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SPILLING THE BEANS – TORT REFORM AND FRIVOLOUS LAWSUITS IN THE LIGHT OF THE HOT COFFEE CASE

Author: Smruti Kanugo, pursuing B.A.,LL.B. from National Law Institute University, Bhopal.


INTRODUCTION

Whenever there is a talk of personal injury lawsuits, in America or elsewhere- onemention that is evidently always there is the hot coffee case of mc Donalds. Everyone- including some of the very eminent jurists are led to believe that this is a classic example of a frivolous lawsuit. A frivolous lawsuit is something which contains no merit when it comes to law. In the eyes of law, such a lawsuit has no basis - neither in law nor in fact.[i]The words that have been used to determine such lawsuits- particularly for this case are - absurd[ii], nonsensical[iii], ridiculous, ludicrous [iv]and the likes. The typical reaction of the public – was that the coffee is supposed to be hot ! and that since she was the one who spilled it on herself , she should be the one responsible ! [v]however, the case is nuanced beyond this initial human reaction. More than 20 years have passed and the case is still invoked whenever talks about frivolous lawsuits take the major stage- more so because this was a David-vs goliath situation- an old woman contending against a million dollar corporation for something as overlooked as the temperature of their coffee. What is ridiculous for many but a legal victory for those who are scholars of law - is that she succeeded. This paper aims to analyse the legal nuances involved and why was it that the court decided against Mc Donalds- for a woman spilling coffee over herself and causing burns – holding the corporation responsible for them. It seems almost hilarious at the first instance, and the article aims to analyse the reasoning behind the apparently wayward verdict.


But before we dive into the case , we must understand that one of the purposes of the tort law is to promote safety. This case was a classic example of negligence torts, as we would see in the analysis . Negligence torts include harms that occur due to a person or company’s failure to exercise due care against some risk that is knows or is conceived to be potentially harmful . The charge against the plaintiff in this particular case was of gross negligence- the plaintiff won , but there was widespread agitation- mostly funded by bigshot companies for tort reforms. How justified are these reforms, and what do they imply will also be discussed in this paper.


OVERVIEW OF THE CASE[vi]

More than 20 years ago in new Mexico, Alberbique, an 79 year old lady, stella Liebeck while sitting in a car, spilled scalding hot coffee all over herself causing severe burns . When Mrs. Stella Liebeck ordered coffee with her meal , there was no place she could keep the cup . She held the coffee between her knees to steady it and took the lid off. Due to an accident the coffee spilled . She sued mc Donalds and was awarded a whopping sum of $2.9 billion which sparked a debate, on the history of frivolous litigations in America and the need for tort reforms. Stella Liebeck passed away in 2004 at the age of 91, and her daughter and son in law in various interviews state that the nephew was driving the car and drove into the Mc Donalds with a coffee and a meal. There was no cup holders and so she studied it between her knees and the whole cup collapsed. The temperature of the coffee in Mc Donalds is 187 degrees in a styrofoam cup and styrofoam melts in that temperature [vii].


More than two decades later still, the case is cited as one of the most prominent ones in the list of frivolous lawsuits and is widely ridiculed. But the fact remains ,that stella Liebeck did not win the case because of the lawsuit being frivolous . She won it because the system was right and the company was charged for being negligent in its conduct towards the general public. The lawsuit had the whole country talking and many laughing. But stella suffered 3rd degree burns on 16 pc of her body[viii]. Corporations invested millions of dollars distorting the story to promote tort reforms all throughout the country system .


DETAILED FACTS

According to the facts in the judgement [ix], Stella liebeck was a 79 year old lady living in Albuquerque, new Mexico. On the fated day, on February 27, 1992 she along with her grandson went to the Mc Donalds shop and ordered a cup of coffee worth 49 cents from the drive through window. the grandson of Mrs stella, after taking the coffee parked the car to allow Mr Liebeck to add cream and sugar to it . the car they owned was 1989 Ford probe which did not have any space to hold glasses or cups. As any ordinary reasonable person would , Mrs Liebeck decided to hold the cup between her knees to remove the lid and add the cream and sugar to her coffee. The cup collapsed and the entire coffee fell on her lap. the pants of the thick material that she wore absorbed the steaming hot liquid and held it against the skin of her legs. The temperature of the coffee- 180 to 190 degrees- scalded her thighs , the whole of the pelvic region and the groin and she suffered third degree burns requiring skin grafts. Due to the skin grafts, and became concerned about her money. She wrote a letter to Mc Donalds asking them to cover her medical and to check the temperature of the beverage because it did not seem reasonable that someone would have this kind of injury from coffee. Initially when Mrs Lieback discovered the skin grafts process would take money , she had no intention to move to court and simply demanded a compensation from Mc Donalds to cover the medical bills. [x]


