The Real Story of the "MacDonald's Coffee Case" and Tort Reform

In my blog earlier this week, I referred to the now well-known but misunderstood verdict against MacDonald's several years ago as a result of which a woman received compensation for burns suffered when she spilled hot coffee in her lap. In urban legend, fostered by both lazy journalism and insurance company propaganda, the result has become synonymous with "frivolous" lawsuits and "runaway" juries. It has come to symbolize how the tort compensation system is somehow broken.

First, I will not try to reinvent the wheel. Rather I will refer you to a comprehensive discussion of the case's factual and procedural history that has been published at a website dedicated to research on personal injury-related topics: http://www.hurt911.org/mcdonalds.html.

Having given attribution, I now feel free to quote extensively from this article as follows:

"Stella Liebeck, of Albuquerque, New Mexico, was a passenger in a car when she was severely burned by McDonald's coffee in February 1992. Liebeck, 79 at the time, ordered coffee that was served in a styrofoam cup at the drive through window of a McDonald's. After receiving the order, the driver pulled his car forward and stopped so that Liebeck could add cream and sugar to her coffee. . . . . THE CAR WAS STOPPED when Liebeck placed the cup between her knees and attempted to remove the plastic lid from the cup. As she removed the lid, the entire contents of the cup spilled into her lap."

"The sweatpants Liebeck was wearing absorbed the coffee and held it next to her skin. A vascular surgeon determined that Liebeck suffered full thickness burns (third-degree burns) over 6 percent of her body, including her inner thighs, perineum, buttocks, genital and groin areas. She was hospitalized for eight days, during which time she underwent skin grafting. McDonalds refused to pay the 79-year-old woman's initial medical expenses totaling $11,000. McDonalds actually countered with an offer of $800. And they also refused to turn down the heat on their coffee. Left with $20,000 unpaid bills, Stella Liebeck, a Republican who had never filed a law suit in her life, finally hired a lawyer. Liebeck sought to settle her claim for only $20,000, but McDonald's refused. A mediator later recommended the parties settle for $225,000. Again, McDonald's refused and the case went to trial."

"McDonald's representatives lied to the court and jury about the existence of other claims, but documents showing that they knew of more than 700 claims by people burned by its coffee between 1982 and 1992 were admitted in to evidence. Some claims involved third-degree burns substantially similar to Liebecks. This history documented McDonald's knowledge about the extent and nature of the intentionally created hazard. McDonald's even ignored a request from the Shriner's Burn Institute in Cincinnati to turn down the temperature of its coffee. McDonald's also said that based on a consultants advice, it held its coffee at between 180 and 190 degrees fahrenheit to maintain optimum taste. He admitted that he had not evaluated the safety ramifications at this temperature. Other establishments sell coffee at substantially lower temperatures, and coffee served at home is generally 135 to 140 degrees."

A chart introduced at trial showed that when skin is touched by liquid at 124 degrees it takes 3 minutes to cause a severe burn. When the temperature of the liquid is 156 degrees it takes one second. The speed at which the burn is caused continues to increase exponentially such that when Ms. Liebeck was scalded by coffee at about 180 degrees her full-thickness burns were instantaneous. Additionally, at lower temperatures, the potential victim has a chance to mitigate or avoid injury due to both time and the cooling of the liquid. In Ms. Leibeck's case the coffee was no different than napalm.

"McDonald's quality assurance manager testified that the company actively enforced a requirement that coffee be held in the pot at 185 degrees, plus or minus five degrees. He also testified that a burn hazard exists with any food substance served at 140 degrees or above, and that McDonald's coffee, at the temperature at which it was poured into styrofoam cups, was not fit for consumption because it would burn the mouth and throat. The quality assurance manager admitted that burns would occur, but testified that McDonald's had no intention of reducing the "holding temperature" of its coffee. McDonald's also claimed that customers buy coffee on their way to work or home, intending to consume it there, however, the company’s own research showed that customers intend to consume the coffee immediately while driving. McDonald's also argued that consumers known coffee is hot and that its customers want it that way. The company admitted its customers were unaware that they could suffer third degree burns from the coffee and that a statement on the side of the cup was not a "warning" but a "reminder" since the location of the writing would not warn customers of the hazard."

The jury awarded Liebeck $200,000 in compensatory damages. The jury reduced this amount to $160,000 because they found Liebeck 20 percent at fault for spilling the coffee (not because she was driving a car). The jury also awarded Liebeck $2.7 million in punitive damages, which equals about two days of McDonald's coffee sales.
After the trial and verdict, it was found that the temperature of coffee at the local Albuquerque McDonald's had dropped to a relatively safe 158 degrees Fahrenheit."

In fact, the trial judge, on motion of the defendant, reduced the punitive damages award to $480,000 under a procedure known as remititur. Thereafter, the parties entered into a settlement agreement, the terms of which were confidential.

Several points are illustrated by this case. First, this was NOT a frivolous case. Why is it that insurance companies want to portray cases where a trial has occurred, a verdict has been rendered and the defendant has been found by an impartial jury of the parties' peers to be negligent? Frivolous lawsuits are those that never should be brought, that are without factual or legal merit.

Second, this case illustrates perfectly that the tort system does work. The system has checks and balances and while, as in any system, there are aberrations, this was not one. Further, do not forget the scores of other cases, that would never attract attention, where a person with a legitimate claim is turned away by a callous, cynical jury as just another plaintiff with his hand out.

