Why You Should be Able to Sue McDonald's if You Spill Coffee on Yourself

If you talk about lawsuits today, some people will tell you that a lot of them are frivolous. There are a few famous cases that you might have heard about in which people sued a business for something that can usually only be described as resulting from their own stupidity.

For example, in 1992 Stella Liebeck became the poster child of "frivolous" lawsuits when she sued McDonald's after spilling hot coffee on herself while in a car after stopping at a McDonald's drive-through.

The Myth

Stella ordered her 49 cent coffee knowing that it was incredibly hot. She chose to attempt to drive while holding her coffee in the front seat. Stella clumsily spilled the coffee in her lap while driving  and slightly burned herself. Angry at her own stupidity, she turned against a big corporation for revenge. Stella received a final judgment for her trouble, and the burn from McDonald's coffee was an unprecedented occurrence.

The Reality

Stella was 79 years. She was a passenger in her grandson's vehicle. She ordered a 49 cent  coffee at the McDonal''s drive through, and was attempting to open the coffee to add cream and sugar while the car was not moving, when the cap popped off, spilling coffee in her lap. Because the coffee was heated to between 180-190 degrees fahrenheit, and because she was wearing sweatpants which absorbed the coffee and held it next to her skin, Stella received third degree burns on her inner thighs, perineum, buttocks, genital, and groin areas. These injuries resulted in eight days of hospitalization during which she received skin grafting for her burns. Stella was left scarred and disabled for more than a year.

What most stories about the incident also omit is that McDonald's  had been purposefully heating its coffee almost 30 degree above the temperature at which it may create third degree burns (either to sell cheaper coffee by conceling its low quality or to bring out the taste - depending on who you ask).

Stella's initial compensatory judgment of 200,000 was reduced to 160,000 and the punitive damages of 2.7 million were reduced to 480,000. Part of why the decision was so high was because McDonald's made 1.35 million in daily coffee sales at the time of the incident. Despite the fact that any human skin that came into contact with coffee heated to 180 degrees would create third degree burns in 2-7 seconds (the skin is burned away down to the muscle), and that McDonald's required that its coffee be held at between 180-190 degrees for serving, the jury assigned 20% of the blame for the injury to Stella for spilling the coffee and reduced her judgment accordingly.

McDonald's had previously settled similar cases amounting to more than $500,000 in compensation before Stella's case. Seven hundred people had previously reported being burned by McDonald's coffee.

Although the jury initially awarded a sizable reward, and the judge subsequently reduced this award, Stella had initially offered to settle for $20,000 before the trial but McDonald's had refused. The case was ultimately settled between Stella and the corporation for an undisclosed amount.

There will sometimes be frivolous lawsuits

There will sometimes be frivolous defenses to lawsuits.

What's most important is to know that not all of the urban legal mythologies used to attack the civil justice system are true.

You should be able to buy coffee without having it horribly disfigure you if you trip. People trip all the time. People spill all the time. Eventually, it will happen to everybody. When coffee is served at a temperature at which it will always melt human skin, you should be able to sue the person or corporation responsible - even if you were an idiot for spilling it on yourself. It is clear that one day, we will all have our turn being that idiot.

Of course, the moral of the story is to always question what you hear. When people have an agenda, whatever that agenda is, they are willing to bend the truth. Indeed, it should give everybody who has invoked the image of this case as a symbol of an out of control civil justice system a moment of pause to see how drastically some were willing to twist the truth to attempt to push their side of the issue.

So - keep suing McDonald's - even if you're a clumsy oaf (in which case your reward will be reduced accordingly) - unless and until McDonald's makes the temperature of its coffee at least a little less than the temperature at which it melts human skin.

That function is what our civil justice system is here for, to hold corporations accountable for their unsafe products.

For More Resources Debunking This Legal Myth

Public Citizen
Center for Justice and Democracy
Center for Economic and Policy Research
Association of Trial Lawyers of America

For a representative argument that this was a frivolous lawsuit click here.

If you or your organization is interested in learning more about or working on these types of civil justice issues, please feel free to contact me at cdugger@drummajorinstitute.org.