The medical cost she encountered was big. Her daughter, who had to care for her mother and thus had to drive her to different hospitals also demanded the compensation for her loss of income. In total , Mrs Liebeck wanted to settle for $20,000. The offer that Mc Donalds made was a flimsy $800.[xi] Mrs Liebeck, frustrated at the behaviour of the company sought the help of the courts- and met an attorney specialising in personal injury in Santa Fe, New Mexico. According to Reed Morgan, the attorney, “ I thought at the time that whenever you can see a scenario like this where somebody is using a consumer product, and they’re doing something reasonable, it’s foreseeable that they’re going to spill a liquid—whether it’s a cold liquid or a hot liquid,[xii]” Morgan said. “I figured that when you wind up with deep third-degree burns and skin grafts, there’s got to be a better way for society to be functioning than buying drinks that are that scalding hot.[xiii]


It was found during the course of the proceedings that a normal home brewer should be between a 142 to 162 , Moreover in a ceramic cup the heat is dissipated. 187 degrees was in Mc Donalds manual, because the higher the temperature of the coffee the higher the shelf life. [xiv]It was a business model which caused irreparable damage. The person they were working through told them to call a lawyer and Mc Donalds insisted they wanted to go for a jury trial. Stella never again regained the quality of life that she had before.


ARGUMENTS BEFORE THE JURY

One of the major arguments put forth was that - a liquid of a temperature of 180 to 190 degree Celsius could lead to severe damage and third degree burns in as less as two to seven seconds. In Mrs Liebeck’s case , the clothes she wore absorbed the scalding liquid and held it against her skin causing severe injuries . An expert of thermodynamics also went forth to suggest that had the coffee been served at 155 degrees, it would not have caused the injuries as it would have had time to cool down . Also, if the coffee spills at that temperature on bare skin, it just causes 2-degree burns. Moreover, this wasn’t a rare case as the plaintiff wasn’t the only one who charged the company of the same negligent act. there were more than 700 cases of similar burns already registered with Mc Donalds.[xv]

From the side of Mc Donalds the claim was that the consumers did not consume coffee before they had reached their intended destination . but the facts, research and even the company’s internal research showed that most of the consumers drank their coffee while still inside the car. It was reported , by Morgan and his team that between 1892 and 1992 , there were more than 700 reports of people being scalded by Mc Donalds coffee[xvi]. Reports varied in the severity of the burn and according to the reports the company had spent $500,000 in just setting up claims of burn injuries . This fact is important to the building up of the case . As there were 700 cases, it was evident that Mc Donalds knew about the dangerous levels of temperature of their coffee and still failed to address the issue. The arguments which became important to lead up to the judgement are –

1. The manual of Mc Donalds, required it to serve their coffee hot even to the temperatures of 180 – 190 degrees.

2. If any liquid at that temperature is spilled on human skin, its capable of causing third degree burns in a matter of 6-7 seconds

3. Mc Donalds admitted that since there were 700 cases of the same measure it had known the harms of serving scalding hot coffee for more than 10 years

4. Mc Donalds they argued that the number of burns were insignificant as compared to the number of cups of coffee sold each year.

5. The quality assurance manager, of Mc Donalds itself testified, that the temperature at which the coffee was poured into the Styrofoam cups wasn’t fit for consumptions as it would result into burning the mouth and the throat

6. Mc Donalds at the trial, did concede to the fact that the consumers of its coffee were unaware of the extent of risks which the coffee if spilled to that temperature posed . Mc Donalds conceded that it had not adequately warned the customers about the risk and could offer no substantial explanations as to why it did not.


