A newspaper report, days after the verdict totaling $2.9 million was awarded to Stella Liebeck was announced to the public media. Photo Credit: nytimes.com
In August of 1994, one of the most famous cases in corporate law history began. This was the case of Stella Liebeck v. McDonald’s Restaurants, or as many speak of now, the “hot coffee case” where a 79-year-old woman got rewarded a punitive verdict of $2.7 million for spilling a cup of coffee on her lap while driving through a Mcdonalds Drive through. However, the main question of the case still remains, did Stella Liebeck spill the coffee for compensation? or was McDonalds at fault?
Stella Liebeck, a 79-year-old woman living in Albuquerque, New Mexico was going through the McDonalds drive-through at 5001 Gibson Boulevard Southeast. She was sitting in a 1989 Ford Probe, with no cup holder, with her grandson driving the vehicle. After receiving the coffee, her grandson stopped the car to let her add sugar. While adding sugar, Liebeck placed the cup of the hot coffee cup between her knees where the entire cup spilled on her, burning the lower portion of her body. Liebeck was then rushed to the hospital where it was declared that she had an overall 16% of burns on her body, with 6% being serious third-degree burns.
Stella Liebeck was hospitalized for 8 days, in the course of those days, she lost 20 pounds making her now 83 pounds from 103 pounds. After being released from the hospital, she needed her daughters to care for her for three weeks and became partially disabled for two years.
Liebeck had reached out to McDonald’s for a $20,000 settlement to cover her past medical bills totaling $10,000, her future medical care, as well as compensation for her daughter's loss of salary for leaving work to take care of her mother. McDonald’s responded to Liebeck's letter with a mockingly low settlement of $800 to cover damages. After Mcdonald’s response to Stella Liebeck, she hired Albuquerque attorney Ken Wagner. Wagner filed for gross negligence and asked for multiple settlements with a final $300,000 settlement before going to trial as Mcdonalds would not settle.
The trial took place from August 8th to 17th in 1994 in front of before Judge Robert H. Scott, much evidence was presented, such as the temperature of the McDonald's coffee, the temperature of its competitors coffee such as Starbucks and expert testimonies about how the burns from the coffee affected the body and the skin. The evidence against McDonald's was very evident as documents had uncovered that between the year 1982-1983 there had been over 700 settlements totaling in at over $500,000 for individuals burning themselves with McDonald's 82–88 °C coffee which was also testified to cause third-degree burns within the short span of 15 seconds. However, McDonald's presentably weak argument from attorney Tracey Jenks stated that any food no matter what, if served over 54 °C, would cause a severe burn and that “restaurants had more pressing dangers to worry about and that the number of coffee spills is only 1 in 24 million cups of coffee making the settlements statistically insignificant”.
As the trial continued, Jenks produced more significant evidence which helped Mcdonald's case, it was found that there was underlying reasoning as to why the coffee was brewed at that temperature. This was because of the industrial standards, it was so that the maximum flavor could be extracted as well as it met the industrial maximum holding temperature as well. Tracey Jenks continued to state that Ms.Liebeck did have a lot to blame as she was the one who chose to place the cup where it was and the one who spilled it on herself. Additionally, temperatures of Mcdonald's coffee is no hotter than many other popular coffee establishments such as Starbucks coffee which also went to trial in a similar case in 2014, losing only $100,000 in damages which raises another concern mentioned later in the article the concern of compensation culture.
“After 7 days of testimony and 4 hours of deliberation, the Jury reached a verdict on August 18th”. In terms of corporate negligence, the Jury ruled that it was 80% the fault of McDonald's and 20% the fault of Stella Liebeck. Ms. Liebeck was rewarded with $200,000 in compensatory damages which after her 20% negligence was reduced to $160,000. In addition, to many individuals' surprise, Ms. Liebeck was also awarded $2.7 million in punitive damages as well. According to the jury, the $2.7 million was to send a message to Mcdonalds to lower the temperature of their coffee. The amount was decided upon the cost of 2 days worth of Mcdonald's coffee revenue which totaled to be $2.7 million, winning Liebeck a total of $2.9 million in this trial.
As this case happened around 2 decades ago, many lawyers to this day, go over the case and wonder what the true facts of the case are. This is because as the numbers of media reports got larger, the amount of explanation minimized. No one cared about the trial or the evidence, everyone focused on the total $2.9 million that Stella Liebeck received. Days later, Liebeck was painted as the villain receiving hate mail and people showing up at her doorstep saying how she deserved none of the compensation.
Many critics argue that cases like Stella Leibecks are the poster child for frivolous lawsuits just to make an extra buck, which in most cases many would agree with but that is a discussion for the way that the legal system is built. With cases like Leibecks receiving extreme amounts of compensation fees, it makes others question why they can't spill coffee on themselves and be rewarded with cash awards as well. This creates a “compensation culture” which Financial Times states was started by Liebeck and her $2.9 Million in damages. As this is already becoming extremely prevalent in American torts and product liability suits against the countries biggest companies, the main question at hand is how does the legal system reorganize to solve this problem? or, do they not change and hope that people will learn and the system will evolve itself?
Corporate Negligence: a tort rule for allocating damages when both parties are at least somewhat at fault. In a situation where both the plaintiff and the defendant were negligent, the jury allocates fault, usually as a percentage. Then each pays their share of the other's damages”
Compensation Culture: The term states that out of all the torts filled in a specific country, many are due to frivolous lawsuits by individuals looking for a quick payday
Gross Negligence: A conscious and voluntary disregard of the need to use reasonable care, which is likely to cause foreseeable grave injury or harm to persons, property, or both.