CPI Security wins $190 million verdict after rival unfairly tried to poach customers
Editor’s note: This story was updated on Feb. 21 to reflect comments CPI’s CEO made after the verdict was announced.
A federal jury on Friday awarded CPI Security Systems almost $190 million, finding that a competitor of the Charlotte company had used a rash of deceptive and improper sales practices to steal its customers.
At the end of the eight-day trial, the jury unanimously found that Vivint Smart Home Inc. of Provo, Utah, targeted CPI customers then used misleading statements — from saying it represented CPI or was buying out the Charlotte company — to poach its business.
In an unusual statement following his company’s courtroom victory, CPI CEO and founder Ken Gill relished the win but escalated the attacks on his rival.
“While we’re thrilled the trial ended in our favor, I want to be clear that this case is not just about CPI’s business,” Gill said in statement posted on the company’s website.
Citing additional concerns over the years about Vivint, Gill said, “I hope today’s verdict will stop their deception for good.”
Vivint says it will appeal.
“We are extremely disappointed with the jury’s decision, which we believe is not legally or factually supported,” the company said in a statement after the verdict. “Furthermore, the amount of damages awarded are egregious and completely disconnected from the total economic impact of any activity that CPI claims to have occurred ... “
“We remain committed to operating with the highest standards of integrity and delivering exceptional service to customers.”
The lawsuit, which was filed in September 2020, took more than two years to reach a jury.
The eight jurors began deliberating on Thursday and delivered their verdict to U.S. District Judge Frank Whitney on Friday.
The jury’s verdict sheet took an almost monotonous appearance as the foreman checked the yes box on seven violations. Meanwhile, the numbers piled up:
▪ $140 million for punitive damages.
▪ $29.3 million for violations of the North Carolina Unfair and Deceptive Trade Practices Act.
▪ $13.5 million for unfair competition
▪ $5.4 million for trademark violations.
▪ $1.5 million for interfering with the contracts of seven identified CPI customers.
Other actions against Vivint
Vivint has had a checkered history with government regulators and rivals.
In May 2021, it agreed to pay $20 million to settle a federal investigation into the company’s alleged violations of the Fair Credit Reporting Act.
In January 2021, the Department of Justice fined Vivint $3.2 million for making false statements to secure financing for customers’ purchase of Vivint products.
In 2018, Vivint agreed to pay $10 million to rival ADT to settle claims highly similar to what CPI would file two years later.
About CPI Security
Gill founded CPI Security in 1991 with 10 employees, according to the company. He started with 300 customers.
The company has grown to become one of the 10 largest U.S. security firms, with more than 750 employees.
CPI Security drew criticism in 2020 for Gill’s remarks about street protests over the death of George Floyd.
“Please spend your time in a more productive way,” Gill told Jorge Millares, leader of the Queen City Unity organization, in an email at the time. “A better use of time, would be to focus on the black on black crime and senseless killing of our young men by other young men.”
The remarks prompted the Carolina Panthers, Charlotte Hornets and Charlotte Knights to temporarily sever ties with the company.
At a news conference after the Vivint verdict was announced, Gill said his 2020 comments were not about Floyd’s death or Black Lives Matter. But he said Vivint tried to use his comments to steal CPI customers.
Staff Writer Joe Marusak contributed to this story.
This story was originally published February 17, 2023 at 3:44 PM.
