I attend a numbering of professional networking and bar events. At one recent event a speaker representing foreign clients discussed his clients’ desire to negotiate arbitration clauses to avoid the U.S. court system, which they view as exemplified by the “McDonald’s coffee spill” case.
I encourage clients to negotiate arbitration clauses where they wish to assure a private and more nimble resolution to business disputes. (See “Jay Spillane Delivers Update on Business Arbitration to ProVisors’ Valley LLP Group.”) But, the idea that a case over spilt coffee teaches negative lessons about the U.S. court system has me diving head first into the fraught intersection of law and politics.
The “McDonald’s coffee spill” case is commonly understood to involve a woman who was awarded seven figures by a jury merely because a cup of McDonald’s coffee was spilled in her lap. This story underscores two themes favored by right-leaning media: that we have become a nation of whiners who expect courts to respond to every slight and that companies need ever-increasing lawsuit reform as protection against out-of-control trial lawyers and jury verdicts.
I don’t agree.
The Wall Street Journal, no mouthpiece for trial lawyers, ran an article on the McDonald’s coffee case, which reported that public opinion was squarely against the verdict, and that the jury had their doubts about sitting in a coffee spill case, until they heard the evidence. McDonald’s instructed its franchisees to hold coffee at 180 to 190 degrees, for optimal taste. There was expert testimony that liquids at this temperature could cause serious burns in seconds. The plaintiff spent seven days in the hospital for third degree burns and received skin grafts. McDonald’s admitted that it had received more than 700 complaints about prior burn injuries, but did not provide warnings or change the temperatures because there were “more serious dangers in restaurants” and that it found the number of burns “statistically insignificant” compared to the number of cups sold. (See “A Matter of Degree: How a Jury Decided That a Coffee Spill Is Worth $2.9 Million.”)
McDonald’s refused a pre-suit offer to settle for $20,000 and another offer during the case to settle for $90,000. The jury awarded $160,000 in compensatory damages and $2.7 million in punitive damages. The trial judge later lowered the punitive damages to $480,000, three times the compensatory award. The parties settled during an appeal. (See “Liebeck v. McDonald’s Restaurants.”)
I have defended companies in court. McDonald’s made serious mistakes. From the reports, McDonald’s was poorly advised to walk away from early opportunities to settle for a fraction of the jury award. The jurors affirmed that McDonald’s witnesses were tone deaf by speaking of the plaintiff as an insignificant statistic, when the jury was looking at an elderly woman who had spent seven days in the hospital for serious burns.
As the proprietor of a smaller firm, we have had our share of cases representing the plaintiff. Jurors are people who work hard for their money. It has been my experience that juries give verdicts only based upon serious evidence. I think the McDonald’s jury reacted soberly to the severity of the injuries, McDonald’s refusal to change course after 700 burn complaints and the terrible performance of its witnesses at trial.
Can juries sometimes get distracted or muddle the issues? Sure. Are there outlier results? Yes. However, there are procedural safeguards when this happens. Trial judges can, under the right circumstances, set aside a verdict and enter a different judgment, or order a new trial. Trial judges can reduce awards, which happened in the McDonald’s case. All parties have a right to review a judgment on appeal.
Our system of deciding business disputes by courts and juries is not perfect, but it is a reasonable and fair system with many safeguards in place. I don’t think the system warrants scorn based upon mythologized versions of the McDonald’s case. Other nations don’t have a fair system to right a wrong. I think everyone from the little guy to the biggest corporations are entitled to, and do, get a fair day in court. I don’t think people’s access to the court system needs ever-increasing legislative barriers in the form of lawsuit reforms.
Our Founding Fathers enshrined trial by jury in our constitution. Let’s trust the system they created.