Finally, taking this illustration, let us consider it in the context of my proposal for tort reform. Knowing these facts, I am absolutely confident that the plaintiff would have had little difficulty in finding counsel willing to post a bond for costs in this case. In fact, under my proposal, after Macdonald's lost the case and the parties began post-trial settlement discussions, the plaintiff and her attorney would be entitled to additional compensation for their costs and fees as part of the settlement discussions.

Again I say, tort reform is NOT what is being dangled by the White House in its farcical demonstration of false bipartisanship. Tort reform, particularly medical malpractice reform has been a spectacular failure in states such as Massachusetts. Massachusetts has had a so-called "tribunal" screening system for almost thirty years. Instead of helping, it only burdened the courts further by grafting another proceeding into the trial process that requires the time of a judge, lawyer and doctor as well as court personal.

My proposal will have the exact opposite effect. It will immediately and drastically reduce the number of cases filed in the system. It will assure that those using the system are responsible for the costs and fees they generate. As with any radical proposal, it will require vetting and analysis; but at its core it is simple, effective and fair.

I could be wrong; I have been before

Tell me what you think.

What is Tort Reform???

For 23 years I was a "tort lawyer". When I started law school, I honestly did not know what a "tort" was. I thought it was a French pastry; rather than what I immediately learned was "a civil wrong." But what really is a "tort lawyer" and what really is "tort reform"???

The non-judgmental definition of a "tort lawyer" is: a trial attorney who practices in the civil court system and specializes in civil cases where one party seeks compensation for an injury suffered as a result of an act. Therefore, any lawyer who works within that framework is a tort lawyer. What is more clear to me today than ever before is that the tort law system is nothing but politics in a courtroom with the pretext of impartiality, reasoned judgment and fair results.

I was truly a trial lawyer first: for me which side I was on did not matter. Give me a side and let me go. I defended doctors -- good ones and bad ones-; I represented plaintiffs -- all kinds and colors. I sued doctors; I defended Wal-Mart and Sears. I understood my job to be advocacy and confrontation: cross-examination is the greatest engine ever invented for the discovery of truth and, no argument, I could and still can cross-examine.

What I learned as time passed was: it really didn't matter. At the beginning of my career everyone was in the the "compensate" frame of mind. It was described as the "litigation explosion" or the "tort revolution." We had the California courts giving us the concept of "strict liability" ...(for another day). What I understand now is that it really was something completely different: it was wealth re-distribution sanctioned by a liberal judiciary, underwritten by the insurers and promulgated by the jurors themselves: what was then the voice of the people.

I could go on ad nauseum about the various examples of juries running wild on damages in the name of compensation (although none of you may cite the infamous MacDonald's case as that is NOT an example of a bad jury -- another story for another day). I could also cite the scores of cases where jaded juries scoffed at legitimately injured fellow citizens (a defense verdict in a rear-end collision??) and turned them away from the system designed to compensate them ... with nothing. What we had and now have is a completely unpredictable, unwieldy and ridiculously expensive system that does not work as intended.

In this first essay I will leave the details to further elaboration. My earlier question was: "What is tort reform"? I will tell you first what it is absolutely not. It is not a "medical court". It is not a preliminary screening process for malpractice cases. It is not any tinkering with the existing methods of resolution within the context of the existing rules and procedures.

Do you know that there has been "tort reform" for medical malpractice cases in Massachusetts since the early 1980's. Did you know there has been a preliminary screening "tribunal" system in place since that time? Did you know there have been damages caps in place for verdicts in Massachusetts since that time? Do you know where the loudest screams about the cost of insurance come from..of course: Massachusetts.

So, what is tort reform? Here is an idea that will work: If you use the system, you pay if you lose. It has worked in England and Canada for decades if not centuries; but here is my wrinkle. To answer all those who say, if you impose costs, you shut the doors of the courthouse to those who are less fortunate. No you don't. You allow the lawyer to co-sign on the obligation to pay costs.

What would happen at the outset of a case is the court will convene a costs hearing. It is in essence a "put up or shut up" proceeding. The defendant would have the same obligation: post a bond for costs or pledge assets. If the defendant is insured then this is not an issue. In the case of the plaintiff, the issue is more problematic. Now it is very safe to say that if, for example, the case involves a situation where the plaintiff in a medical malpractice case had the wrong kidney removed..any attorney would be happy to "post bond" for that case. On the other hand, a more tenuous case, involving a plastic surgery gone wrong...well maybe that would be a different issue; but if the lawyer, who stands to make anywhere from 25% to 45% of a verdict, is not willing to stand up and "post bond" then maybe that case really isn't that good a case.

What better way to filter out "frivolous" lawsuits than make the lawyer stand behind the filed claim??? Then what you really do is create a "risk-driven" market for litigation bonds. The lawyers will pool their assets and be required to stand behind what they do. This is true reform; not cosmetics. It would make the users of the system shoulder the cost of using the system as well as the risk. It would immediately relieve the state of a substantial amount of the cost and clogging associated with the personal injury system. If it is personal injury, then the cost of use should also be "personal".

Additionally, if the lawyer's bond is at risk then the negotiations at the "nut-cutting" point of litigation would be far more realistic and also control compensation --and thereby insured-- costs. When a case is in doubt, the value of "pain and suffering" --an intangible damage-- is far less rhetorical and far more practical if the lawyer, betting on an unseen, unselected jury, is also at risk.

I think I have something here. Maybe not.

I have been wrong before; I will be again.

Please tell me what you think...I welcome ideas.