HOT COFFEE - GSSD



WHAT REALLY HAPPENED?Stella Liebeck, 79-years-old, was sitting in the passenger seat of her grandson’s car having purchased a cup of McDonald’s coffee. After the car stopped, she tried to hold the cup securely between her knees while removing the lid. However, the cup tipped over, pouring scalding hot coffee onto her lap. She received third-degree burns over 16 percent of her body, necessitating hospitalization for eight days, whirlpool treatment for debridement of her wounds, skin grafting, scarring, and disability for more than two years. Despite these extensive injuries, she offered to settle with McDonald’s for $20,000. However, McDonald’s refused to settle for this small amount and, in fact, never offered more than $800.The jury awarded Liebeck $200,000 in compensatory damages — reduced to $160,000 because the jury found her 20 percent at fault — and $2.7 million in punitive damages for McDonald’s callous conduct. (To put this in perspective, McDonald’s revenue from coffee sales alone was in excess of $1.3 million a day.) The trial judge reduced the punitive damages to $480,000, but did state that McDonald’s had engaged in “willful, wanton, and reckless” behavior. Mrs. Liebeck and McDonald’s eventually settled for a confidential amount. The jury heard the following evidence in the case:McDonald’s Operations Manual required the franchisee to hold its coffee at 180 to 190 degrees Fahrenheit;Coffee at that temperature, if spilled, causes third-degree burns (the worst kind of burn) in three to seven seconds;Third-degree burns do not heal without skin grafting, debridement and whirlpool treatments that cost tens of thousands of dollars and result in permanent disfigurement, extreme pain and disability of the victim for many months, and in some cases, years;McDonald’s admitted that it has known about the risk of serious burns from its scalding hot coffee for more than 10 years — the risk was brought to its attention through numerous other claims and suits, to no avail;From 1982 to 1992, McDonald’s coffee burned more than 700 people, many receiving severe burns to the genital area, perineum, inner thighs, and buttocks;McDonald’s admitted at trial that consumers are unaware of the extent of the risk of serious burns from spilled coffee served at McDonald’s then required temperature;Liebeck’s treating physician testified that her injury was one of the worst scald burns he had ever seen.McDonald’s did a survey of other coffee establishments in the area, and found that coffee at other places was between 30-40 degrees cooler.?IS THE USE OF EXAGGERATED OR FICTIONAL LAWSUITS TO PROMOTE TORT REFORM A NEW THING?University of Wisconsin Law School professor Marc Galanter wrote, “Unfortunately, much of the debate on the civil justice system relies on anecdotes and atrocity stories and unverified assertion rather than analysis of reliable data.” Professors William Haltom and Michael McCann illustrate many examples of this in their 2004 book Distorting the Law; Politics, Media and the Litigation Crisis, writing that “tort reformers” typically point to some extraordinary occurrence – some exaggerated or fabricated “horror story” – to symbolize what they want to call “ordinary” about the tort system.For example, the case of Charles Bigbee was the “McDonald’s coffee case” of the 1980s. President Ronald Reagan described Bigbee’s case in a 1986 speech as follows: “In California, a man was using a public telephone booth to place a call. An alleged drunk driver careened down the street, lost control of his car, and crashed into a phone booth. Now, it’s no surprise that the injured man sued. But you might be startled to hear whom he sued: the telephone company and associated firms!”In fact, Bigbee’s leg was severed after a car hit the phone booth in which he had been trapped. The door jammed after he saw the car coming ? he tried to flee but could not. The accident left him unable to walk, severely depressed and unable to work. Because the phone company had placed the booth near a known hazardous intersection, and because the door was defective, keeping him trapped inside, he sued the phone company for compensation.Consumer groups brought Bigbee and others to testify in Congress in 1986. Bigbee said, “I believe it would be very helpful if I could talk briefly about my case and show how it has been distorted not only by the President, but by the media as well. That is probably the best way to show that people who are injured due to the fault of others should be justly compensated for the damages they have to live with the rest of their lives.” House Committee on Banking, Finance and Urban Affairs, July 23, 1986. Charles Bigbee died in 1994 at age 52.WHAT IS A “CAP” ON DAMAGES?A “cap” on damages is law that puts an arbitrary “one-size-fits-all” ceiling on the amount an injured person can receive in compensation by a judge or jury, irrespective of what the evidence presented at a trial proves compensation should be. Therefore, caps take away the authority of judges and juries, who listen to the evidence in a case, to decide compensation based on each specific fact situation. Instead, it places these decisions in the hands of politicians, abandoning this country’s history of individualized justice.A cap is usually defined by a dollar figure ($100,000, $500,000, etc.). Caps only come into play after someone has already been found liable for causing harm. They have nothing to do with “frivolous” lawsuits. They apply no matter how much merit a case has, or the extent of misconduct.WHO IS MOST HURT BY CAPS?Caps apply regardless of how serious an injury is. In fact, they only affect the most severely injured, because only the most seriously injured have damages that ever rise to the level of a cap. The state of California has had a 35-year track record with a $250,000 “non-economic” damages cap in medical malpractice cases. (Non-economic damages compensate for injuries like permanent disability, disfigurement, blindness, loss of a limb, paralysis, trauma, or physical pain and suffering.) According to an analysis by the Rand Institute for Civil Justice, plaintiffs less than one year of age had awards capped 71 percent of the time, compared with 41 percent for