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Hot Coffee

We’ve all heard about the McDonalds hot coffee case: a woman spilled a cup of hot coffee on herself, sued McDonalds, and won millions of dollars. A perfect example of how out of whack our civil justice system is. Or is it?

A few weeks ago, my wife and I finally got a chance to watch “Hot Coffee: Is Justice Being Served?”, a great documentary about the other side of “tort reform”.

The film, which takes its name from the famous McDonalds coffee verdict, opens by flipping on its head what we think we know about the case.

For starters, did you know that the 79-year-old plaintiff, Stella Liebeck, suffered third degree burns on her groin, buttocks, and thighs; was in the hospital for eight days during which her weight plummeted to a frail 83 lbs; and underwent skin grafting and two years of follow up treatment? (See the wikipedia page for more details).

The pictures of Ms. Liebeck’s injuries are terrible. You can find a few of them here, if you’ve got the stomach for it.

Ms. Liebeck’s injuries led to over $10,000 in medical bills. Yet, before the jury verdict, McDonalds had offered only $800 to settle the case. And McDonalds had received hundreds of coffee burn claims before Ms. Liebeck’s, some with burns as bad as hers. Most were settled. It’s not entirely clear why McDonalds drew a line in the sand with Ms. Liebeck’s case.

The jury heard almost two weeks of evidence and returned a verdict in Ms. Liebeck’s favor – $160,000 to compensate her for her injuries and $2.7 million (two days of McDonalds’ coffee sales) to punish McDonalds for its total indifference to consumer safety. The judge then reduced the $2.7 million punitive award to $480,000 and both sides appealed. McDonalds later settled for an undisclosed amount (less than $600,000) before any arguments on appeal.

So, the truth: an elderly woman was severely burned by a hot cup of coffee, asked McDonalds to pay for her medical bills, and McDonalds told her to pound sand. Then, an outraged jury delivered a verdict designed to send a message to the billion dollar company.

These facts, in light of what’s been widely reported about the case, are impressive to say the least. My wife hit the nail on the head when we talked about the movie afterwards: our country has a major PR problem. So much money has been spent over the past few decades towards changing public perceptions and curbing consumers’ access to the courts that people have begun to accept the spin as undisputed fact. When it comes to “tort reform,” the impact of these myths-turned-facts always favors major corporate interests to the great disfavor of everyday people like you and me.

The trial lawyers organization, AAJ, has a list on their website that they call “Debunking Myths” where they go through some of the most common talking points we’ve heard so often that they’re accepted as fact.

A couple of my favorites are:

• Personal Injury lawsuits have skyrocketed. We’ve heard that so many times, you’d probably sooner debate whether or not water is wet. Well, in fact, that’s not true at all. The number of personal injury suits filed has been declining for years.
• My insurance rates are going through the roof because of lawsuits. Nope. What’s going through the roof, courtesy of this myth, is insurance companies’ profit margins, which in 2007 were a reported $61.9 billion. That’s billion, with a B.

It bears considering when you hear the calls for “tort reform”: who stands to benefit?

When a child needs a lifetime of around-the-clock medical care after a doctor’s mistake and a jury enters an award to accommodate for that but the award is capped at a few hundred thousand dollars, who ends up picking up the tab?

*Spoiler Alert*

Medicaid/Medicare = taxpayers = You.

Meanwhile, the insurance company cashes another exorbitant medical malpractice premium check.