Did you ever wonder about the backstory behind the McDonald’s hot coffee case? You know, the one where there was a huge million dollar verdict? Was that woman really just trying to get money? Or what? Did the jury go nuts?
One of the nice things about living in Salt Lake City is the great movies we have in town during the Sundance Film Festival. This year, a lawyer, Susan Saladoff, directed her first movie entitled, “Hot Coffee.” I was pretty skeptical that the movie could teach me anything. After all, I read the news, I am an attorney, and I know stuff.
This movie was pretty interesting to a person who likes to see both sides of an issue. Susan did a superb job, particularly for her first movie. And, I just read that HBO has picked up the movie.
So what is the backstory? Stella Liebeck was 79 years old and was sitting in the passenger seat of the car next to her grandson who was driving. They went to the drive-up window, and she ordered coffee. After they drove through the drive-up window, her son parked while she attempted to hold the cup between her legs and take the top off her coffee cup to add cream and sugar. The coffee dumped in her groin and inner thighs, causing third degree burns. The coffee was 180 degrees. The photos were horrific.
According to the movie, Stella’s daughter asked McDonald’s to turn down their coffee machines, and the company declined. They also asked McDonald’s to pay $20,000 to cover her medical expenses and settle the case. McDonald’s declined. So, she sued them. The evidence showed over 700 complaints had been made over a 10 year period regarding the temperature of McDonald’s coffee. Some evidence indicated McDonald’s had been advised to keep the coffee at no more than 130 degrees. Experts testified that even 155 degrees would have caused much less harm. The McDonald’s executives testified that the coffee was kept hot for maximum flavor, and McDonald’s testified that they thought people carried their coffee to work before drinking it – they didn’t drink it in their car. Really?
Stella Liebeck received $200,000 in compensatory damages, but the court reduced it to $160,000 because Stella was found to be 20% responsible. The jury awarded punitive damages against McDonald’s in the amount of $2.7 million, making the total award $2.9 million. A couple of older women jurors were interviewed in the film and indicated they didn’t think it was outrageous to order McDonald’s to pay $2.7 million, reflecting only 2 days of McDonald’s coffee profits. The jury verdict was reduced to three times compensatory damages or $480,000, plus the $160,000 for a total of $640,000. The case was appealed, and the parties settled the case for a confidential amount.
I understand tort reform and damage caps. When I explain damage caps to clients in mediation, I inform them that the legislature in their state has decided that the punitive damages/pain and suffering is limited to a set amount. So that even if the jury empathizes with them, the court will/may reduce a large verdict. I don’t pretend to know all the laws on damage caps. I research them depending on the state in which I am mediating. In some states, such as Idaho for example, the damage cap is $250,000. Proponents of damage caps believe, among other things, that without caps juries can be inconsistent in similar cases, and that malpractice premiums against doctors will become prohibitive. Opponents believe juries should decide on a case by case basis and that consumers are entitled to a jury determination rather than a damage cap.
I get it. But, I didn’t know the hot coffee story, and I didn’t know the verdict was reduced to $640,000. All these years I believed a multi-million dollar award was paid to a middle-aged woman who pulled up the drive up window, got coffee, spilled it on herself while she was driving, got greedy and sued McDonald’s. The story is actually a lot different. I think that is interesting.