Utopia Talk / Politics / Tort reform in the US?

murder Member	Wed Sep 21 06:00:18 Yes please! ============================ Judge rules Charter must pay $1.1 billion after murder of cable customer Judge lowers $7B award but agrees Charter is liable. Charter Communications must pay over $1.1 billion to the estate and family of an 83-year-old woman murdered in her home by a Spectrum cable technician, a Dallas County Court judge ruled yesterday. A jury in the same court previously ordered Charter to pay $7 billion in punitive damages and $337.5 million in compensatory damages. Judge Juan Renteria lowered the award in a ruling issued yesterday. The damages are split among the estate and four adult children of murder victim Betty Thomas. Renteria did not change the compensatory damages but lowered the punitive damages awarded to the family to $750 million. Pre-judgment interest on the damages pushes Charter's total liability to over $1.1 billion. It isn't surprising that the judge lowered the payout, in which the jury decided punitive damages should be over 20 times higher than what Charter is liable for in compensatory damages. A nine-to-one ratio is often used as a maximum because of a 2003 US Supreme Court ruling that said: "In practice, few awards exceeding a single-digit ratio between punitive and compensatory damages, to a significant degree, will satisfy due process." Former Spectrum technician Roy Holden pleaded guilty to the 2019 murder of 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. (More details on the murder are in our previous two articles on the topic.) Jury: Charter guilty of “gross negligence” and forgery Charter has already paid a portion of the judgment. "After the jury verdict, and before the entry of this Judgment, Plaintiffs have voluntarily remitted a substantial amount of the exemplary damages pursuant to Rule 315," Renteria wrote. Judge Renteria did not dispute the jury's conclusion that Charter was guilty of "gross negligence" in the murder of Thomas. "The Court, after considering the evidence introduced at trial, the verdict of the jury, the voluntary remittitur of the Plaintiffs, the written and oral arguments of counsel, and the applicable law, is of the opinion that judgment should be entered in favor of the Plaintiffs," Renteria wrote. The jury also found that "Charter knowingly or intentionally committed forgery with the intent to defraud or harm Plaintiffs," Renteria wrote. The family's attorney previously said that "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 compensatory damages totaled $375 million, with Charter responsible for $337.5 million and Holden for $37.5 million. Charter may end up having to pay that $37.5 million as well, though; the judge's ruling said plaintiffs are entitled to the $37.5 million as "actual damages against either Roy James Holden or Charter Communications, LLC, jointly and severally." Charter still plans to appeal the ruling, a company spokesperson told Ars today. Charter previously said in a statement to Ars 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." http://ars...fter-murder-of-cable-customer/
Seb Member	Wed Sep 21 10:48:53 Nah. The bulk of it is because they committed fraud trying to get the case dropped. Companies should be hit hard for that.
Seb Member	Wed Sep 21 10:51:09 The compensatory damages of 375m, punitive is 750m.
Sam Adams Member	Wed Sep 21 11:24:38 "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." Ya thats worth a solid buttfucking.
Seb Member	Wed Sep 21 11:31:44 Companies have a lot stacked in their favour over consumers as it is - especially when anti-trust laws have been so watered down and consumer rights circumvented. Using market power to force binding arbitration clauses etc. is bad enough - being caught knowingly lying about them when they don't even apply needs to result in huge penalties.
habebe Member	Wed Sep 21 12:32:15 I think we are all agreement the original figure should stand.
murder Member	Wed Sep 21 12:48:35 No I don't think we are.
habebe Member	Wed Sep 21 13:00:48 Murder, Well you always find a reason to be argumentative.
earthpig GTFO HOer	Wed Sep 21 13:30:10 $1.1b for a single set of very poor choices from a single regional manager is already a good "buttfucking," or whatever terms we want to use. Quick google numbers: The company has about 100k employees, and at $1.1b it's about 2% of the company's total valuation.
Seb Member	Wed Sep 21 13:38:16 Depending on how egregious the fraud, I'd say punitive damages should be higher. Judicial rulings and legislative changes have given companies so much leeway their accountability for breaching should be huge.
