For years now, we have heard our clients make references to the “McDonald’s” lawsuit. Comments like “a woman spills coffee and gets a million dollars, but I’m really hurt and what do I get?” are commonplace in our profession. The McDonald’s hot coffee case has been the poster child for the tort reform movement. Corporate America and the insurance industry have generously interpreted the facts in their favor, to try and convince our society that we are lawsuit happy and the jury system is “broken”. But is it really, or is this just a smokescreen perpetrated by big business and the insurance industry? Why would they do that? What really happened in the McDonald’s case? Do you really know this case as well as you think? The truth may surprise you.
In 1992, 79 year old Stella Liebeck ordered a cup of coffee from a McDonald’s drive-thru. Contrary to popular belief, she was not driving at the time – she was a passenger in her grandson’s car. Because the vehicle did not have cup-holders or a flat dashboard, her grandson parked the car so she could add her cream and sugar. Stella balanced the coffee cup between her knees and removed the lid. As she did so, the cup tilted backwards and the coffee spilled into her lap, scalding her groin, thighs, and buttocks. She suffered third degree burns over six percent (6%) of her skin, and lesser burns over sixteen percent (16%). She spent over a week in the hospital receiving treatment for her injuries and had to undergo extremely painful skin grafting. She lost 20 pounds (almost 20% of her body weight) and her family feared she would not survive. Stella required medical treatment for her injuries for the next two years.
Stella incurred more than $20,000 in medical bills. McDonald’s best offer: $800
Believing this was not fair, Stella’s attorneys filed a lawsuit for her, and their investigation began. They found many interesting facts:
- This was not an ordinary cup of hot coffee. McDonald’s served its coffee at 180-190 degrees – a temperature at which a third degree burn can be sustained in only 2 seconds.
- McDonald’s KNEW that severe burns could result from serving their coffee at temperatures higher than 130 degrees – yet they still brewed at a temperature 50-60 degrees higher than this, without any cautionary warning to their customers.
- McDonald’s own quality control manager admitted that their coffee would burn customers’ mouths and throats if it was consumed immediately when served, but again, they provided no warnings to their customers.
- Worse yet, McDonald’s knew many previous customers had been burned and scalded by their coffee. McDonald’s had received more than 700 complaints of burning/scalding incidents in the 10 years before Stella’s incident.
- Stella’s attorneys discovered that McDonald’s had paid more than $500,000 to settle these claims. (That is called “notice of a dangerous condition”.)
- Yet, McDonald’s did NOTHING to change its practices, NOTHING to warn its customers and NOTHING to otherwise protect its customers.
Eventually, Stella’s case ended up in the hands of a jury, who found her 20% at fault for spilling the coffee, and McDonald’s 80% at fault for serving it at a temperature they knew could cause third degree burns within seconds, but failing to do anything to warn its customers - despite having knowledge of many prior similar incidents.
The jury awarded Stella $160,000 for her injuries and damages. The jury was appalled at the reckless indifference of McDonald’s, and awarded punitive damages – damages which are intended to force reform and to penalize a defendant for its actions. The evidence showed that McDonald’s earned at that time $1.35 million a day in coffee sales alone. The jury penalized McDonald’s, and awarded plaintiff TWO days of coffee sales, or $2.7 million dollars. The trial judge later reduced the punitive damages award to $480,000, although he agreed that it was “appropriate to punish and deter” McDonald’s for their coffee policy. The jury’s verdict was appealed, and the case eventually settled out of court for an undisclosed sum less than $600,000.
Do you still think this was just a case about a woman spilling coffee on herself and “getting rich”? Stella Liebeck would gladly have turned back the hands of time and avoided this incident completely, in exchange for any sum of money. We find this same mindset in most everyone who sustains a personal injury as a result of misconduct of another. No amount of money is worth the injury.
However, instead of changing their business practices to protect the public, corporations in our country have decided to go on the attack. They blame people like Stella, and the attorneys who help victims in almost any accident. This is called “blaming the victim”, and is a popular insurance defense strategy. Their goals are to deny or limit a person’s ability to bring a claim for injuries, regardless of the circumstance. You never heard the real story of Stella Liebeck – instead you heard about “lawsuit lotteries”, “jackpot juries”. You heard a complete mischaracterization of the facts. What followed was corporate America’s need for “tort reform” and “damages caps”. You have been told that limiting people’s ability to bring claims and collect damages would somehow lower the cost of doing business and save you money.
In many states, legislators and voters have voted to limit a person’s right to compensation - even when injured by the wrongful acts of another. This is the essence of “tort reform”. The promise has been that everyone’s insurance rates will go down with a limitation on damages for personal injury claims. How has that worked out? In every one of those states, insurance premiums have not gone down one bit. In some states, rates continue to rise. By being able to place arbitrary limits on their own liability exposure, corporations and insurance companies have gotten richer and their profits have increased exponentially.
It gets worse than this too. Injured parties who are unable to seek redress from the responsible parties must turn to the state governments for medical and disability coverage. In essence, “tort reform” shifts responsibility from the businesses that cause injuries, to the taxpayers of this country. The recent documentary “Hot Coffee”, which aired on HBO in June, 2011, attempted to shed light on the truth about tort reform, and what its real effect on America has been.
Stella Liebeck was no different from any of our clients. She did not set out to win hundreds of thousands of dollars. She only wanted her medical bills and her daughter’s lost wages paid. However, corporate greed got in the way, and ultimately, through the hard work of Stella and her counsel, justice was done.
These are the same wishes we hear from each and every one of our clients on a daily basis – people who only want what is fair, namely, payment of their medical bills and other losses. They are not trying to “get rich.” Indeed, far from it.
The tort reform movement, more accurately known as “tort deform”, is designed only to absolve big businesses and insurance companies from responsibility for their actions and the actions of their insureds. It is bad for the injured, innocent victims, and it is bad for America.