Tozer Reports - McDonald's Coffee Case

THE McTRUTH ABOUT THE INFAMOUS MCDONALD’S COFFEE BURN CASE

The purpose of this Report is to remind you that the media and press spin and distort many of their legal stories. Therefore, you need to be careful before you bash the jurors or reach any final conclusions about a case or the legal system.

THE MCDONALD'S COFFEE CASE

This is the case known to just about every American adult. It’s a thing of urban legend. According to the media’s take on the case, a lady bought coffee at McDonalds. Then she spilled coffee in her lap while driving her car. She then turned around and sued McDonald’s. Then the gullible jury awarded her millions of dollars in compensation. This case has been called the poster child of excessive and frivolous lawsuits. Jury lotto.

This case has stood to symbolize an out-of-control tort system, driven by greedy lawyers claiming the victimization of their clients.

Was this case a travesty of justice caused by an out-of-control jury? Or is there another sinister side of the story that the media selectively failed to report?

FACTS OF THE INCIDENT:

On February 27, 1992, Stella Liebeck, an active 79-year-old woman, ordered a cup of coffee from the drive-thru of a McDonald's restaurant. Ms. Liebeck was in the passenger's seat of her Ford Probe. Her grandson, Chris, stopped the car so that Stella could add cream and sugar to her coffee. While the car was stopped, she placed the Styrofoam coffee cup between her knees. Then Stella pulled the far side of the plastic lid toward her to remove it. In the process, entire cup of coffee spilled on her lap.

Liebeck was wearing cotton sweatpants. The sweat pants Stella was wearing absorbed the spilled coffee. The sweat pants held the scalding liquid next to her skin. The scalding coffee caused third-degree burns to her inner thighs, perineum, buttocks, as well as her genital and groin areas.

Stella was taken to the emergency room of the hospital. She suffered full thickness (third-degree) burns over six percent of her body. She suffered lesser burns over sixteen percent of her body. Stella stayed in the hospital for eight days. She underwent painful skin grafting surgeries. Two years of treatment followed.

“Okay, that’s horrible, but was it McDonald’s fault?”

ATTEMPTS TO SETTLE

Liebeck’s daughter wrote a letter to McDonald's asking them to reduce the temperature of their coffee and to pay $20,000 to cover her $11,000 in medical costs and her daughter’s loss of earnings (The daughter apparently stayed home from work to take care of her mother). McDonald’s offered $800.

When McDonald's refused to raise its offer, Stella Liebeck (who had never sued anybody before) obtained an attorney.

McDonald's refused the Stella offer (through her attorney) to settle for $90,000.

LAWSUIT

The attorney filed suit. The lawsuit alleged "gross negligence" for selling coffee that was unreasonably dangerous. I imagine some raised eyebrows at this point. But keep reading.

Shortly before trial, Stella’s attorney reportedly offered to settle for $300,000, and a mediator suggested $225,000; McDonald's refused claiming that the coffee burn danger was “open and obvious.” Why did the attorney raise the offer to $300,000?

EVIDENCE

Stella Liebeck's attorneys discovered that McDonald's required its franchises to serve coffee at 180-190 degrees Fahrenheit. At that temperature, the coffee would cause a third-degree burn in two to seven seconds. Had Stella Lieback’s coffee been 155 degrees, the liquid would have cooled and given her time to avoid serious harm.

Remember, the coffee you serve at home is, as I understand it, normally about 135-140 degrees. (Note: A good quality home coffee maker can today can produce coffee at 190 degree mark or hotter).

Evidence was presented that a number of other food establishments served coffee at a substantially lower temperature than McDonald's did.

That begs the question: Why did McDonalds makes it coffee so hot? McDonald’s suggested several reasons: (1) For optimum taste; (2) Those who bought the coffee typically waited to drink it until they arrive at work or home; by that time, the coffee cools. (However, the company’s own research showed that customers intend to consume the coffee immediately while driving).

McDonald's coffee cup contained the statement "Coffee is hot and can burn you" on the cup (but it was argued by the Plaintiff that the warning was too small to be a sufficient warning).

Now the culpable part: Other documents obtained from McDonald's showed that from 1982 to 1992, the company had received more than 700 reports of people burnt by McDonald's coffee (some as severe as Stella’s, but the majority were not as severe), and had settled claims arising from scalding injuries for more than $500,000. Despite all of these cases of burn injuries, McDonalds did not change its temperature policy. Further, McDonald’s testified, during Stella’s case, that they had no intention of reducing the temperature of their coffee in the future.

McDonalds reportedly responded that only 1 in 24 million people were burned by its coffee. McDonald's quality control manager testified that 700 plus injuries was insufficient to cause the company to evaluate its coffee temperature practices.

As I understand it, McDonalds did not react to published warnings issued that the fast food industry was causing serious scald burns by serving coffee hotter than 140 degrees. As the temperature is increased, the burn rate increases exponentially.

But why did McDonalds serve their coffee so hot? Apparently, evidence was prodcued that, although McDonalds knew people were being burned by its coffee, it, nevertheless, served the coffee hot to save money. McDonald's saved money because internal studies showed that people drank their coffee as soon as it was purchased. Thus, customers eating in the store would not tend to ask for a free refill when coffee was so hot. Finally, it has been reported that McDonalds executives testified that they believed that it would be cheaper to pay injury claims and worker's compensation benefits to people burned by their coffee rather than making any of these changes.

VERDICT AND SETTLEMENT

Applying the principles of comparative negligence, the jury found that McDonald's was 80% responsible for the incident. Stella Liebeck was 20% at fault.

The jury then awarded Liebeck $200,000 in compensatory damages, which was then reduced by 20% to $160,000. Thus, she received $160,000 for her injuries.

But there was the issue of punitive damages. Punitive (exemplary) damages serve to make a person or entity an example for others. The purpose of is to cause the guilty party and others to change their conduct in the future. When McDonalds said it was not going to change its coffee practices, the jury decided to award punitive damages. It worked. McDonalds reportedly lowered its coffee temperatures.

The Jury awarded her $2.7 million in punitive damages. The jurors apparently arrived at this figure from Stella’s attorney's suggestion to penalize McDonald's for one or two days worth of coffee revenues, which were about $1,350,000 per day.

However, the judge reduced punitive damages to $480,000.

Thus the total verdict was $160,000 (compensatory) + $480,000 (punitive) = $640,000.

The decision was appealed by both McDonald's and Liebeck in December 1994. But the parties settled out of court for an undisclosed amount (allegedly less than $600,000).

SUMMARY

In summary, McDonalds served scalding hot coffee that they knew was causing great harm to many customers. Why? For greater coffee sales. McDonalds argued that the danger was open and obvious. The jury awarded Stella $160,000 to compensate her for her injuries. They also awarded punitive damages which the judge reduced to $480,000 to deter future conduct. After the case, McDonalds did apparently reduce the temperature of its coffee.

The Judge in the case described McDonald's conduct as reckless, callous and willful.

Remember, the jury decision was influenced by many factors: (1) their collective knowledge and experience; (2) The persuasiveness of the attorneys; (3) Their perceptions of the witnesses credibility and demeanor; and (4) The evidence they were presented with.

Now, having heard a more complete version of this legendary story, do you think that the jury was correct? Based on the facts contained in this article, what verdict do you believe would be just and right? What are your thoughts? EMAIL

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