Cyrus Dugger
Senior Fellow in Civil Justice
Drum Major Institute for Public Policy

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NY Auto Insurance Nightmare Continues: The Option of Indefinite Denial & Your Med. Insurance

Did you know that in NY, if you are involved in an accident you are legally prohibited from making a claim against your medical insurer until your no-fault auto insurer pays or denies your claim? And it gets worse: there's no telling how long this may take.

It's true. Until your NY auto insurance company decides one way or another about your claim, your medical insurer can legally refuse payment for the amount covered by your no-fault insurance. Usually NY auto insurers have about thirty days to pay or deny a claim, and are assessed some penalties if they exceed this amount of time. If you are caught in this situation, your only option seems to be to take your auto insurance company to arbitration. However, arbitration is unlikely to be helpful when the problem is not an outright denial, but a refusal to pay or deny. Auto insurance companies are able to legally refuse to pay or deny as long as they are investigating your claim (at least as long as they mention so in their contract). Hypothetically, your no-fault auto insurance carrier can simply refuse to deny or pay your claim for any number of months during which you both receive no benefits from them, and are prohibited from making claims against your medical insurer.

How do you pay your medical bills during this "in-between" time? Nobody knows. I spent about an hour calling New York State's Insurance Department and spoke with three different staff members in three different sub-departments. After all of these conversations nobody there could tell me of any way for a person in this "in-between" situation to get their medical bills paid. The consensus answer was that this "in-between" issue would "never happen," and that I should "not worry about it." The best advice was to just call them if it did happen (at which point I would have been without bill payment for at least a month). Sadly, nobody could tell me whether or not it was legal for this to happen. Finally, I called the agency's legal counsel directly, and was told to put my question in writing and to expect an answer in approximately three weeks (during which time I would still be without medical coverage).

A new bill proposed by Assemblyman Heastie will make this a much larger problem than it already is. Heastie's bill substantially reduces the penalty insurance companies face when they exceed the standard 30-day time limit to pay or deny. The bill proposes to no longer prohibit auto insurance companies from raising defenses to claims if they take longer than the allowed 30 days to pay or deny. This reduced penalty will often make not paying or denying claims for extended periods of time a very rational business choice for auto insurance companies.

Think about what happens.

Most claimants do not have the financial resources for a protracted litigation, and many may simply give up their fight if the insurance company waits long enough without paying or denying.

Even if they don't give up, and they ultimately win in court, the very best that they can get in compensation is the value of their original claim + 2% per month + 20% of their original claim. Of course this 20% is meant to cover reasonable attorney fees, leaving the claimant with only what they were rightfully already owed --- plus 2% monthly. For example, if your claim had originally been for $7,800 dollars, you will end up with what you were already owed and a check for $156. Of course this also assumes that your attorney fees consisted of only $1560.

If this new bill passes you very well may find yourself "in-between" your no-fault auto insurer, your medical insurer, and a very hard place in which nobody is legally obligated to pay for your medical expenses.

All the while, you will still be expected to pay both your auto and medical insurance premiums - on time - of course.

To see the previous posting on this issue click here.

If you or your organization is interested in learning more about or working on these types of civil justice issues, please feel free to contact me at cdugger@drummajorinstitute.org.

Cyrus Dugger
Senior Fellow in Civil Justice
Drum Major Institute for Public Policy

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The Option of Indefinite Denial: NYS Legis. Considers Auto Insurance Nightmare

Have you ever been in an accident? Have you ever had to go through the process of filing a claim with your auto insurance company? For any who have had their claims challenged they know that the deck is stacked against them. Insurance companies may require that claimants fill out additional forms, submit to "independent" medical examinations, and/or report to make statements under oath. Given the procedural hurdles a claimant must go through and the insurance company's ability to deny and then endlessly litigate claims, the average New York resident faces an uphill battle.

