McDonald's Hot Coffee and How it Damaged Us All

 

This case is different than any I have done so far, but will not likely be the last of its kind that you will see here. This is a civil case, not a criminal case, and does not involve a murder. Civil cases are much different, and have different rules than criminal cases. Most will tell you that the biggest thing is the standard used to find a “defendant,” more commonly called a respondent in civil cases, guilty or responsible. In criminal cases it is “beyond a reasonable doubt” while in civil cases it is a “preponderance of the evidence.” This is important because criminal cases generally involve taking the freedom of someone. In civil cases it is generally about punishing someone financially. Another big difference between the two types of courts is that when all is said and done in civil courts a percentage of responsibility is often allotted to all of the parties involved and that can include the person who brought the lawsuit.

This case is not only about hot coffee but it is a “hot” case for me. It is one that makes my blood boil, almost as hot as McDonald's coffee. I am not mad about the case or the settlement; I am mad at how the media portrayed the case; I am mad that politicians and the media together used it to convince people there should be “tort reform” and put caps on what juries can award; I am mad that to this day, nearly thirty years later, people still bring up this case and spew the lies.

If you do a Google search on this case nearly every single site will tell you that this case was touted as frivolous and that idea is often still spread among the uneducated. Those same sites tell you that the idea of this being a frivolous lawsuit could be nothing further from the truth. But, there still always seems to be someone who will bring this case up and talk about how the “stupid old lady got rich.” Because this idea is often expressed, thankfully less now than in the beginning, I am going to first give a version that people did, and sometime still do, believe happened. I will then break it apart and tell the real story.

The short, simple, and wrong version of the story goes like this....

An elderly lady was driving her car and had gotten coffee at a drive thru at McDonald's. She put the coffee between her legs, drove away and it spilled in her lap. She got burned. She sued McDonald's and the “dumb” people on the jury gave her millions of dollars.

Common arguments from these people who repeat the above story are that she was stupid for driving with the coffee between her legs because a) she should have put the coffee in the cup holders and b) “everyone knows” coffee is hot. These same people claim the woman was greedy and was playing her injuries to get a “payday.”

Much of this narrative came from the media and those politically motivated to push for “tort reform.” A tort is a legal term that refers to “an act or an omission that gives rise to injury or harm to another.” The largest cases involve large corporations and companies, such as here in McDonald's. Media companies, as well as politicians, benefited from large corporations. Many would give large sums of money to politicians and in return they expected some sort of return or protection. Large verdicts given out in court could hurt the companies and in turn help the politicians. After the McDonald's Hot Coffee verdict and the narrative that was released that it was a frivolous lawsuit the lobbyists pushing for tort reform had the platform they wanted. We will get into this a little later so for now let's look at the real story.

On February 27, 1992 seventy-nine year old Stella Liebeck was with her grandson, who was driving, and they went through McDonald's drive thru in Albuquerque New Mexico. Stella ordered a cup of coffee. She held onto the cup while her grandson pulled into a parking spot considering that his car, a Toyota, did not have cup holders. When they came to a stop Stella put the cup between her legs to take off the lid to add her cream and sugar. As she did so, the cup lid was not completely stable and the entire cup emptied onto her lap. She was wearing cotton sweatpants that in turn absorbed the coffee and held it against her skin.

Stella went into shock and she was taken to the emergency room. She spent the next eight days in the hospital. She had third degree burns over 6% of her body, mainly concentrated on her thigh and groin area. She also had burns at a lesser degree over 16%. She was required to have skin grafts, was permanently disfigured, was under medical treatment for the incident for two years and remained in pain until her death in 2004.

She initially reached out to McDonald's asking for $20,000. This was to cover her current and projected medical bills and the loss of income her daughter suffered having to care for her. McDonald's refused and offered $800 but refused to budge more than that. Stella then reached out to an attorney who attempted to settle with them a few times before they filed a law suit against the company. The attorney alleged that McDonald's had been grossly negligent in their care. Gross negligence is also another legal term. In layman terms it means that someone has done, or not done something, in a reckless manner with blatant disregard for the consequences to another.

