Vail Daily column: The most misunderstood lawsuit
In the last installment of this column, I lamented the headlong rush into litigation and the fact that a lawsuit has become the default option with which to resolve a dispute. As I hinted in that missive, I am not saying that litigation should never be an option. Litigation is one arrow in the dispute resolution quiver and it must be called upon when needed. One common circumstance where litigation may be needed is when there is an imbalance of power and resources between the disputants. In that event, a lawsuit can achieve reparations in a way that negotiation and/or mediation would not.
Ironically, the paradigmatic example of the “necessary” lawsuit is the one case cited as the root of all that is evil with American jurisprudence: the McDonald’s hot coffee case. Officially referred to as Liebeck v. McDonald’s Restaurants, et. al. in the District Court of Bernalillo County, N.M., the case was a flashpoint lawsuit that received tremendous media attention back in 1994. The Liebeck decision is still used in popular discourse as emblematic of the excesses of the justice system and lawyers’ lack of scruples. This characterization conveniently ignores the details of the case.
Ms. Liebeck was an elderly woman who ordered coffee from a McDonald’s drive-thru in Albuquerque. Seated in the passenger side of her grandson’s car while parked, she attempted to put sugar and cream in her coffee. It being 1994, the car did not have cupholders and the cup and cap design was not as advanced as those to which we have become accustomed to. In the course of her endeavor, she spilled the entire coffee all over her lap. The coffee was at such a temperature that she suffered horrific third-degree burns that required skin grafts, an eight-day stay in the hospital, and two years of subsequent medical treatment.
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The medical bills of Liebeck were considerable. Before filing suit (and, to my knowledge, before even hiring a lawyer), she reached out to McDonald’s asking for the sum of $20,000 to pay for incurred and expected medical expenses. McDonald’s, the corporate behemoth portrayed as the real victim of this case, counteroffered at what I would consider an insulting $800. After suit was filed and before trial, Liebeck’s attorneys further attempted to secure a reasonable settlement, to no avail.
At trial, the plaintiff put on evidence that McDonald’s required its franchisees to serve coffee at a temperature that would cause third-degree burns in two to seven seconds. Ms. Liebeck’s lawyers also introduced evidence that McDonald’s did not alter its practices even though it was aware of more than 700 incidents in the past decade in which people were severely burned as a result of McDonald’s coffee. Conversely, McDonald’s argued that the coffee was labeled as hot and denied any wrongdoing.
In its verdict, the jury found that the labeling was insufficient. They decided, under the principle of comparative negligence (a topic for another day), that McDonald’s was 80 percent at fault while Liebeck was 20 percent at fault for her injuries. The jury awarded Ms. Liebeck $200,000 in compensatory damages, which was reduced to $160,000 due to her fault of 20 percent. The most attention-grabbing aspect of the verdict was the jury’s award of $2.7 million for punitive damages. However, that award was reduced by the judge to $480,000 for a total of $640,000. Both sides appealed the judgment but ended up settling for an undisclosed amount before the appeal was decided. The settlement amount is generally believed to be in the $500,000 range. For a horrible injury caused in part by the willful ignorance of a billion dollar corporation, that amount does not seem wholly unreasonable. This is particularly true given that the plaintiff was originally seeking a much lower payment.
I am not necessarily defending the outcome of this case, but merely providing a clearer picture of what transpired as an example of how the system is not as bad as it is often portrayed. The system is so complex that generalities are useful for explanatory purposes but certainly not perfect. Each case must be evaluated on its own merits, and there will always be a difference of opinion as to the suitability of the result; that is why it is a dispute and not a utopia. For a more in-depth view of this case and its role in the tort reform movement, check out the excellent documentary “Hot Coffee.”
T.J. Voboril is a partner with Thompson, Brownlee & Voboril LLC, a local civil litigation firm, and the owner-mediator at Voice of Reason Dispute Resolution. For more information, contact Voboril at 970-306-6456, firstname.lastname@example.org or visit http://www.thompsonbrownlee.com.