THE IMPACTS OF THE DECISION

The judge was so enraged by what had happened that he instructed the jury to look into punitive damages.[xvii] There was a very different reaction all over the country, Mc Donalds case was glorified in order to attempt to pass a statute legislation which was going to limit the consumer right of going to court. It meant that there would be caps on damages and that there were going to be all sorts of changes in suits limiting when can a consumer go to the court. And so there was a humongous campaign by the industry attempting to affect jury and the senators and the hot coffee case provided just the grounds . Looking at the hearings about the tort reform , the most common citation to justify tort reform was the Mc Donalds coffee case. The case since then has remained a matter of speculation and public outbreak about frivolous American lawsuits. Most of the outrage - highly misdirected. A billion dollar organisation , and its ability to control the image of the case in people’s minds is alarming . The company along with the conservative lawmakers, accepting huge sums of money from those corporations induced and set the wheel for sweeping law reforms in the American law of torts as it was seen and ended with mega brands trying to control what happened to the day, there arose attacks on personal injury attorneys. A false narrative story was widely spread about American frivolous law suits and as a result tort reform happened . The reforms severely limited the citizens right to approach the civil justice court . There were news channels which named the case as a poster child for excessive law suits. Many shows, and comedians, even in music- it was mocked and laughed and jeered at.


THE MISIFORMATION CAMPAIGN

At the crux of it there were 3 main reasons why the public remained misinformed about the stella Liebeck case

1. The major focus being on the sum of the award to her as punitive damages drew major public attention and made the public digress from looking at the case with an impartial perspective.

2. A planned and concerted effort taken down by the big corporations to skew the public opinion about the tort reform

3. Widespread distorted versions of the case and a failure to report the actual injuries caused to the plaintiff distorted the case. These three elements kickstarted the move toward tort reform through capping damages and continues to aid in the erosion of the 7th Amendment and the successful curbing of lawsuits that could be filed by the Americans against corporates .


WHY WAS LIEBECK AWARDED PUNITIVE DAMAGES

After a trial which lasted a week , a jury consisting of 12 persons , used comparative negligence and found out that Mc Donalds was at an 80 per cent fault for the injuries of Mrs Liebeck. [xviii]They gave an award of $200,000 to Stella Liebeck . In the whole incident her fault was filed at a 20 percent for her injuries and hence her award was reduced to 160,000 $ . Under punitive damages , the jury then awarded stella another $2.7 million dollars . To bring the number in perspective , this amount is the whole income of Mc Donalds from coffee sales in two days [xix]. By punitive damages one means a penalty to ensure a change in the current behaviours of the organisation[xx]. In a nutshell , the jury did not completely account Mrs. Liebeck for some of the damage that occurred to her because she held the coffee inappropriately . But then again at the end of the day, if the temperature of the coffee was reasonable, the injuries would not have occurred at all and Mrs Liebeck would not have had to go through all the mental trauma that she did.


Bases of awarding punitive damages

1. Duty of care- Gradually, the duties of care have evolved and technology has expanded , making it easier to show a breach of duty towards the plaintiffs.

2. Strict liability - The scope has increased greatly , for activities, products , materials which are dangerous. The law has evolved to allow a relatively easier proof than under traditional liability of negligence and the resulting payoff to the plaintiffs, often higher than their own expectations.

3. Higher standard of living - The rise in the emerging idle class, brought with it increased sense of kindness towards the victims, along with a higher basic standard of living and this disruptions to this elevated standard of life required compensation and hence misconduct which is reckless might qualify for a generous punitive damage award