Many in the general public blame the judge for allowing the case to go forward at all. As I have stated many times, many believe, or were later led to believe that this was a frivolous lawsuit. In fact, many cases such as this have been filed over the years and most are dismissed by the judge.

To prepare for the case many depositions were taken. A deposition is a statement that while outside of court is taken under oath. A deposition can be video taped or transcribed and later used in court. Much of the time the party will be called to the stand in court to testify and the deposition only used if their new testimony is different than they are now testifying. The position the attorney's for Stella took was that not only was the coffee at McDonald's brewed at a dangerously high temperature, but that McDonald's had known this for years, had even paid out damages to others, and still failed to do anything about it.

The trial began on August 8, 1994. To be fair, in all of my research it seems that McDonald's, through their representatives, not only did not really have a defense, but had no answers to questions posed to them. Some of the things they did claim through their defense were even later proven not to be true, or appeared to be nothing more than a way to save money. The long and short of it is that really the only reason McDonald's would not settle, is because they simply did not want to settle for more than they wanted. It is reasonable to believe that they never imagined the case would go to court and they knew they had other corporations as well as likely the media and politicians behind them. In many ways, despite the verdict, they were correct. Despite the fact that they lost in court, they are often portrayed as the victim in this case. McDonald's would later say that the case “was a fluke” and that they lost “due to poor communication and strategy by an unfamiliar insurer representing the franchise.”

I suspect this “unfamiliar insurer” was either their way of saying their attorney did not prepare witnesses, or they were speaking of their own quality control manager, Christopher Appleton. To be fair, Appleton did probably the most damage to McDonald's in this case but in reality it appears that he was simply being honest. That is not to mean that Appleton necessarily came off as a good guy when it came to Stella's side either. I suspect that he was abhorred by both sides. McDonald's did not like him because he was honest and Stella's side, and ultimately the jury, did not like him because while he was honest, he was also seemingly uncaring and not remorseful. In essence he was the definition of “gross negligence” and because he worked for McDonald's it reflected on them. Whether those high up in McDonald's knew, or even agreed with Appleton and his knowledge and practices is really moot because they had apparently left him in charge. Their choices became to either agree with his practices and argue they were legitimate or basically admit they had someone in charge of things, knew nothing and allowed these practices to harm consumers, knowing they would be the ones held responsible.

So, what did Appleton say or do that was so bad? It had been discovered that between 1982-1992 there had been over 700 incidents reported of people who had received varying degrees of burns. The perception at the time of the lawsuit indicated that all of these burns were incurred by their coffee, and that may be true but I should point out that there have been other incidents about burn risks in some of their other products. In fact, although I am honest to say I do not know the details of the case at this time in July of 2023 a family was awarded $800,000 in a civil case in Florida after their then four year old was burned by a chicken nugget from McDonald's. It was also discovered that McDonald's had settled claims totaling more than $500,000 by the time of Stella's lawsuit. When told of these numbers Appleton said he was proud that the number was not not higher and he expected it would have been. Whether he knew the actual number, he had been aware of the issue but said that it was not enough to re-evaluate their practices regarding the temperature of their coffee. He claimed he had more “pressing matters” to deal with than people being burned by coffee. He also stated that he was aware of the fact that the coffee was brewed at a temperature that if the consumer drank it immediately they would, not could, burn their mouth and throat and that they should not even consider doing so.

Let's talk about coffee. It is supposed to be hot, right? Well, unless you want a cold coffee that is. But, just how hot is too hot and what is the duty of a corporation to inform their consumers. For the most part McDonald's just relied on the fact that consumers know coffee is intended to be hot and put a very small disclaimer on their not very insulated (at the time) cups that simply said “Contents: Hot.” At home, the average coffeemaker brews coffee at between 135 and 150 degrees. I say the average because I can say that one in particular, the Bunn, apparently does brew at a much higher temperature. There was a lawsuit against them that was dismissed that said their temperature was about 179 degrees but I did a search that says that it maintains a water temperature of 200 degrees. But, I would not consider the Bunn an average coffeemaker for the drinker at home. In fact these coffeemakers are often found in commercial establishments. At the time of this lawsuit the average commercial coffee was held between 150 and 160 degrees, so just slightly warmer. McDonald's maintained their coffee to brew at between 180 and 190 degrees, some 30-40 degrees higher than the at home maker.

