The U.S. Court of Appeals for the Fourth Circuit on Tuesday delivered a knockout blow to Vivint, rejecting its appeal and upholding a massive $189.7 million jury verdict in favor of CPI Security Systems Inc., a regional rival in North Carolina. The ruling concluded a high-stakes legal saga that accused Vivint of spreading lies and luring customers through deceptive door-to-door sales tactics—a maneuver that the jury found tantamount to trademark infringement and unfair competition.

Appeal Crumbles Under Judicial Scrutiny

In a searing opinion, U.S. Circuit Judge Paul V. Niemeyer, writing for the unanimous three-judge panel, said Vivint had already enjoyed a fair trial and would not get another shot.

"Vivint had its day in court," Judge Niemeyer wrote. "The district court performed well within its discretion... and the jury spoke clearly."

Vivint had contested the findings, arguing that CPI failed to prove its case under North Carolina’s Unfair and Deceptive Trade Practices Act (UDTPA) and that the $140 million punitive damages award exceeded legal limits. The panel was unmoved.

CPI’s Case: A Campaign of Deception

The origins of the case trace back to 2020, when CPI accused Vivint of misleading its customers into believing Vivint was affiliated with CPI, and then coercing them into hard-to-cancel contracts. The alleged misconduct particularly affected senior citizens, a key CPI demographic.

In February 2023, after a two-week federal trial in Charlotte, a jury returned a blockbuster verdict, finding Vivint liable for:

• Trademark infringement under the Lanham Act

• Unfair competition

• Tortious interference

• Violations of the UDTPA

The jury awarded $49.7 million in compensatory damages and an additional $140 million in punitive damages, later increased by $8.6 million in prejudgment interest by U.S. District Judge Max O. Cogburn Jr.

Vivint’s Defense Falls Flat

Vivint argued that CPI needed to show it personally relied on Vivint’s misrepresentations—an effort to reframe the case as fraud. But the panel shot that down.

"Unfair competition claims... do not require the plaintiff’s reliance on the defendant’s lies," Niemeyer stated. “Rather, the plaintiff need only show that the unfair competition proximately caused its injuries.”

Vivint also insisted the jury awarded overlapping damages and sought to reduce the verdict to a mere $274,000. But the court emphasized that the jury was explicitly instructed not to duplicate damages, and even clarified its verdict form mid-deliberation.

Regarding the state’s punitive damages cap, Vivint tried to exclude certain compensatory categories from the cap calculation. The panel again disagreed, ruling that North Carolina law mandates a straightforward ratio—three times the full compensatory amount, regardless of the claim type.

Vivint’s final plea to split the trial into separate liability and punitive damages phases also fell flat.

“Vivint has failed to identify any erroneous evidentiary ruling that requires a new trial,” Niemeyer added.

Reactions from Both Camps

Vivint issued a diplomatic response:

“While we acknowledge the Court’s ruling, it’s important to note that many of the allegations occurred over a decade ago under prior ownership. Today, we are focused on serving more than two million customers across the US, enabling them to live in smarter, safer homes.”

But CPI celebrated the decision as vindication.

“Chalk one up for the good guys,” said CPI CEO Ken Gill. “This was for our customers and for the public—especially seniors targeted by deceptive practices. Let this serve as a warning to others.”

Charles Eblen, CPI’s attorney at Shook Hardy & Bacon LLP, added:

“Years of intentional misconduct come with economic consequences. Vivint had a fair trial and should accept the jury’s message.”

The appellate panel included Judges Paul V. Niemeyer, DeAndrea Gist Benjamin, and Nicole G. Berner.

CPI was represented by attorneys from Shook Hardy & Bacon LLP and Sullivan & Cromwell LLP.