Liebeck vs. McDonald’s Case

Stories of frivolous lawsuits have become the most favorite quip of mass media. (Greenlee 1996). Do cases like Liebeck versus McDonald’s $2.9 million coffee spill-over case examples of the legal system run amok? Liebeck’s coffee spill-over case has become the poster child of all frivolous litigations. In this essay, we try to ascertain the nature and ethicality of such cases and try to investigate who is responsible for such ‘accidents’ or ‘litigations’.

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We will discuss the major issues involved in the Liebeck case, both ethical and legal. We will try to understand what responsibilities McDonald’s has towards its consumers and vice versa. As has been argued by McDonald’s, what the company is supposed to do if the consumers want their coffee hot? Is it a case of irresponsibility on part of an insensitive and profit-oriented corporate or a “frivolous lawsuit” case? The role mass media played in the case to popularize the lawsuit and to a great extent make a mockery out of the system (www.stellaawards.com being an example). This paper tries to understand if the lawsuit and the verdict in the lawsuit would affect future product-related lawsuits. Then we try to understand whose responsibility is it, the consumer’s or the caproate’s, for such a situation.

Before we deal with the legal or moral or ethical issues of the coffee spill-over case, let us get the facts straight. In 1992, seventy-nine-year-old Stella Liebeck was sitting in the passenger seat when her grandson pulled his car forward and stopped for his grandmother to add sugar and cream to her coffee, bought from McDonald’s. While parked, Ms. Liebeck placed the cup between her knees and attempted to remove the plastic lid from the cup.

As she attempted to remove the lid, the contents of the cup spilled onto her lap. The coffee was estimated to be somewhere between 180 to 190 degrees. Ms. Liebeck was wearing sweatpants that day, which absorbed the scorching coffee, holding it next to her skin. She suffered from third-degree burns which extended through to her subcutaneous fat, muscle, or bone (Greenlee 1997). Liebeck was permanently disfigured and disabled for two years as a result of this incident.

She asked for medical damage from McDonald’s which the company refused. Then the lawsuit was filed by Reed Morgan against McDonald’s in 1993 alleging that the coffee she purchased was defective because of its excessive heat and because of inadequate warnings.30 Punitive damages were also sought based on the allegation that McDonald’s acted with conscious indifference for the safety of its customers.

The biggest issue that has to be considered in the Liebeck case and the subsequent consumer product litigation cases is if they are frivolous lawsuits. The issue that needs to be discussed in reference to this case and the subsequent case of the ‘hot pickle’ case is that if the accidents that occurred were due to carelessness of the consumers or they were due to unconcerned negligence of McDonald’s. Cain would suggest that this case cannot be considered a frivolous lawsuit case.

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He believes that “Ms. Liebeck had a very strong case against a very unsympathetic corporate defendant.” (p.17) Mardar (1999) argues that the injuries that the old lady suffered were very serious and there was no reason for the media to make a mockery of the case.

Liebeck’s case illustrates a few problems that concern punitive damages. First, these cases receive extensive attention from the media. Second, these cases show how corporate become insensitive to meet their profits the safety of their consumers. As illustrated in the Lieback case, McDonald’s company policy was to serve its coffee at 185 degrees and its own quality assurance manager testified that this coffee was not “fit for consumption” because it would cause scalding injuries to the mouth and throat if drunk by the consumer.

McDonald’s knew that its coffee was being served at extremely hot temperatures, but market research told them that McDonald’s customers “want hot coffee, they want it steamy hot, and they expect to get it that way.” (Greelee 1997 pp. 720-1) McDonald’s indifference to customer safety is evident in the Liebeck case. The issue of corporate irresponsibility was further testified when they said that statistics proved that there were only a very few cases of spill burns when compared to millions of McDonald’s coffee cups they sold.

The most important issue that is pointed out in the Liebeck case is the matter of corporate ethics. The potent questions that arise are done corporations that provide ‘known’ hazardous products (like hot coffee or cigarette) have special duties to individuals and/or to society? Do such corporations have ethical duties, the breach of which may be relevant in making judgments and assessing damages? If so, what are these duties and how much should they influence litigation?