Seb Member	Wed Sep 21 13:56:55 It's only three times the damages. So if the chance of such fraud working is 75% then it makes sense to do the fraud every time. Shareholders have limited personal liability, but the quid pro quo must be that companies are held liable, and deliberate fraud undermining that should result in heavily punitive sanctions such that shareholders are very careful to ensure such people do not manage their company on their behalf. Hire better people, train them, have decent compliance teams, and make them aware that while cost mitigation and profit is to be sought, not at the expense of breaking the law.
murder Member	Wed Sep 21 14:21:49 "Shareholders have limited personal liability, but the quid pro quo must be that companies are held liable, and deliberate fraud undermining that should result in heavily punitive sanctions such that shareholders are very careful to ensure such people do not manage their company on their behalf." There's a pretty significant gap between heavily punitive and the ridiculous numbers being thrown around in this case. There's also the option of criminally sanctioning the people who perpetrated criminal acts.
murder Member	Wed Sep 21 14:25:04 You could subtract $1 billion from the award and it would still be heavily punitive.
earthpig GTFO HOer	Wed Sep 21 14:27:44 "There's also the option of criminally sanctioning the people who perpetrated criminal acts." I think it would be reasonable in this case (at least to entertain it) to go after specific individual human bad actors.
murder Member	Wed Sep 21 14:29:40 "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." Good luck with transitioning criminals back into society if hiring one means that you need to carry liability insurance to cover several billion dollars. "He had stolen credit cards and checks from little old ladies. They should have known he had murder in his heart!" FOH!
murder Member	Wed Sep 21 14:31:53 "I think it would be reasonable in this case (at least to entertain it) to go after specific individual human bad actors." Yes. And at the very least Charter's attorneys should lose their licenses.
Seb Member	Wed Sep 21 15:26:43 murder: "There's a pretty significant gap between heavily punitive and the ridiculous numbers being thrown around in this case." Their revenue each year is 48m, 1.4bn net income, 56bn market cap. It doesn't pay dividends, so it's all about share price and a 2% one-off hit to valuation is in the noise. So, where is the deterrence effect to the board on making sure they don't let the management do shady shit that they think helps cut costs and keep earnings high? As a shareholder, do you look at this and think "damn this is a major structural problem I want fixed at the AGM" or do you think "eh, win some, lose some". The doctrine of limited liability for shareholders, fiduciary duty of shareholders, incentivisation schemes etc. stack all the incentives for criminal behaviour - lax regulation and the incredible barriers that US law allows to prevent companies ever having to account for malfeasance exacerbates it. So when they get caught doing blatantly illegal shit, it should be a near death experience for shareholders. Otherwise it's just a cost of doing business.
Seb Member	Wed Sep 21 15:35:48 EP: "I think it would be reasonable in this case (at least to entertain it) to go after specific individual human bad actors." That too, but quite probably that will turn out to be some junior instructed to type something up etc. and in practice all you can prove is negligence - which may have some sanction attached. But even if the individual in management gets fired or some kind of criminal sanction - they will walk away very well off overall - and the incentive structure remains in place and people will still behave like this. Ultimate accountability is the shareholders via the board - and what makes them sit up and take notice and *change* how things are done is what will make the difference. It's a cable company - and as I understand that is a virtual monopoly. So it is not like there is even competition: "I won't go with them, they cover up their staff doing murders". "Good luck with transitioning criminals back into society if hiring one means that you need to carry liability insurance to cover several billion dollars." £350m - the only reason they have more is because they got caught committing fraud to try and cover up their liability - which is uninsurable. And I suspect if they had actually done their due diligence - they could have hired him, he could have committed the murder, and they would not have been liable at all. Plus, being re-integrated into society doesn't mean you get your pick of roles. If you are done for financial crimes, you aren't going to be a banker. Kiddy fiddlers, they don't get to be teachers. People who have a history of robbing little old ladies probably shouldn't be hired to go to little old ladies houses. There is construction work, retail, working in an amazon warehouse - plenty of jobs that conviction would carry less risk.