Two claims were made about why McDonald's maintained their coffee at such a degree of temperature. First, they indicated that drive thru coffee was held at a higher temperature (although there seemed to be no proof of this) because they had done research that those who obtained coffee through a drive thru wanted the coffee to remain hot to drink after their commute to wherever it was they were going. This was debunked when it was discovered that through their own research consumers had said they bought coffee on the way to their commute to consume on the way. Keep in mind that McDonald's eventually admitted that their coffee was “not fit for consumption when sold.” There was a second claim on why the coffee was maintained at this higher temperature but I want to say that I only saw that it was “revealed at trial” so I cannot say that this was not a claim from Stella's attorney's, that ultimately made sense, or if someone from McDonald's actually made this admission. The claim was that the longer the coffee stayed hot the less that the consumer would drink and considering they offered free refills, less of those were provided and in the long term saved them money.

Now let's talk about hot water and what it can do. Stella's attorney's were able to provide evidence that coffee served at the temperature in which McDonald's maintained, was just under the temperature of boiling water at 212 degrees. They provided evidence through doctors that at a temperature of 190 degrees severe burning can begin in three seconds; at 180 degrees it begins at fifteen seconds; at 160 degrees, twenty seconds. I will be fair in saying that it appears that over the years these numbers have changed and it is said that it can take much shorter times, to instantly. But, the argument in 1994 was that twenty seconds was much lower than three to obtain something to wipe the hot liquid off one's body. Now, there are some who would say, and be right, that probably would not have been enough time for Stella considering her clothing and probably her age and ability to move faster, but then if that was the case I do not think we would have seen this case go to trial.

Whether you believe the case was frivolous or had merit we all know that the jury ruled against McDonald's. What most do not know is exactly why they ruled against them and how they came up with the amount they felt, not necessarily that Stella was due, but that would be a punishment to McDonald's. So, let's start with why they ruled the way they did. We have already talked about what was revealed at the trial as far as what McDonald's knew and what they did or did not do about it. The jury felt that first, McDonald's had not adequately warned the consumer, just how hot their coffee was and the warning on their cups was too simplified to express this. It is unclear whether there was talk about whether the cups and lids themselves were sufficient but it is said that McDonald's does use a more durable cup today. They also came to feel that they had not taken the claims prior to this case seriously and had reduced their customer's to a number rather than acknowledge these were actual people behind those numbers who had been harmed. In essence they had weighed their profits against consumer harm.

In civil court, as I pointed out earlier, it is often about finances and punishment. There are two different kinds of “damages” that can be awarded. They are compensatory and punitive. Compensatory damages are things like medical bills, loss of income and pain and suffering. Punitive damages are meant to in essence be a lesson and encourage change. In their closing arguments Stella's attorney's talked about punitive damages. What could the jury to to this global company to send a signal or “hurt” them only enough to send a lesson. The attorney's pointed out that in coffee sales alone McDonald's made $1.3 million A DAY. They suggested that punitive damages should be twice that. Remember that is just in coffee sales only. The jury also had to decide if Stella was also at fault, something she never failed to acknowledge, and if so at what percentage. That amount would come off of the compensatory damages, not the punitive because that is solely against the company. In the end the jury accessed Stella's responsibility at 20% with 80% going to McDonald's.

The initial jury award was $200,000 for compensatory damages, but taking her 20% off of that it came to $160,000. They then took the attorney's suggestion and awarded Stella, or punished McDonald's depending on how you looked at it, $2.7 million, the two full days of coffee sales. Before they ever left the courtroom the judge had already lowered the punitive to $640,000. It was said that it was three times the compensatory damages but that is not exactly true so to be fair I am unsure how, where or why the judge came to that amount.

Both parties planned to appeal. Stella's side planned to appeal the punitive damages that the judge had lowered and of course McDonald's planned to appeal the entire case. Before an appeal could be decided the parties agreed to an “undisclosed settlement.” It has been rumored that it was less than $500,000 but no one apparently has said for certain. Stella's daughter would later say that it basically paid for her live in nurse until her death.

