I write this blog with all due respect to the old lady and sympathize with her. Since the day I heard about this case I was always intrigued by it. My interest in this case is based on two main factors a) does this case in particular or do cases like these belong in the courts and b) what additional costs did consumers incur due to this and other such cases?
If anyone does not already know about this case here are the details:
Stella Liebeck, 79, of Albuquerque, New Mexico, was in the passenger seat of her grandson's car when she was severely burned by McDonalds' coffee in February 1992. They purchased the order from a drive through window and stopped so that Ms. Liebeck could add cream and sugar to her coffee. She 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. She suffered full third-degree burns over 6 percent of her body. She was hospitalized for eight days, during which time she underwent skin grafting. She sought to settle her claim for $20,000, but McDonalds refused, they offered $800.
During the discovery period for the case it was found that between 1982 and 1992 over 700 people had claimed that they suffered burns due to similar coffee spills. The claims vary but point to the fact that McDonalds was aware of this problem. The McDonalds coffee was thought to be sold at 180 to 190 F for optimal taste. Other establishments were supposedly serving coffee at 135 to 140 F. At either of these temperatures there is an obvious possibility of burn damage but accounts vary on the level of the burns. McDonalds was aware that a good number of its customers drank coffee on the move hence the high temperature and use of Styrofoam cups do not make sense, they did have warnings printed on the cups though. But would customers be dissatisfied if the coffee was, say, just 110 F?
The jury awarded Ms. Liebeck $200,000 in compensatory damages. This amount was reduced to $160,000 because the jury found Ms. Liebeck 20 percent at fault in the spill. The jury also awarded $2.7 million in punitive damages, about two days of McDonalds' coffee sales. Post-verdict investigation found that the temperature of coffee at the local Albuquerque McDonalds had dropped to 158 F. The trial court subsequently reduced the punitive award to $480,000 -- or three times compensatory damages -- even though the judge called McDonalds' conduct reckless, callous and willful. The parties eventually entered into a secret settlement which has never been revealed to the public, despite the fact that this was a public case.
A cup of coffee that cost 49c in 1992 ended up costing McDonalds a lot more. From the company’s standpoint this was an absolute blunder. What could have been solved for $20000 ended up costing a lot more with the added burden of the PR nightmare and during the course of the case they probably had some of their dirty laundry aired out. Surprisingly majority of the public were outraged by the settlement and sided with McDonalds on this. But it also points to the fact that despite receiving many complaints about burns due to the coffee temperature the company continued to skirt the issue. I still cannot completely come to terms with the fact that McDonalds was 80% responsible for this particular incident.
From an individual’s standpoint where does the responsibility begin? Even if this is not a frivolous lawsuit, a result I have arrived at after reading the many articles on this case, was it okay for the 79 year old Ms. Liebeck to hold hot coffee between her knees in order to add the sugar? We will never know the circumstances of the other 700 odd cases. Would Ms. Liebeck have sued if the coffee was bought at a local cup of Joes and not McDonalds? Would the local coffee shop have had the same reaction as McDonalds or if its reaction was different might Ms. Liebeck have accepted the offer even if it was lower than the $20000? I guess we will never know the answers to those questions. I was not able to find out if the price of a cup of McDonalds coffee increased after 1994 because of this lawsuit. I’m assuming there were some innovations in the cup and lid domain post 1994 and not only all the coffee retailers but other companies too improved their safety practices.
Finally, whatever side one takes on this case, I would rather reside in a country where there are democratic institutions willing to take note the possibility of injustice and hear arguments about this, than in a country that has no such institutions or intention to provide justice.