The argument put forth by McDonald’s was that Liebeck contributed to her own injuries by placing the coffee cup between her legs and by not removing her clothing promptly after the spill. McDonald’s further alleged that the severe nature of the burns suffered by Ms. Liebeck was worse than usual because of her older skin making her more vulnerable to more serious injuries (Gerlin 1994). A McDonald’s executive testified that McDonald’s had chosen not to warn its customers of the possible severe burns its coffee could cause because “(t)here are more serious dangers in restaurants.” McDonald’s human factors engineer admitted that the number of hot coffee burns suffered by McDonald’s customers is “statistically insignificant” in comparison to the one billion cups of coffee sold by McDonald’s every year. ( Greenlee 1997)

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The dominant CSR approach that is taken in this area is the stakeholder approach. In contrast to a shareholder approach, which holds that corporations’ ethical responsibility is to abide by the law and maximize the interests of those who are financially invested in them (Friedman 1962 and 1967), stakeholder theory holds that corporations have ethical responsibilities to all who are affected by their decisions and actions. The stakeholders include investors, consumers, suppliers, society, and the environment.

In Liebeck’s case what was important to notice was that McDonald’s was aware of the risk involved in spillage of hot coffee served at 180 degrees but failed to do anything to minimize it and failed to warn consumers about it. McDonald’s knew their coffee presented a danger to customers. A McDonald’s quality assurance manager admitted during the trial that “[our coffee] is not fit for human consumption because it would burn the mouth and throat” (Fact Sheet).

During the trial, McDonald’s conceded that it had known about the risk of serious burns from its coffee for over ten years. From 1982 to 1992, McDonald’s received over 700 reports of burns from their coffee (Morgan, 1996). McDonald’s executive Christopher Appleton testified that McDonald’s knew its coffee sometimes caused serious burns and admitted that customers were unaware of the extent of danger from coffee spills served at the company’s required temperature and gave no explanation as to why there were no warnings on its cups (Morgan, 1996).

Further, McDonald’s stated that it had no intention of reducing the temperature of its coffee, saying “there are more serious dangers in restaurants” (Gerlin, 1994). The most damaging testimony came when Dr. P. Robert Knaff, a human factors engineer for McDonald’s, told the jury that hot-coffee burns were “statistically insignificant” when compared to the billion cups of coffee McDonald’s sells annually (Gerlin, 1994).

To the jurors, this statement indicated that the burns suffered by Liebeck did not matter to McDonald’s because they were uncommon (Gerlin, 1994). The jury awarded a $2.7 million award in punitive damages, based on their finding that McDonald’s had engaged in willful, reckless, malicious, or wanton conduct (Morgan, 1996).

When a manufacturer knows of risk and fails to minimize it and/or warn consumers about it, liability for the consumer’s choice may shift, at least to a significant extent, to the manufacturer.

Since punitive damages aim to punish a wrongdoer from engaging in the wrongful act and to discourage the wrongdoer and others from a similar future action, the degree of punishment resulting from a judgment is proportionate to the wealth of the guilty party (Restatement). Clearly, the evidence pointed out that there are a

Media also may inaccurately portray a system gone wild. The “McDonald’s Coffee lawsuit provides an example. In 1994, a jury awarded 81-year old Stella Liebeck $2.86 million for injuries she sustained from spilled McDonald’s coffee. The media, hungry for attention-getting headlines, portrayed a tainted system of justice with headlines such as “Coffee Spill Burns Woman; Jury Awards $2.9 million” (Wall Street Journal, Aug. 19, 1994, at B3) and “Hot Cup of Coffee Costs $2.9 million.” (The Orange County Reporter, Aug 19, 1994, at C1)

However, both the media and those seeking to limit consumers’ legal rights overlooked the facts of the case, described supra, which places the award to Mrs. Liebeck in a significantly different light. Media coverage of the ultimate reduction of the award by the trial judge: from $200,000 in compensatory damages to $160,000 and from $2.7 million in punitive damages to $480,000. Although in the past the media have sometimes disregarded the scientific evidence and provided skewed information that shaped public opinion, the media can play an important role in better informing the public on matters of health and science and improving public understanding of the concepts involved, such as risk and causation.