4. Actual or perceived existence of deep pockets


THE PROXIMATE CAUSE THEORY

There was a recent similar case – Shih V Starbucks [xxi]which mirrored the facts. The case involved a lady , A cup of hot beverage , accidental spilling of the beverage and resultant burns [xxii]. However this time, the verdict was in favour of the defendants. What was the difference ? The deal breaker clause here is the proximate causation. In the Shih case, the claimant could not prove the alleged manufacturing defect in the tea cups without a sleeve- to the spillage . Shih apparently put the cup on the table , wobbled, extended her hand for support and spilled the hot tea on herself. The court held that such an unorthodox maneavour wasn’t foreseeable by starbucks and hence the verdict. The proximate cause inquiry looks into the relation and the line of causation between the conduct of the defendant and the injury caused to the plaintiff. If what is being alleged by the plaintiff is too far fetched to be attributed to a conduct of the defendant, or a manufacturing clause in the product of the defendant , then the defendant would not be held liable. The foreseeability of the harm caused is often looked into. In the liebeck’s case the attorneys were able to prove concretely before the court that the coffee was defective because it was too hot and established proximate cause that the burns were a proximate cause of the alleged defects – the coffee being served hot. Liebeck also proved foreseeability by asserting the previous 700 cases that Mc Donalds had overlooked .


TORT REFORM CONTROVERSY AND ALTERNATIVE PROPOSALS

At the core of the tort reform controversy in the U.S lies the perceived concept of excesses – that the U.S punitive damages system followed. There is a perceived and widespread notion aggravated by the hot coffee case – although many of the cases are genuine, but still, there is a growing coalition of scholars lobbyists and even advocates at some instances reacting to the seemingly skyrocketing rewards and hence the demand for tort reforms arose.


On the other hand, these tort reforms tend to seriously cut down on the rights of the citizens to approach the court and infringes upon the “ protectionist “ nature of torts. Tort reform efforts have allowed big corporations to multiply their profits on the cost of injured persons . there might be a possibility that corporations will not devote as many resources to the prevention of injuries and safety measures and would just tend to overlook consumer safety and precaution because it is cheaper for corporations to be less cognizant of safety .[xxiii]


However there can be a third compromissory way out- since both the sides have their own merits and countries have seen some cases of frivolous lawsuits as well, it would be a good suggestion that while a part of the tort reforms might be beneficial , the present ideas of tort reforms are ill conceived and a reasonable compromise would be a better idea. Some of the possible middleground solutions to this controversy and the game of pull the rope- between the corporations and the people can be to -

1. To eliminate the punitive damages

2. Elimination of the joint and several liability

3. Requiring intentional misconduct and not mere recklessness

4. Statutory caps on punitive damages

5. Increasing the burden of proof on the plaintiff.


INDIAN PERSPECTIVE

In India , as a recipient of a deceptive good or service, or as a person damaged due to reckless behaviour of a corporation, consumer may take action under a variety of laws, including the tort law, but the most effective remedy is under the consumer protection act . A suit in India, adjudicated by a civil court is much more time taking and expensive than if it is a consumer matter. It is unlikely that the case of the hot coffee as was discussed above would have reached the same conclusion in India , because punitive damages, may make headlines the every other day in countries like America, but in India and in UK , they are usually reserved for cases which are extreme and have caused disproportionate harms. This does not mean that the concept of punitive damages in India is unheard of , but at the same time its an exception rather than a rule and the amount which is awarded is rarely large when looked at from an absolute term perspective. For example, In the case of Indu Sharma vs Apollohospital [xxiv], punitive damages of only 10 lakhs were awarded for professional misconduct which included tampering medical records. While there is no formal cap on the amount of punitive damages to be awarded in the country, but the damages which are awarded are generally compensatory in nature and there is no hard and fast rule for universal application.


CONCLUSION

The case since then has remained a matter of speculation and public outbreak about frivolous American lawsuits. Most of the outrage - highly misdirected. A billion dollar organisation , and its ability to control the image of the case in people’s minds is alarming and the company along with the conservative lawmakers , accepting huge sum of money from those corporations induced and set the wheel for sweeping law reforms in the American law of torts The case of Stella Liebeck, it is widely perceived was wrong and was a moving wheel in the whole controversy which emerged out of the sum of the money advanced towards her, in the project we aimed to look at the facts critically and concluded that the tort reforms, while they may seem reasonable at some points, will end up curbing the citizens right to move to the courts against powerful players in the market. That the ongoing movement for the tort reforms should lead to some middle ground solutions and pave the way for eliminating frivolous lawsuits, at the same time taking into account those of them which are genuine. the misinformation campaign spread by the companies in this particular case should be accounted for. Undoubtedly, corporate America's version of the McDonald's Hot Coffee case has negatively affected how people view consumer lawsuits in the United States and abroad.

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