Thursday, August 11, 2022
In late June, a Texas jury found Spectrum liable for the death of one of its customers. The cable company employed an internet installer who robbed and stabbed an 83-year-old woman to death. The jury found the murderer 10% responsible and Spectrum 90% responsible. Years earlier, Spectrum had ceased industry-standard, pre-employment verification checks. Such a check would have revealed that the murderer had fabricated his work history and was fired from several jobs for theft and misconduct. The company also had notice that the murderer was suffering emotional and financial problems prior to the robbery and murder. The jury awarded $375 million in compensatory damages, of which part Spectrum was to pay $337.5 million. The jury also determined that Spectrum forged an arbitration agreement.
In late July, the jury awarded the plaintiffs $7 billion in punies. The forgery finding allowed the plaintiffs to avoid Texas's cap on punitive damages. That verdict, however, is going to be severely tested on post-trial motions and appeal. The Court's Due Process jurisprudence does not impose a hard cap, but it does set limits. In State Farm v. Campbell, the Court stated that few awards exceeding a single-digit ratio between punitive and compensatory damages will satisfy Due Process. It further stated that an award of more than four times might be close to the line of constitutional impropriety, and that when compensatory damages are substantial, a one-to-one ratio is likely the outermost limit. The current ratio is approximately 20:1.
Awards of this magnitude are often reduced. The largest punitive damages award to an individual of which I am aware is a 2002 California jury verdict of $28 billion against Phillip Morris. Ultimately, after 9 years of appeals, the award was reduced to $28 million. The plaintiff had died years earlier.
Cara Salvatore at Law 360 has the story (behind a pay wall).