all plaintiffs with identifiable non-fatal injuries. Injury cases with reductions of $2.5 million or more usually involved newborns and young children with very critical injuries. In effect, such a cap comes from reductions in payments to the most seriously injured and those with the longest lifespan after the injury—children. Caps also make cases economically impossible for attorneys to bring. In fact, this problem has already happened in states like California. Insurance defense attorney Robert Baker, who defended malpractice suits for more than 20 years, told Congress in 1994, “As a result of the caps on damages, most of the exceedingly competent plaintiff’s lawyers in California simply will not handle a malpractice case… There are entire categories of cases that have been eliminated since malpractice reform was implemented in California.A CORPORATE END RUN AROUND THE CIVIL JUSTICE SYSTEMFor 35 years, the tobacco, insurance, pharmaceutical, chemical, oil and auto companies have been before Congress and state legislatures trying to take power and authority away from juries. With “mandatory” or “forced” arbitration, they are accomplishing exactly the same objective—abolishing jury trials and eliminating the American public’s right to sue and hold accountable corporations that cause injuries.Mandatory binding arbitration is a process by which parties “agree” to have a third party arbitrator (single arbitrator or a panel), instead of a jury or judge, resolve a dispute. Arbitrators are not required to have any legal training and they need not follow the law. Court rules of evidence and procedure, which tend to neutralize imbalances between the parties in court, do not apply. There is limited discovery making it is much more difficult for individuals to have access to important documents that may help their claim. Arbitration proceedings are secretive. There is no right to public access. Arbitrators do not write or publish detailed written opinions, so no legal precedent or rules for future conduct can be established. Their decisions are still enforceable with the full weight of the law even though they may be legally incorrect. This is especially disturbing since these decisions are binding, so victims have virtually no right to appeal an arbitrator’s ruling.While arbitration clauses are said to be justified on the grounds that they are “voluntary,” this is hardly true. Arbitration clauses are usually outlined in tiny print, buried in documents and paragraphs and written in legalese that is incomprehensible to most people. Moreover, these clauses are mandatory, meaning that people are compelled to agree to arbitration even before a dispute arises (i.e., “pre-dispute.”). Because entire industries are inserting these arbitration terms into contracts, there is usually little choice but to agree to them. In other words, “consent” is not voluntary, at all.IS MANDATORY BINDING ARBITRATION A BIASED PROCESS? Arbitration has many built-in advantages that favor businesses. Bias is an obvious problem. Arbitrators may be on contract with the businesses against which the claim is brought. Often the company, not the victim, is allowed to choose the arbitrator. This creates inherent bias and self-interest on the part of the arbitrator—the arbitrator is motivated to rule in a way that will attract future company business. Businesses that are frequently before an arbitrator also know from experience which arbitrators are likely to rule favorably for them.At the same time, arbitration companies have a financial incentive to side with corporate repeat players who generate most of the cases they handle. In March 2008, the city of San Francisco filed a lawsuit alleging that one of the nation’s major arbitration providers operated an “arbitration mill” that favored debt collectors. According to the complaint, National Arbitration Forum (NAF) arbitrators ruled in favor of California consumers in less than 0.2% of all cases (30 out of 18,075) heard from January 1, 2003 through March 31, 2007. These 30 victories only occurred in hearings where a consumer brought claims against a business; when companies brought claims against consumers, they were successful in hearings 100% of the time.Harvard Law Professor and former NAF arbitrator Elizabeth Bartholet confirmed NAF’s anti-consumer bias in testimony before Congress. On July 23, 2008, Bartholet told the U.S. Senate Judiciary Committee how a credit card company had been allowed to remove her from cases once she ruled in favor of a consumer. “I concluded from this experience that the NAF process was systematically biased in favor of credit card companies and against debtors, since the process gave the companies a peremptory challenge right which they could use to systematically remove any arbitrator who ruled against a credit card company in a single case, since the companies were apparently using it in this way, since the alleged debtors were not in a position to know what was going on, and since NAF was fully aware of the practice and was either facilitating it or at a minimum tolerating it rather than doing anything to address it.”DOESN’T ARBITRATION SAVE TIME AND MONEY FOR THE CONSUMER OR EMPLOYEE?Arbitration cases can take years. Arbitration clauses also often require that hearings be held in a location inconvenient to the claimant. And whereas victims who go to court pay nothing up front, arbitration costs must generally be split between the injured victim and the insurance company, including the arbitrator’s fees, which can range between $200 and thousands of dollars per hour. This can be prohibitively expensive for an injured victim who has suffered financial loss, particularly in personal injury cases. Victims who are in need of medical care, who are disabled or perhaps in pain, who cannot work, whose families are disrupted and who may have major expenses, are in a substantially weaker position than their opposing party, the perpetrator of their harm or their insurers.ASSIGNMENTUse the Hot Coffee case as the source material to complete a D.R. table and essay. The issue is Tort Reform, and you will do the work and gather the details from that point. ................
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