Shook Obtains $10 Million Settlement for ADT in Deceptive Trade Practices Case

Two days into trial against its largest competitor, ADT has accepted $10 million from Utah-based Vivint Inc. to settle unfair and deceptive trade practices claims. 

ADT filed suit against Vivint after hundreds of consumers around the country complained that Vivint sales agents had visited their homes in unannounced door-to-door visits. ADT alleged that the agents misled existing ADT customers—many of whom were elderly or disabled—into believing that Vivint represented or was affiliated with ADT and that Vivint was merely “upgrading” the customers’ equipment. In reality, Vivint was converting the customers away from ADT. 

ADT is North America’s leading provider of home security services and maintains a significant presence in the Denver area. Numerous complaints were received from Colorado residents, where Vivint has increasingly deployed sales teams to generate new accounts. 

A Colorado Springs resident testified that a Vivint sales representative told her Vivint was a third-party subcontractor for ADT. When she received bills from both Vivint and ADT in the months after the Vivint “upgrade,” she became leery of the encounter. She then learned that there was no affiliation between the two companies, but Vivint initially refused to allow her to break her contract. She was several months pregnant and her husband was deployed at the time.

Denver attorneys at Shook, Hardy & Bacon L.L.P. represented ADT. Shook attorney Chip Sander noted the logistical difficulties in proving what at first glance seems to be an easy case of wrongful conduct. Evidentiary rules required ADT to obtain the testimony of deceived customers from throughout the country using video teleconferencing technology. Various experts testified in support of ADT’s claimed damages.

“Proving the scope of the conduct is particularly tough,” Sander stated. “The Court was not going to allow ADT to call 900 witnesses who were victims of this conduct, and then you also have the problem of proving all the people this happened to that never took the time to complain.”

“ADT just wanted Vivint to stop misleading customers and to stop using ADT’s name in the process,” said Shook’s Charlie Eblen.

Vivint got the message by the second day of trial, agreeing to pay ADT a total of $10 million—five times the amount of Vivint’s last pre-trial offer. 
The latest settlement closes out a wave of cases filed by ADT against competitors engaging in similar conduct. In total, ADT obtained nearly $17 million in recoveries in 2017.

The case is ADT LLC v Vivint, Inc. No. 17-80432 (S.D. Fla., settled December 11, 2017).