Charter Communications was once on the hook for over $7 billion in a case involving a former cable technician who murdered an elderly customer in her home. But Charter is now on the verge of settling the lawsuit for less than $262 million, an amount that will apparently be fully covered by the company’s insurers.
A Dallas County Court jury last year decided that Charter should pay the victim’s family and estate $7 billion in punitive damages and $337.5 million in compensatory damages. A judge lowered the total amount to over $1.1 billion.
Charter said it planned to appeal the $1.1 billion judgment, and the sides held settlement talks. The family apparently opted to take a smaller amount instead of risking an appeal that would drag out the case longer and potentially result in lower damages or an overturned verdict.
Charter described the results of settlement talks in a Securities and Exchange Commission filing on Friday. Charter said that plaintiffs’ monetary demands steadily decreased in the months after the verdict and that Charter’s insurers pressured the cable company to strike a deal. There’s now a tentative settlement between the plaintiffs and a Charter subsidiary referred to as Charter Communications, LLC (CC, LLC):
On January 11, 2023, and after issuing a series of decreasing settlement demands over several months, the plaintiffs issued a new, lower settlement demand to CC, LLC and its insurers, and then on January 18, 2023, plaintiffs also filed a notice of remittitur with the court to further reduce the judgment to $262 million, comprised of $87 million in actual damages, and $175 million in punitive damages. On January 24, 2023 and upon the insistence and demand of its insurers, CC, LLC reached a tentative settlement of this lawsuit at an amount substantially less than the reduced judgment and within CC, LLC’s insurance coverage.
“In the event the settlement is not ultimately finalized, CC, LLC will continue to vigorously defend this lawsuit including pursuing all available appeals,” Charter’s filing also said. Charter said it previously “posted a $25 million bond to stay the judgment pending appeals.”
A Light Reading article about the Charter filing quoted a New Street Research analyst as writing that the settlement amount is “within Charter’s insurance coverage and shouldn’t cost Charter anything… This settlement should reduce any overhang there might have been on the stock due to the lawsuit.” Charter is the second biggest cable company in the US and reported revenue of $54 billion and net income of $5.1 billion in 2022.
Jury found Charter committed forgery and gross negligence
Former Charter Spectrum technician Roy Holden pleaded guilty to the 2019 murder of 83-year-old customer Betty Thomas and was sentenced to life in prison in April 2021. Charter was accused of hiring Holden without verifying his employment history and ignoring a series of red flags about his behavior, which included stealing credit cards and checks from elderly female customers.
While Judge Juan Renteria lowered the awarded damages, he ruled in favor of the plaintiffs and did not dispute the jury’s conclusions—that “Mrs. Thomas’s death was caused by Charter’s gross negligence” and that “Charter knowingly or intentionally committed forgery with the intent to defraud or harm Plaintiffs.”
“This was a shocking breach of faith by a company that sends workers inside millions of homes every year,” one of the family’s lawyers said after the jury verdict. The family’s law firm said that when Thomas caught Holden stealing her credit cards from her purse, he “brutally stabbed the 83-year-old customer with a utility knife supplied by Charter Spectrum and went on a spending spree with her credit cards.”
After the family sued, “Charter Spectrum attorneys used a forged document to try to force the lawsuit into a closed-door arbitration where the results would have been secret and damages for the murder would have been limited to the amount of Ms. Thomas’s final bill,” the law firm said.
Charter said in a statement to media that the “crime was not foreseeable” and that Holden’s pre-employment criminal background check “showed no arrests, convictions, or other criminal behavior.” Charter also said Holden had “more than 1,000 completed service calls with zero customer complaints about his behavior.”
Disclosure: The Advance/Newhouse Partnership, which owns 12.4 percent of Charter, is part of Advance Publications. Advance Publications owns Condé Nast, which owns Ars Technica.