So, why did they settle? Appeals are notoriously expensive. Presumably Stella did not have to pay for her attorney unless or until she won her case and it was likely based on a percentage. That being said, an appeal would have been more work for the attorney's and they would not know if they would win again. A settlement ensured that their client got something. For McDonald's, they had already paid their attorney's for one trial, and were going to have to pay again for an appeal. Win or lose they were losing money. Oftentimes parties will consider many things including time, costs and resources against what it would cost to do a settlement and financially the settlement makes more sense. For Stella remember she had only asked for $20,000 in the beginning to cover her medical bills and a few other things. Of course her attorney's would have gotten some of her settlement but she still came out with much more than what she had asked for. We also have to remember that after the verdict, this case took on a life of its own.

It was after the verdict that the media really got a hold of the case and while the judge had already significantly reduced the amount before they ever left the courtroom, the $2.7 million awarded to an elderly woman who spit hot coffee on herself was much more dramatic and sensational. Stella became a laughing stock and it was being touted as not only a ridiculous lawsuit but an even more ridiculous verdict. It became the case to jump start tort reform. Consumers and the general public were expected to be outraged at this verdict and the award. In my opinion while a few things have changed for the better, the reputation this lawsuit got made things a whole lot worse.

There are conflicting reports as to whether McDonald's changed the temperature of their coffee. They have changed their warning on their cups to be more visible and accurate and as I stated earlier the type of cups used have changed. I am sure at some level this award scared some corporations to change some things even if they would not have admitted them publicly. Today, whether we agree or not, corporations have to be more mindful in how they treat employees and consumers. While I am sure that they are still weighing damages and payouts compared to other costs, they need to do so more carefully in my opinion. This is more widely seen in the auto industry. There have been lawsuits about companies that knew there was a defect but weighed the cost of recalls and repairs against paying out for injuries and deaths. Things like these have helped strengthened consumer laws. But, the other side of that was tort reform.

Many believed that the $2.7 million punitive damages awarded in the McDonald's case was “excessive.” Let's be fair though, many believed it was excessive because someone told them that it was, not because they knew the facts of the case. So when politicians and lobbyists told them that something had to be done about frivolous lawsuits and excessive payouts they believed them. Many believed that their own livelihoods could be affected. If someone sued the company they themselves worked for in one of these frivolous lawsuits and won, they could lose their job if the company could not stay afloat. So people got behind the people that were trying touting that they were trying to make it so that did not happen. By putting a cap on how much someone could recover legally this would save us all!

What a lot of these people who were backing all of this forgot was that tort reform was including a LOT of areas. It would include work injuries, personal liability injuries.... anything that could not just punish a company as we say to teach a lesson, but also prevent people from possibly even recovering their own financial losses from someone's neglect through compensatory damages. Forget about pain and suffering, what about medical bills and loss of income? They were in essence giving companies and corporations less incentive to do right by people. They knew whatever they did they could only be sued for X amount of money depending on the laws in the state involved. In addition to all of that the individuals were still going to have to pay their attorney fees out of whatever they received so that was even less to them. It has never been a secret that large corporations have few issues in paying their attorney's who are often full time on their payroll.

By the time some of these people figured it out, if they ever did, it was too late. The laws had changed around the country. I saw a documentary not long ago that talked about this period of time and tort reform. I will not pretend to remember what it was or all of the details but there was a man from my state of Indiana interviewed. He had been very much involved in helping put a cap on what someone could recover in lawsuits here in the state. Then he was injured and permanently disabled. I do not recall the exact circumstances involved in his injury but here he was years after pushing for tort reform being told that the cap on his lawsuit would not even cover his medical bills, let alone anything else.

And all of this was pushed along because McDonald's was being forced to pay two days worth of coffee sales only. Think about that. The idea of punitive damages, as I have said over and over, was to teach the losing party a lesson and hope that it was enough to change their ways to make the consumer/employee safer. Two days of coffee sales, while significant was not excessive, nor did it probably do anything more than make the CEO get less of a bonus that year. That $2.7 million could have been recovered easily. But, this country is run by big businesses and corporations and if you do not believe that you are likely part of the problem. CEO's give to politicians and their campaigns and they expect things in return and the biggest thing they expect is some sort of protection. Not protection in the form of saving their lives but in saving their livelihoods!