State Assemblyman Heastie has recently proposed a bill (A.8267) that would make life even easier for auto insurance companies (note that although the most recent legislative session ended the bill will likley be re-submitted as is). The bill proposes to allow insurance companies to disregard the current 30 day time limit they have to either pay or deny claims and extend it indefinitely with the caveat that the insurance company pay 2% interest a month on the claim and pay reasonable attorneys' fees once the claim is ultimately found to be valid. This measure applies across the board to all claimants that the insurance company decides to investigate for fraud. In theory, auto insurance companies would be able to indefinitely withhold benefits from all claimants in New York as long as they eventually paid 2% interest and reasonable attorneys' fees.

This law would mean that a person with a valid auto insurance claim who is incorrectly flagged and investigated as having filed a fraudulent claim may receive no payments for an indefinite period of time during which they receive nothing for their medical costs and lost wages.

Not only is this rule unfair in that it makes people wait needlessly for the valid claim that they are owed after paying their insurance premiums for years, it also assumes that a claimant can actually pay out of pocket lawyers' fees in the first place (plus their medical bills if they are uninsured), let alone that they can wait to be reimbursed for them at some unknown point in the future. This framework also creates an ironic situation in which claimants must continue to pay their premiums while their insurance company withholds the very benefits of their insurance policy from them.

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The Tort Liability Index: Why You Should Feel Free to Ignore It

The Pacific Research Institute recently published a report titled "Tort Liability Index: 2006." This report purports to show that "a poor civil-justice system lowers the standard of living for ordinary citizens" and that "meaningful legal reform on the other hand pays dividends in the form of stronger economic growth and higher personal income."

"A poor civil-justice system lowers the standard of living for ordinary citizens?"

Last time I checked, not so many middle and working class families are talking about how they are really scared of being sued in the civil justice system if an SUV they manufactured in their kitchen rolls over and kills a family of five.

"Meaningful legal reform on the other hand, pays dividends in the form of stronger economic growth and higher personal income?"

Although a dubious assertion without methodologically rigorous support, assume, for the sake of argument, that this statement is true.

The issue then becomes: even if a non-existent or severely weakened civil justice system would make economic growth soar, would you want to live in such a world?

Even if business boomed around you, would you want to live in a world in which you could do nothing if a corporation's negligence, disregard, or indifference damaged human life as part of their business plan?

In a world without the civil justice system, we are left with only highly understaffed administrative agencies to regulate corporations. Some people are left with no protection at all. Indeed, this culture of corporations unregulated is likely all too familiar to many living in the developing world. I wonder if the authors have recently passed through many developing nations and observed their standards of living?

The most "flashy" statement the report makes is that:

"The President's Council of Economic Advisers estimated that the nationwide excessive costs of the tort system were $136 billion in 2000 - the equivalent of more than three months of groceries, six months of utilities, or eight months of health-care costs for the average family."

Where would such a statistic so damning to our civil justice system come from? What is the President's Council of Economic Advisers? This Council is:

"[C]omposed of three members who shall be appointed by the President, by and with the advice and consent of the Senate and...each of whom shall be a person who, as a result of his training, experience, and attainments, is exceptionally qualified to analyze and interpret economic developments, to appraise programs and activities of the Government...and to formulate and recommend national economic policy to promote employment, production, and purchasing power under free competitive enterprise."

What more reputable body could one cite for information about our national economy?

Unfortunately, it appears...just about any. The Council relied heavily on a report done by Tillinghast-Towers Perrin. And who is Tillinghast-Towers Perrin you may ask? Their self-description states that:

"The Tillinghast business of Towers Perrin provides consulting and software solutions to insurance and financial services companies and advises other organizations on risk financing and self-insurance."

This is a company that focuses on helping insurance companies make money.

The enormous flaws of the Tillinghast study are described in detail in a report by the Economic Policy Institute.  Most discrediting, as found by the Institute:

"Although TTP's estimate is widely cited by journalists, politicians, and business lobbyists, it is impossible to know what the company is actually measuring in its calculation of tort costs, and impossible to verify its figures, because TTP will not share its data or its methodology, which it claims are 'proprietary.'

Indeed, Tillingahst has even  admitted that "the costs tabulated in this study are not a reflection of litigated
claims or of the legal system." (U.S. Tort Costs: 2004 Update, at 4).

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