Habebe Member	Wed Sep 21 15:37:26 Seb is actually making really good sense here. The point it to make it not worth the risk for the next corporation to act in such a manner. Not a calculated risk worth taking.
murder Member	Wed Sep 21 15:49:04 "Their revenue each year is 48m, 1.4bn net income, 56bn market cap." None of this should factor into anything. The only thing that matters is what they did wrong and what they should be held responsible for. "So when they get caught doing blatantly illegal shit, it should be a near death experience for shareholders. Otherwise it's just a cost of doing business." This is just wrong. You can't just go around punishing people of companies excessively because they happen to be wealthy or huge. An employee of theirs murdered a woman while on the job. They tried to pull some bullshit with a fraudulent document to force the case into arbitration. That's it. It shouldn't matter what their market cap is or their annual revenue. If we nailed a company for $1 billion every time they were responsible for a death or every time they committed fraud, we wouldn't have any companies left. There isn't a company in the world that wouldn't feel a $100 million hit. There isn't a company in the world that would want to make a habit out of those types of payouts. And usually awards for deaths and/or fraud are a tiny fraction of that.
murder Member	Wed Sep 21 15:54:30 They don't have one set of cable technicians for little old ladies homes and another set for everyone else. And like I said before, it is preposterous to conclude that murder was foreseeable based off of financial crimes.
earthpig GTFO HOer	Wed Sep 21 15:55:42 " As a shareholder, do you look at this and think "damn this is a major structural problem I want fixed at the AGM" or do you think "eh, win some, lose some". " 1 murderer among 100k employees honestly *should* be considered "win some, lose some, shit happens." Whack a mole vigorously versus nuke the entire prairie. California's annual homicide rate is 6 per 100k. Mississippi's annual rate is 20 per 100k. Maine is at 1.6 per 100k. This company is looking at 1 in 100k total, non-annualized (if there's a pattern that I'm unaware of, I'll change my tone quickly). I 100% concur that there should be deterrence, it's a matter of scale.
murder Member	Wed Sep 21 15:56:26 Unless the guy had beat up the old ladies to take their credit cards and checks, I just don't see how they can be expected to know not to hire the guy. And yes, this is going to have a chilling effect on the effort to get convicts jobs. Who wants to put themselves at risk like this?
earthpig GTFO HOer	Wed Sep 21 15:58:58 Having a *murder* rate lower than Main's *annual homicide* rate is murder and dude who did it should go to prison for a very very long time, but at the corporate level of 100k employees, especially if it's not part of a pattern of negligence (see: PG&E as one example), this is a speeding ticket level offense. Companies need to be allowed to fuck up, and need to be allowed to have employees fuck up. Issue speeding tickets accordingly. Fucking up is part of the innovative process, etc. Bring the wrath of vengeful justice down if there's patterns or intent though, 100%, yes, absolutely.
earthpig GTFO HOer	Wed Sep 21 15:59:56 Somehow strings of my words got transposed and cut out, huh.
Habebe Member	Wed Sep 21 16:02:16 "None of this should factor into anything. The only thing that matters is what they did wrong and what they should be held responsible for." Realistically that leads to pointless punishments. The point of punitive damages is to punish, we punish to disencentivize future acts. Personally I'm more concerned with the intentional act of fraud. We do agreenrhe attorneys involved should lose their licenses.
Habebe Member	Wed Sep 21 16:04:46 EP, I agree about being able to fuck up, in regards to the employees actions. The intentional fraud after the fact should be severely punished though. Otherwise we incentivize a cost risk analysis decision to have more companies commit fraud like that in the future.
earthpig GTFO HOer	Wed Sep 21 16:11:19 "The intentional fraud after the fact should be severely punished though." Fair point.
murder Member	Wed Sep 21 16:59:55 "Otherwise we incentivize a cost risk analysis decision to have more companies commit fraud like that in the future." That much I agree with. But that can be taken care of with a thorough investigation ... with the bill going to the company.
Habebe Member	Wed Sep 21 18:48:44 Ok so let's recap. A company needs leeway to make "mistakes" on hiring, especially with such a large group and They still can't predict the guy would snap like that. This isn't an issue that is easily preventable by punitive damages, they already have good incentives to not murder their customers. However the cover up involving fraud should be punitive so that when companies make the cost benefit analysis which they will anyway, on whether or not to do act legally or be fraudulent, its more of a risk than it's worth and they hopefully just bite the bullet and act appropriately. The over riding theme being what can reasonably be prevented by such actions. We're all good, snacks are in the lobby, tour feature film will start 15 minutes, we have a 3 hour podcast on dirt!
murder Member	Wed Sep 21 19:22:51 "... they already have good incentives to not murder their customers." Finally something we can all agree on. :o)
earthpig GTFO HOer	Wed Sep 21 19:24:08 What an unusual thing. Consensus.
