Monday, January 9, 2012

Law in the News: McDonald's Hot Coffee Case

The Law in the News is an ongoing series where the lawyers of The Law Office of Keith R. Taylor offer their perspective on the legal cases and topics that are making headlines.

We are quickly approaching 20 years since a woman by the name of Stella Liebeck spilled a cup of McDonald’s coffee that spawned a flood of bad press for the legal profession and the justice system. The $2.9 million verdict has made this case the poster child for a legal system gone wrong. Unfortunately those who have so successfully engrained this case in the minds of millions of Americans have a bad habit of leaving out some important details – details that might cause you to reconsider your opinion of the verdict.

While descriptions of the facts of this case often sounds something like, “a lady took the lid off her coffee, stuck it in her lap, it spilled, she got millions,” that tends to leave out some important parts that you may or may not know. What is often not shared is that McDonald’s knew that their coffee was dangerously hot (McDonald’s required franchises to serve it between 180 and 190°). They had been sued for very similar claims to this one before. They kept the coffee too hot because they thought it looked better (because of all the appetizing steam it created). We also don’t hear much about the very severe injuries that Ms. Liebeck had as a result of the spill. She sustained third degree burns to her legs and pelvis after seconds of exposure to the accidental spill (liquid at that temperature causes third degree burns in 2-7 seconds). Her injuries caused her to have skin grafts and spend eight days in the hospital undergoing emergency treatment. During her hospital stay she lost an extreme amount of weight, reducing her to only 83 pounds. After her skin grafts and discharge from emergency care she still had to undergo another two years of medical treatment for her injuries.

Another detail that is often left out is that Ms. Liebeck tried to settle with McDonald’s for $20,000.00, less than one percent of the jury verdict, to cover the costs of her medical treatments. McDonald’s offered her $800.00. When she tried to settle with the company two more times before trial, they refused. We also don’t hear about the parties actually reaching a confidential settlement after the fact (which means Ms. Liebeck did not get $2.9 million out of this, or even a quarter of that amount). Another thing to remember is that the bulk of the jury verdict in this case was punitive damages. Punitive damages are designed to punish someone for something they did wrong with the idea that it will deter future wrongdoing. The idea behind the high punitive damages in this case was that an amount less than $2.7 million (the approximate amount of the jury verdict that was punitive in nature) would not punish McDonald’s because that amount would be covered by about one or two day’s worth of McDonalds’ profits from coffee sales alone.

From a line in a Toby Keith song to a film, “Hot Coffee,” which was featured at the 2011 Sundance Film Festival, it seems we are all still fascinated with this little cup of coffee. Hopefully, with a different perspective on the case, we can make a more balanced judgment about the outcome of the case and the reasonableness of the verdict, and recognize how the actions of those in the legal profession can often be misrepresented by the media and the public.