 murder

A jury in Texas found Charter Communications liable for $7 billion in punitive damages this week as the result of a lawsuit from the family of Betty Jo McClain Thomas, an 83-year-old woman who was stabbed to death by one of its employees in December 2019. The $7 billion is in addition to $375 million in compensatory damages the jury assigned in June.

The explanation behind the staggering figure of the verdict goes well beyond the horrific crime committed. It also includes the company’s policies and responses to previous incidents of theft and an attempt to forge a document showing Thomas agreed to forced arbitration that would have limited potential damages to the amount of her last bill.

While assigning the $7 billion in exemplary damages for gross negligence, jurors decided that Charter tried to compel the case into arbitration using forged documents from Spectrum, its internet service provider. Charter tried to compel arbitration using a terms of service document they claimed Thomas had agreed to while signing up for service, which was supposedly pulled from its database.

During the trial, lawyers for the family pointed out a number of inconsistencies with the document. Those include dates on it that didn’t match with the times when it was supposedly pulled from Charter’s system and a blank spot where Thomas’ name should have been. In other cases, the company’s lawyers presented a different set of terms without the arbitration clause.

While the documents were supposed to represent evidence taken 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, it shows the file address, which reads “localhost:62220/VewContracts.aspx.”

Localhost is a loopback address, representing 127.0.0.1, and means the request isn’t leaving the computer it started from or accessing any other network or database at all.

A USA Today report from earlier this month outlines the murder, committed by a Spectrum cable repairman who returned to Thomas’ the day after being sent for a service call to fix her fax machine. Lawyers representing Thomas’ family argued in court that the technician, Roy James Holden, learned the woman had reported ongoing issues with her service, then used his company key card to drive one of its vans to her house, where she caught him attempting to steal her credit cards, and he murdered her.

On January 3rd, 2020, Charter sent Thomas an overdue bill that included a one-time charge of $58.94 for the service call.

The jury found Charter a proximate cause in Thomas’ death, meaning the company committed an act or omission “that a person using ordinary care would have foreseen the injury, or some similar injury, could be anticipated,” and assigned it 90 percent of the responsibility. The plaintiff’s lawyers pointed to Charter’s failure to perform a background check that would’ve shown Holden lied about his work history, and submitted evidence he’d repeatedly sought help from supervisors and management due to personal problems, and told them he at one point thought he was a Dallas Cowboys player.

Holden admitted committing the murder, and was sentenced to life in prison in April, 2021.

In addition, the lawyers for Thomas’ family presented evidence that Charter Spectrum techs had been 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 the police. The court included a spoliation order with the jury instructions, based on Charter’s destruction of evidence that should’ve 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 spokesperson Cameron Blanchard said:

Our hearts go out to Mrs. Thomas’ family in the wake of this senseless and tragic crime. The responsibility for this horrible act rests solely with Mr. Holden, who was not on duty, and we are grateful he is in prison for life. While we respect the jury and the justice system, we strongly disagree with the verdict and will appeal.

The law in Texas and the facts presented at trial clearly show this crime was not foreseeable — and the plaintiffs’ claims of wrongdoing by Charter are categorically false. We are committed to the safety of all our customers and took the necessary steps, including a thorough pre-employment criminal background check — which showed no arrests, convictions or other criminal behavior. Nor did anything in Mr. Holden’s performance after he was hired suggest he was capable of the crime he committed, including more than 1,000 completed service calls with zero customer complaints about his behavior.

On Friday morning, Charter released its earnings results for the second quarter of 2022, reporting $13.6 billion in revenue, “driven primarily by growth in residential, mobile and commercial revenues.” Its press release did not mention the case or verdict, and a transcript of its earnings call posted to Seeking Alpha shows analysts did not ask executives about it. A 10-Q document filed with the SEC did mention it under the Contingencies section.

The Company has considered various factors, including the legal and factual circumstances of the case, the trial record, the jury verdicts, the status of the proceedings, applicable law, the views of legal counsel, the court’s rulings in advance of and during the trial, along with upcoming post-trial motions of the parties in determining the various grounds for appeal that the Company expects to vigorously pursue and the likelihood of a successful appeal. Based on these factors, the Company has concluded that a loss from this case is not probable and reasonably estimable. Therefore, the Company has not accrued a liability for the adverse verdict in its financial statements as of June 30, 2022.