McDonalds Hot Coffee Lawsuit
The Tort Reform Myth Machine
by Jon Greenbaum
Perhaps you saw the Seinfeld episode in which lawyer Jackie Chiles encourages
Kramer to sue over a cup of hot coffee. The show spoofed the reported $2.7 million
awarded to a woman who had sued McDonalds. Elaines reaction to Kramer
mirrored what most people were saying: Who ever heard of this anyway?
Suing a company because their coffee is too hot? Coffee is supposed to be hot.
Of course Kramer, replies, Yeah, but Jackie says the top was faulty.
Its a perfect morality tale exposing everything wrong with our litigious
society whose members refuse to accept personal responsibility. The McDonalds
lawsuit was ridiculous, right? Were all bearing the burden of higher insurance
rates because there is an epidemic of lawsuits, right? Malpractice lawsuits
are driving doctors out of business, right?
Well, not really.
Third Degree Burns
Heres what the talk show pundits and columnists neglected to mention about the McDonalds coffee burn case:
79 year-old Stella Liebeck suffered
third degree burns on her groin and inner thighs while trying to add sugar to
her coffee at a McDonalds drive-thru. Third degree burns are the most
serious kind of burn.
McDonalds knew it had a problem. There were at least 700 previous cases of scalding coffee incidents at McDonalds before Liebecks case.
McDonalds had settled many claims before, but refused Liebecks request for $20,000 compensation, forcing the case into court.
McDonalds heats its coffee to about 190º, 30-50 degrees hotter than other restaurants. Doctors testified that at 190º it only takes 2-7 seconds to cause a third degree burn.
McDonalds knew its coffee was exceptionally hot but testified that it had never consulted with a burn specialist. McDonalds rationale was that the coffee smells better at such scalding temperatures.
The Shriner Burn Institute had previously warned McDonalds not to serve coffee above 130 degrees.
And so the jury came back with a decision: $160,000 for compensatory damages. But because McDonalds was guilty of willful, reckless, malicious or wanton conduct, punitive damages were also applied. The jury set the award at $2.7 million. The judge then reduced the fine to less than half a million. Ms. Liebeck then settled with McDonalds for a sum reported to be much less than a half million dollars. McDonalds coffee is now served nationwide at the same temperature as most other restaurants.
The Lawsuit Crisis Myth
Mr. Bush is now pushing for tort reform, claiming that lawsuits are hurting the economy. On January 5 he demanded that Congress take immediate action to impose strict limits on medical malpractice litigation. Contrary to popular belief, since 1975 the number of lawsuits nationally has declined. Government data show that the median jury verdict for punitive damages was only $37,000 1996 significantly less than the $65,000 median award in 1992.
So, why are Newsweek and Time running cover stories about Lawsuit Hell?
Why is there a common perception of a lawsuit crisis? Why is Bush
talking about the need for tort reform (legislation to limit citizens
rights to a jury trial or limit juries ability to set punitive damage
It wasnt until the 1950s that lawyers began to win judicial precedents
establishing corporate responsibility for injuries to workers and consumers.
Corporations started to be held accountable and consequently their insurance
companies were increasingly being forced to pay damages.
The insurance industry responded with a public relations campaign against excessive
awards. Its strategy was to convince people who might sit on juries that
there was a problem.
By the 1980s, with the insurance industry in a slump, industry strategists
moved beyond targeting prospective jurors, and took on the law itself. Their
goal was to restrict citizens right to a jury trial. Their ad copy pointed
out that everybody pays for overzealous lawsuits. The industry couldnt
very well attack consumer and environmental protection or victims. Instead they
scapegoated the trial lawyers.
Dozens of tort reform measures were introduced in state legislatures.
Teams of lobbyists mobilized to push these bills through state legislatures.
The insurance industry mobilized right wing think tanks to focus on the crisis.
They targeted journalists and circulated bogus statistics about the costs
of frivolous lawsuits. Large corporations created fake grassroots groups
(called Astroturf) like Citizens Against Lawsuit Abuse and set up
chapters in local Chambers of Commerce.
Anecdotes of bizarre lawsuits buzzed on the Internet, and major media outlets
like U.S. New and World Report picked up on the stories without fact checking.
Conservative columnists at smaller papers also ran with these urban legends
of runaway jury verdicts. Did you hear the one about the man who sued Winnebago
after setting his R.V. on cruise control and going to the back to make some
coffee? How was he supposed to know the R.V. would crash? The fact that the
incident never happened didnt stop papers like the Weirton Daily Times
in West Virginia from printing the story in a column calling for tort reform.
Will outlawing our right to sue grossly negligent doctors for punitive damages
stop the escalating costs of health care? The non-partisan Congressional Budget
Office figures that medical malpractice lawsuits account for one half of one
percent of health care costs.
Would insurance rates go down? According to the American Insurance Association,
The insurance industry never promised that tort reform would achieve specific
premium savings. (March 13, 2002) and the American Tort Reform Association
added, We wouldnt tell you or anyone that the reason to pass tort
reform would be to reduce rates. (July 19, 1999).
What will tort reform accomplish? It will limit our ability to hold corporations accountable for their misdeeds. Corporate America has largely succeeded in buying up our legislators and capturing regulatory bodies. We must not let them wrest control of the judicial system as well.