The similarities between the hot pickle case and the Liebeck case are that the company was aware that the pickle and the coffee were served hot. Another similarity between both the cases was that the product litigations were for “defective products”. Both Liebeck and Martin claimed that the product designed, be it hot coffee or pickle, was defectively designed.

The case put up by McDonald’s was that were:

  1. McDonald appealed to the ethic of individual responsibility rooted in the American culture. They argued that it was Liebeck and not McDonald’s who spilled the coffee.
  2. They directly challenged the proximate cause of the burn. The company presented a burned specialist who testified that the Liebeck could have got the same degree of burn had the coffee been at a lesser temperature, say 130 degrees. He said that the main cause of the burn was Liebeck’s advanced age.
  3. McDonald argued that their internal consumer survey showed that customers prefer coffee very hot. McDonald’s asserted that customers buy coffee on their way to work or home, intending to consume it there. However, the company’s own research showed that customers intend to consume the coffee immediately while driving.
  4. They argued that Liebeck’s arguments were an example of a litigious plaintiff seeking damages for what she caused herself.
  5. The defense, at least according to news reports, framed the corporate decisions and plaintiff’s injuries in statistical terms arguing that the episode was statistically insignificant.

What are the arguments a jury should think of when hearing over the case of hot coffee or hot pickle? One should always do a risk-cost-benefit analysis. As a practical matter, consider the process that a company might undertake if it wished to complete a comprehensive assessment of the costs and benefits of a particular safety improvement. It would obtain a thorough understanding of the risks involved and how the safety modification would affect those risks.

If it chose not to adopt a safety measure because the costs exceeded the benefits in its view, then it would be explicitly trading off lives against money, just as coffee retailers and McDonald’s trade-off burns against quality and profits. Moreover, proceeding in a way that is not risk-free can be viewed as knowingly inflicting harm on consumers even though at a probabilistic level even though such actions may be entirely in line with fundamental law and economics principles for efficient levels of safety. Unfortunately, knowingly inflicting a risk, albeit in a probabilistic sense, triggers conditions that may be highlighted for juries with respect to the award of punitive damages.

Now in the case of Mcdonald’s, it did a thorough risk analysis and knew the harm that could have been caused by the ‘hot coffee’ but it decided to go with the hot temperature as because that is what their customers wanted. In this respect, the company was safeguarding the interest of the consumers. So was McDonald’s being socially irresponsible by serving hot coffee?

The media are now playing another important role in products-liability litigation. The quantity of media attention to litigation tends to receive much attention as an indicator of impact, the substantive content or quality of the coverage has drawn far less scrutiny. This is important, after all, for the news practices of journalists and editors contribute in distinctive ways to the “construction” of public interest litigation.

Systematic pressure to “sell” news in simplistic, appealing, even titillating ways that attract readers and thus advertising dollars and to fit news rapidly and cheaply into simplistic, standardized “scripts” make mass media important sources of mass legal knowledge production. Indeed, the law itself, as a form of constitutive knowledge, is significantly produced and reproduced by the narratives circulated by print and electronic news along with other forms of mass-produced entertainment. That constitutive content justifies attention to the qualitative content as well as quantity of coverage.

The stellaawards.com is a mockery of the case and other similar product liability cases. This is important as a case that raises issues such as the responsibility of the consumer or corporate? Even though we may agree that there are certain cases that are torts in American parlance, but this case cannot be exactly termed as a tort case and hence the mockery is not well placed and the media has been ethically wrong to have made a circus out of the case.

They turned a case that caused Liebeck pain and permanent disfigurement, into an advertisement for tort reform. Not only to corporate America but also to many disinterested observers, the case became the paradigm of the frivolous lawsuit gone awry, a frightening example of the vulnerability of corporations in the face of an ignorant jury bent on vengeance

Far too many have the misconception that if any insignificant, trivial misfortune happens to someone, the affected person can manipulate the legal system until he or she finally strikes gold. That simply is not the case. Our legal system has numerous checks and balances and control measures in place that deter and penalize frivolous lawsuits and curb excessive jury verdicts. Our legal system works; and those who degrade and twist our profession by spreading half-truths and distorting reality, sadly align themselves with those who have exploited the ignorance-induced fear of others throughout history. It is truly amazing how the truth can change perspectives.

