The media catalyst used to support "tort reform," particularly
products liability legislation, has been punitive damages. A few
cases that have won headlines have been misrepresented to portray
jury verdicts as "out of control."
The poster child of civil justice opponents is the McDonald's
coffee case. That 1992 New Mexico verdict was an instant headline,
a lightning rod for those who want access to our courts reserved
for corporate America.
A few weeks ago, I spilled a cup of McDonald's coffee in my lap.
I instantly remembered Stella Liebeck's case. Its outcome saved
me and, no doubt, countless other clumsy coffee drinkers from being
seriously burned.
That case demonstrates how well our system works. Unfortunately,
headlines and misrepresentations by civil justice's opponents misshaped
public opinion about Mrs. Liebeck's case against McDonald's. The
public was led to believe that a woman driving a car was holding
a cup of McDonald's coffee between her knees, spilled it, burned
herself, and hired a trial lawyer who conned a jury into awarding
her $2.86 million. But these are the facts:
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Mrs. Liebeck's car was not moving; it was parked.
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The coffee was not just hot (135-140 degrees, which can cause
mild discomfort) but scalding (180-190 degrees, which can cook
through all layers of skin within seven seconds).
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Mrs. Liebeck asked for $20,000 for her medical bills (she spent
eight days in the hospital and had painful skin grafts and debridement
treatments). She didn't want to sue.
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McDonald's rejected her offer and then mediation, insisting
on a trial.
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McDonald's admitted its coffee was 40 to 50 degrees hotter
than is fit for human consumption.
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Mrs. Liebeck suffered third-degree burns over 6 percent of
her body. McDonald's knew more than 700 people, including babies,
had been burned by its coffee.
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McDonald's told the jury it wouldn't lower its coffee's temperature,
prompting the jury to punish the corporation.
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The jury awarded $200,000 for actual damages, reduced to $160,000
because it found Mrs. Liebeck 20 percent at fault.
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The jury's decision to punish McDonald's with $2.7 million in
punitive damages for blatant misconduct was reasoned: That's two
days of coffee sales for McDonald's.
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At trial, Judge Robert Hayes Scott reduced the punitives to
three times actual damages--$480,000.
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Post-verdict mediation was ordered, the case settled, and there
was no appeal.
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McDonald's immediately lowered the temperature of its coffee.
That jury, after hearing all the facts and arguments, taught McDonald's--and,
we hope, other corporations--a lesson: If you recklessly make or
sell a dangerous product, you will be held accountable.
McDonald's suffered substantial, but hardly outrageous, financial
punishment for its irresponsible practices. Mrs. Liebeck was compensated
for her injuries. And folks like me are less likely to get burned.
That's exactly how our legal system is supposed to work. That's
also why the insurance, tobacco, and other major industries want
to change it. They think it works too well.
The key is punitive damages--an unpredictable business expense
for corporate misconduct. Corporations want Americans to think that
huge punitive damages are awarded constantly, crippling businesses
and raising consumer prices.
This is simply not true. Punitive damages are rare, especially
in products liability cases. A Rand study showed that 47 percent
are awarded in business-against-business litigation, versus less
than 5 percent in products cases. And according to a study by Suffolk
University law professor Michael Rustad, punitive damages were awarded
in only 353 products liability cases (91 of them asbestos) between
1965 and 1990--an average of 14 per year or one per state every
four years.
Most important, punitive damages bring safety. They have forced
removal from the market of flammable children's pajamas, asbestos,
tampons causing toxic shock syndrome, defective intrauterine contraceptive
devices, and a host of hazardous drugs. They have forced car manufacturers
to correct design defects like exploding gas tanks on Ford Pintos,
slipping transmissions, and faulty minivan door latches.
In vetoing the products liability bill in 1996, President Clinton
said arbitrary limits on punitive damages "would mean more
unsafe products in our homes . . . [and] let wrongdoers off the
hook."
Trial lawyers put our faith in the good judgment of juries. In
cases where punitive damages may be applied, court instructions
require jurors to use their good judgment--their common sense of
right and wrong.
In America, a driver who kills someone can be imprisoned. But there
are no prison terms for corporations that maim and kill. If a jury
is convinced a corporate wrongdoer has been so irresponsible that
it deserves punishment, the idea of Washington politicians stepping
in to say "no" is repugnant.
- TRIAL, June 1997, page 9
