Jun 30, 2011 3
‘Hot Coffee’ puts America in hot water
Just so we’re clear, I like the courtroom. I like juries, even when they don’t vote my way. I like the Founders’ idea that we should have regular people from the community come and decide disputes between people. I think juries overwhelmingly get it right.
I’m also against damage caps in civil lawsuits. Juries were given the power to decide issues of fact in the courtroom, and most states have taken that right away to some degree. The majority have caps on punitive damages, many have caps on non-economic damages and a select few have a cap on all damages. This means that those courts put a ceiling on the amount of money a plaintiff is reimbursed for a harm caused by another.
HBO aired a documentary Monday that is getting a lot of press. Hot Coffee is the story of Stella Liebeck, the woman who spilled McDonald’s coffee on her lap. The documentary talks about some of the public’s misconceptions about that case. But these are the facts:
- Stella did not have trival burns, but serious burns requiring skin grafts and over $10,000 in medical expenses
- Stella was not driving the car when she was burned – she was in the passenger seat, the car was stopped and she was attempting to put in cream and sugar when the coffee spilled
- McDonald’s initially offered her only $800 for her medical expenses
- The jury did not solely blame McDonald’s, but observed that Stella was 20 percent at fault for her own injury. The other 80% was attributed to McDonald’s (side note – here in Maryland, Stella would have been prevented from recovering any money given that apportionment of fault, a topic for another day)
- When assessing damages in the case, the jury considered evidence showing that McDonald’s had a long history of complaints involving coffee burns (over 700), and didn’t seem to care one bit about it
- Stella was awarded awarded at $160,000 in compensatory damages and $2.7 million in punitive damages
- The jury came up with the punitive damages number because it equaled two days of coffee sales at McDonald’s
- The judge in the case reduced the punitive damage award to $480,000. He agreed with the jury that McDonald’s acted with “willful, wanton and reckless behavior”
- The case was later settled for an undisclosed amount, presumably to avoid the necessity of appeal
- The temperature of the coffee that burned Stella was 180 to 190 degrees (fun science fact – water boils at 212 degrees)
The documentary was not limited to this one case, however. It paints the picture of the civil justice system with a broad brush, discussing damage caps, judicial elections, marketing of “tort reform,” and other topics.
One thread throughout the film was that businesses use marketing and lobbying efforts to secure caps on damages. One advertising slogan used after Stella’s case was something to the effect of, “Taxpayers don’t need another million-dollar cup of coffee.” The idea is that taxpayers pay for lawsuits like this with increased cost of products.
The film pointed out, however, that damage caps hurt taxpayers in other ways. A child harmed by medical malpractice was featured. The jury awarded $5.6 million in damages, but state law reduced the entire verdict to $1.25 million. Case expenses were paid, leaving the boy with a few hundred thousand dollars.
The parents were extremely concerned about what would happen to the boy when they died. With the $5.6 million they would have been able to secure his medical and other care for the rest of his life, all paid by the negligent doctor (or, more likely, her insurance company). But now, the boy receives most of his medical care through state funding (paid by taxpayers). And when his parents die, he will probably have to be institutionalized (at taxpayer expense).
Is that better than making the negligent party pay for it? This is a boy who needs constant care, will never have a job, and will never have a family of his own. We’re paying for him now, and we’ll really be paying for him in the future.
There is no lack of opinions about tort reform and lawsuits. We all have them, and all of us have some rationally-held beliefs and some irrationally-held beliefs. “Hot Coffee” gives another perspective, along with some facts to help us in forming or reforming our stances.

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