The code change was requested by an employee and it wouldn't have caused any damage. Feature, not a bug. Imagine trying to explain this to someone who doesn't know what "code" is. It's just people making up a story to blame you. The point is that you can be blamed for anything you do and become involved in a frivolous lawsuit.

Usually in the US you can only be sued for actual, provable economic damages that are suffered as a result of your actions. It sounds like there may have been more to the story here.

They claimed to be damaged all throughout the complaint, yet didn't provide any evidence. Imagine explaining this to someone non-technical like your grandmother. You can make up a story and that non-technical person is going to have no idea if you are telling the truth or not.