Habebe Member	Wed Sep 21 19:27:43 Yeah, maybe Seb will come in and screw it up somehow.
earthpig GTFO HOer	Wed Sep 21 22:09:31 Rugian in the past has been known to start randomly calling people cunts.
Habebe Member	Wed Sep 21 22:30:59 That's how I imagine him in the real world. Going to work, grocery shopping etc. Just walking around calling ppl cunts.
Seb Member	Thu Sep 22 01:15:31 Murder: "None of this should factor into anything. The only thing that matters is what they did wrong and what they should be held responsible for." So what they did was lie to evade the law. But PLC's vary in size and resources from multinational companies with trillions to penny stocks. The whole point of punitive damages is to scale the fine to be painful. Otherwise what is a deterrent to breaking the law is instead just an additional cost to factor in a sustainable business model. So I disagree. The point isn't the fine fitting the damage, the point is the impact of the fine on the company should be punitive.
Seb Member	Thu Sep 22 01:27:50 "You can't just go around punishing people of companies excessively because they happen to be wealthy or huge." Particularly under US laws, companies are effectively psychopaths. Shareholders bare no personal liability; boards and senior management have a legal responsibility to maximise shareholder value; incentive structures put huge rewards on things that jack share price. They cannot be relied upon to obey laws out of moral conscience, and that structure creates huge internal incentives for corporate officers to break the law - using the kind of resources no actual person has access to. Earthpig: One murder is one thing. Committing fraud to try and evade legal responsibility is another entirely. And the initial issue isn't that an employee randomly murdered someone, it is that the company failed to carry out it's own states due diligence process. It's the difference between a school where a teacher molesta the kid, and a school which hired an convicted paedophile because it has neglected to do proper background checks or acted on them, who then molested a kid. The problem with the norms of US shareholder capitalism where value isn't often returned by dividend or regular flow of income to shareholders, but by stock value via buybacks etc. is that one off fines don't effect share price that much. So if the goal is to add counterbalancing incentives into corporate culture they need to be huge.
Habebe Member	Thu Sep 22 02:09:33 Seb , The problem with your analogy is that the guy never murdered anyone before. If verifying work history is the law, fine, it seems a bad law, but the law is the law. That said I don't believe it actually is the law. At least it doesn't say so in the article. It would be like saying we had a teacher writing fake checks and then she gave a student a handy in the closet. They are different offenses. The forgery/fraud? We all agree that's a crime and I agree with your stance it needs to be proportionate so as to be effective.Basically enough to make it not worth the risk for other companies.
Seb Member	Thu Sep 22 02:20:07 Habebe: As I understand it though, it's not that they made mistakes in their due diligence, it's that they did not follow their own stated due diligence process.
Seb Member	Thu Sep 22 02:43:07 Habebe: Not really, it's pretty conceivable that a guy that has robbed old ladies, sent to an old ladies home with a cover for being granted entry, might try to rob her and in so doing might commit violence and in so doing might kill. Its not the law, it is that a company is responsible for criminality carried out by employees in the course of their duties. They can mitigate that by showing they have done reasonable due diligence. This company has process to make sure they minimised risks to their customers - they issue is they did not carry out those processes - so the case for negligence is clear.
Seb Member	Thu Sep 22 02:45:05 Let's say an employee just snaps out of the blue and kills a customer. I'm pretty sure the company can mitigate most of its liability. Anyway, it's wild that shareholders have limited liability, but folks want to make the corporate vehicles not liable also.
Seb Member	Thu Sep 22 02:46:16 *can mitigate most of its liability but showing there's nothing reasonable they could have done to forsee this and therefore no negligence
Habebe Member	Thu Sep 22 02:59:42 I mean, I could see a reckless argument.It seems a stretch to think he would jump from oetty their to murderer.I do see your point of an incident arising that could lead to that. I just don't see it. But that is the job of the jury. To me the company did a far greater crime in the fraud.Which was clearly intentional, not just reckless.
Seb Member	Thu Sep 22 03:52:13 Habebe: Yeah, to be fair £3275m seems a lot of compensation - so I am assuming it wasn't one hiring manager skipping the due diligence but a more deliberate thing. But for me the bigger issue is the fraud to evade accountability - the system is already so stacked in favour of companies and their beneficiaries you need to come down hard on evading accountability.
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