Legal Myths: The McDonald's "Hot Coffee" Case
In 1992 Stella Liebeck, a 79-year old retired sales clerk, bought a 49-cent cup of coffee from a
drive-through McDonald’s in Albuquerque, New Mexico. She was in the passenger seat of a car
driven by her grandson. Ms. Liebeck placed the cup between her legs and removed the lid to add
cream and sugar when the hot coffee spilled out on her lap causing third-degree burns on her
groin, inner thighs and buttocks.
This infamous case[1]has become a leading rallying point for those advocating restrictions on the
ability of consumers to use the U.S. civil justice system to hold corporations accountable for the
injuries they cause. A New Mexico jury awarded Ms. Liebeck $160,000 in compensatory damages
and $2.7 million in punitive damages and, in an instant, the media and legal communities were
up in arms. Newspaper headlines such as “Hot cup of coffee costs $2.9 million,”[2]or “Coffee
Spill Burns Woman; Jury Awards $2.9 Million”[3]painted the picture of a “runaway jury,” an
unreasonable award and a perverted system of justice. However, both the media and those who
want to take away consumers’ legal rights conveniently overlooked the facts of the case, creating
a “legal myth,” a poster-case for corporate entities with a vested interest in limiting the legal
rights of consumers.
The Facts
A detailed look at the facts of this case reveal that in light of McDonalds’ actions, the awards
were justified:
By its own corporate standards, McDonald’s sells coffee at 180 to 190 degrees Fahrenheit. A
scientist testifying for McDonald’s argued that any coffee hotter than 130 degrees could
produce third degree burns. However, a doctor testifying on behalf of Ms. Liebeck noted that it
takes less than three seconds to produce a third degree burn at 190 degrees.[4]
During trial, McDonald’s admitted that it had known about the risk of serious burns from its
coffee for more than 10 years. From 1982 to 1992, McDonald’s received more than 700
reports of burns from scalding coffee; some of the injured were children and infants. Many
customers received severe burns to the genital area, perineum, inner thighs and
buttocks.[5]In addition, many of these claims were settled, amounting to more than
$500,000.[6]
Witnesses for McDonald’s testified that consumers were not aware of the extent of danger
from coffee spills served at the company’s required temperature. McDonald’s admitted it did
not warn customers and could offer no explanation as to why it did not.[7]
As a result of her injuries, Ms. Liebeck spent eight days in a hospital. In that time she
underwent expensive treatments for third-degree burns including debridement (removal of
dead tissue) and skin grafting. The burns left her scarred and disabled for more than two
years.[8]Before a suit was ever filed, Liebeck informed McDonald’s about her injuries and
asked for compensation for her medical bills, which totaled almost $11,000.[9]McDonald’s
countered with a ludicrously low $800 offer.
McDonald’s had several other chances to settle the case before trial: At one point, Liebeck’s
attorney offered to settle for $300,000.[10] In addition, days before the trial, the judge
ordered both sides into a mediated settlement conference where the mediator, a retired judge,
recommended that McDonald’s settle for $225,000.[11] McDonald’s refused all attempts to
settle the case.
The Findings
The jury found that Ms. Liebeck suffered $200,000 in compensatory damages for her medical
costs and disability. The award was reduced to $160,000 since the jury determined that 20
percent of the fault for the injury belonged with Ms. Liebeck for spilling the coffee.[12]
Based on its finding that McDonald’s had engaged in willful, reckless, malicious or wanton
conduct, the jury then awarded $2.7 million in punitive damages; essential to the size of the
award was the fact that at the time McDonald’s made $1.35 million in coffee sales daily.[13]
Since the purposes of awarding punitive damages are to punish the person or company doing the
wrongful act and to discourage him and others from similar conduct in the future, the degree of
punishment or deterrence resulting from a judgment is in proportion to the wealth of the guilty
person.[14]Punitive damages are supposed to be large enough to send a message to the
wrongdoer; limited punitive awards when applied to wealthy corporations, means the signal they
are designed to send will not be heard. The trial court refused to grant McDonald’s a retrial,
finding that its behavior was “callous.” The judge, however, announced in open court a few days
after the trial that he would reduce the punitive damages award to $480,000.[15]Both sides
appealed the decision.
Before the appeals could be heard the parties reached an out-of-court agreement for an
undisclosed amount of money. As part of this settlement, McDonald’s demanded that no one
could release the details of the case.[16]
Based on the facts, Corporate America’s and much of the media’s trivial portrayal of the case is
deceptive and disgraceful. They have painted a misleading picture of a “legal horror story” when
in fact, the case demonstrates a legal system that punishes corporations for misconduct and
protects consumers who may be victims of their wrongdoing.
Note: The nature of the private settlement and lack of public court documents resulted in the use
of primarily newspaper sources.
November 30, 1999
[1].
Liebeck v. McDonald’s Restaurants, No. CV-93-02419, 1995 (N.M. Dist. Aug. 18, 1994).
[2]. “Hot cup of coffee costs $2.9 million; Damages awarded to woman scalded at McDonald’s.”
The Orange County Register, Aug. 19, 1994, at C1.
[3]. “Coffee Spill Burns Woman; Jury Awards $2.9 Million,” Wall Street Journal, Aug. 19, 1994,
at B3.
[4]. Gerlin, Andrea, “A Matter of Degree: How a Jury Decided McDonald’s Should Pay a Woman
Millions for a Hot-Coffee Spill,” Wall Street Journal, Sept. 1, 1994, at A1.
[5].
Morgan, S. Reed, “Verdict Against McDonald’s is Fully Justified,” The National Law Journal,
Vol. 17 No. 8; Oct. 24, 1996, at A20.
[6].
Gerlin, supra note 4, at A4.
[7].
Morgan, S. Reed, “McDonald’s Burned Itself,” The Legal Times, Sept. 19, 1994, pg. 26.
[8].
Morgan, supra note 5, at A20.
[9]. Sherowski, Elizabeth, “Hot Coffee, Cold Cash: Making the Most of Alternative Dispute
Resolution in High Stakes Personal Injury Lawsuits,” 11 Ohio St. J. on Disp. Resol. 521, 1996.
[10]“McDonald’s Settles Lawsuit of Woman Burned by Coffee,” Liability Week, Vol. 9 No. 47; Dec.
5, 1994.
[11]. Gerlin, supra note 4, at A4.
[12]
Morgan, supra note 5, at A20.
[13]. Morgan, supra note 7, pg. 26.
[14]. § 908 (a); § 908 (e) Punitive Damages, Restatement of the Law, Second, Torts, American
Law Institute (1979)
[15]. Morgan, supra note 5, pg. 26.
[16]. Howard, Theresa, “McDonald’s Settles Coffee Suit in Out-of-Court Agreement,” Nation’s
Restaurant News, Dec. 12, 1994, pg. 1.