The Modern Civil Justice System

Steven A. Adelman

One of the most infamous civil lawsuits of the late 20th century was based on a cup of McDonald’s coffee. Advocates for accident victims and consumer groups said that this case showed how well the legal system protects people from uncaring corporations that put profits over people. On the other hand, defenders of American business complained that this case proved that American juries were out of control, and that our civil justice system encouraged people to file frivolous lawsuits that actually cost consumers millions of dollars each year.

The McDonald’s case — Liebeck v. McDonald’s Restaurants, No. CV-93-02419, 1995 (N.M. Dist., Aug. 18, 1994) — provides a useful example of how the legal process has evolved to protect the rights of individual plaintiffs as well as the corporations they sue. Accident victims get their “day in court,” the chance to seek compensation even from powerful business interests. Corporations have many times more money than the people who sue them, and the legal system provides layers of protection from excessive verdicts from jurors who believe that big businesses can easily afford any award against them.

This chapter first reviews the facts of the McDonald’s hot coffee case, then applies its lessons to the issue of class and access to our modern civil justice system.

Facts of the McDonald’s Case

In 1992, a 79-year-old lady named Stella Liebeck paid $0.49 for a cup of coffee at the drive-through window of a McDonald’s restaurant in Albuquerque. She was in the passenger seat. Mrs. Liebeck put the cup between her legs and removed the lid. The car was not moving. While she was adding cream and sugar, the cup tipped over, spilling scalding hot coffee on her lap. Mrs. Liebeck suffered third-degree burns to her groin and inner thighs. She spent eight days in the hospital.

After she got out of the hospital, Mrs. Liebeck told McDonald’s about her injuries and asked to be reimbursed for her medical bills, about $11,000. McDonald’s offered her only $800. So Stella Liebeck decided to sue.

Before the trial, there were several chances to reach an out-of-court settlement. Mrs. Liebeck’s lawyer initially offered to settle if McDonald’s would pay her $300,000. McDonald’s turned her down. Just a few days before the trial, a mediator recommended that McDonald’s settle for $225,000. McDonald’s rejected this recommendation. So there was a trial.

At the end of the trial, the jury found in favor of Mrs. Liebeck and against McDonald’s. They found that she suffered $200,000 in compensatory damages for her injuries and medical bills, but they reduced that to $160,000 because they felt that she was 20% at fault for spilling the coffee in the first place. The jury also awarded Mrs. Liebeck $2.7 million in punitive damages to punish McDonald’s for serving dangerously hot coffee.

McDonald’s demanded a retrial, claiming that the verdict was improper. The judge refused, but he reduced the punitive damages from $2.7 million to $480,000. Both Mrs. Liebeck and McDonald’s filed appeals.

Before the appeals were heard, the parties reached an out-of-court settlement, reportedly for about $600,000. As a condition of the settlement, McDonald’s demanded that the exact amount of its payment to Mrs. Stella Liebeck be kept confidential.

Was this just a frivolous lawsuit?

Some critics of our legal system say that Stella Liebeck bought hot coffee and McDonald’s gave her what she paid for, so she should not have even been able to sue. They say this whole lawsuit would have been avoided if she had not carelessly spilled coffee on herself. There is some truth to this. Even Mrs. Liebeck did not claim to be completely blameless. Her point was that McDonald’s was serving coffee that was dangerously hot, knew of the exact danger this posed, but kept doing it anyway. The jury decided that she was right.

At trial, Mrs. Liebeck proved that McDonald’s corporate policy was to keep its coffee 20 to 30 degrees hotter than was drinkable so it would not have to make fresh batches during the day. McDonald’s executives admitted that the coffee was so hot when it was sold that it was “not fit for consumption.” The company admitted that people sitting in cars and wearing their seatbelts could not just stand up and wipe such hot coffee off themselves fast enough to prevent massive burns. McDonald’s even admitted that in the ten years before Mrs. Liebeck was burned, it had received more than 700 reports of people getting hurt when they spilled McDonald’s coffee on themselves. But up to the time Mrs. Liebeck got hurt, the company did nothing to reduce the danger of burns from its coffee.

Was Mrs. Liebeck accountable for her own fault?

The American civil justice system generally makes each person responsible for the harm they cause. This applies even to the accident victim herself. In this case, the jury said that Mrs. Liebeck should have been more careful opening the lid to her coffee. They decided that the accident was 20% her own fault, and that is why they reduced her compensatory damage award by 20%. But the jury also found that McDonald’s should not have regularly served coffee so hot that it caused these kinds of burns. That is why McDonald’s had to pay.

How much of a difference did it make that McDonald’s is a big corporation?

At trial, the jury learned that McDonald’s earned $1.35 million a day just from selling coffee. Since punitive damages are intended to punish a person or company that did something wrong in the past and to discourage similar conduct in the future, the amount of the verdict must be large enough to send a clear message. In other words, if a punitive damages award against a large company is too small to hurt, then the company may not change its bad practices.

Critics complained that the $2.7 million punitive damages award was an example of a runaway jury giving an old lady a windfall from a big corporation. But the legal system protected McDonald’s, too. The trial judge agreed with McDonald’s that the jury had awarded too much, so he reduced the punitive damages award to three times Mrs. Liebeck’s compensatory damages, or $480,000.

Conclusion

Sir Winston Churchill once said that “democracy is the worst system in the world, except for all the others.” The same can be said for the American civil justice system at the beginning of the 21st century. It allows any individual to sue any person or corporation that may be responsible for his or her injuries. But the legal process is often long, and big corporations have much more money to spend on lawsuits. Even if a jury finds for the plaintiff, the judge can reduce the jury’s award, as happened to Stella Liebeck.

On the other hand, every corporation can be held accountable for its actions. No one is above the law. Even a little old lady can sue and win her case and maybe even force a company to change its practices for the better. After Stella Liebeck’s case was resolved, McDonald’s finally lowered the temperature of its coffee.