Just like Moses at the burning bush, we may need a little extra ammunition for the mission ahead. Well, here it is. The next time someone is indulging in the latest pastime of “lawyer-bashing,” challenge that person by saying, “I’ll bet you probably think that the McDonald’s coffee lawsuit was a frivolous lawsuit, don’t you?” After they accept the challenge to your seemingly indefensible position, you can then begin to (politely) dismantle their perception of the poster child, cornerstone, and personification of frivolous lawsuits by informing them of “the rest of the story” behind Liebeck v. McDonald’s Restaurants.

Understanding how people allocate responsibility for safety among manufacturers, service providers, customers, and other entities is critical for many decisions. The effort that companies put into developing safe products and practices is driven in part by their legal duty to do so. The reputation that companies develop through public recognition of safe practices can affect brand image, customer loyalty, and sales volume.

Coffee is to be served hot. This fact cannot be avoided and if McDonald’s starts serving coffee that is not as hot, then it will lose onto its customers, which affects its profits, thus affecting its shareholders. So what should McDonald’s do? According to Grunig (1992), “when conflict occurs, publics ‘make an issue out of the problem” (p. 13). If the organization waits for these issues to occur before it manages its communications with its publics, the organization will confront a crisis and will be forced to invoke short-term crisis communications.

However, if the organization uses issues management to identify and anticipate potential issues well before they reach a threatening stage, then long-term symmetrical communications can be planned and crises possibly avoided. The point of concern here is that McDonald’s also argued that consumers know coffee is hot and that its customers want it that way but the company also admitted its customers were unaware that they could suffer third-degree burns from the coffee and that a statement on the side of the cup was not a “warning” but a “reminder” since the location of the writing would not warn customers of the hazard.

Further, in the McDonald’s case, company documents revealed that in the past decade the company had received at least 700 complaints of coffee burns, ranging from mild to the third degree and that it had settled claims from scalding injuries for more than $500,000 (Gerlin, 1994). So was it not the company’s responsibility to have put the “warning” label instead of just reminding its customers? Surely Mcdonald’s was responsible for this accident. “Decades of studying business’ corporate social performance…lead one to conclude that corporate citizenship is real—it is expected of business by the public, and it is manifested by many excellent companies” (Carroll, 2000, p. 187, italics in the original).

Reference

Gerlin, A. (1994). A matter of degree: How a jury decided that a coffee spill is worth $2.9 million. The Wall Street Journal, pp. A1, A4.

Grunig, J. E. (1992). Communication, public relations, and effective organizations: An overview of the book. In J. E. Grunig (Ed.), Excellence in public relations and communication management (pp. 1-28). Hillsdale, NJ: Lawrence Erlbaum.

Bennett , W. Lance. (1996) News: The Politics of Illusion. 3rd ed. White Plains, N.Y.: Longman.

Carroll, A.B. (2000), “The four faces of corporate citizenship,” in Business Ethics 00/01, Richardson, J.E. (Ed)., Dushkin/McGraw-Hill, Guilford, CT, pp. 187-191.

Morgan, S. Reed. Verdict Against McDonald’s is Fully Justified, THE NATIONAL LAW JOURNAL, Vol. 17 No. 8; 1996, at A20.

Fact Sheet: McDonald’s Scalding Coffee Case. Web.

Greenlee, Mark B. (1997), “Kramer v. Java World: Images, Issues, and Idols in the Debate over Tort Reform”, 26 Cal UP Rev: 701-718.

Cain, Kevin G. (N.A.)McDonald’s Coffee Lawsuit” Journal of Consumer & Commercial Law: 14-20.

Mardar, Nancy S. (1998), “Juries and Damages: A Commentary”, 48 DePaul Law Review 427.

“Coffee Spill Burns Woman; Jury Awards $2.9 million” (1994) Wall Street Journal, , at B3.

“Hot Cup of Coffee Costs $2.9 million.” (1994), The Orange County Reporter, , at C1.

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