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9/1/94 WSJ A1
9/1/94 Wall St. J. A1
1994 WL-WSJ 342815
The Wall Street Journal
Copyright (c) 1994, Dow Jones & Co., Inc.
Thursday, September 1, 1994
A Matter of Degree: How a Jury Decided That a Coffee Spill Is Worth $2.9
Million
--- McDonald's Callousness Was Real Issue, Jurors Say, In Case of Burned Woman --- How Hot Do You Like It?
By Andrea Gerlin
Staff Reporter of The Wall Street Journal
ALBUQUERQUE, N.M. -- When a law firm here found itself defending
McDonald's Corp. in a suit last year that claimed the company served
dangerously hot coffee, it hired a law student to take temperatures at
other local restaurants for comparison.
After dutifully slipping a thermometer into steaming cups and mugs
all over the city, Danny Jarrett found that none came closer than about
20 degrees to the temperature at which McDonald's coffee is poured,
about 180 degrees.
It should have been a warning.
But McDonald's lawyers went on to dismiss several opportunities to
settle out of court, apparently convinced that no jury would punish a
company for serving coffee the way customers like it. After all, its
coffee's temperature helps explain why McDonald's sells a billion cups
a year.
But now -- days after a jury here awarded $2.9 million to an
81-year-old woman scalded by McDonald's coffee -- some observers say
the defense was naive. "I drink McDonald's coffee because it's hot, the
hottest coffee around," says Robert Gregg, a Dallas defense attorney
who consumes it during morning drives to the office. "But I've
predicted for years that someone's going to win a suit, because I've
spilled it on myself. And unlike the coffee I make at home, it's really
hot. I mean, man, it hurts."
McDonald's, known for its fastidious control over franchisees,
requires that its coffee be prepared at very high temperatures, based
on recommendations of coffee consultants and industry groups that say
hot temperatures are necessary to fully extract the flavor during
brewing. Before trial, McDonald's gave the opposing lawyer its
operations and training manual, which says its coffee must be brewed at
195 to 205 degrees and held at 180 to 190 degrees for optimal taste.
Since the verdict, McDonald's has declined to offer any comment, as
have their attorneys. It is unclear if the company, whose coffee cups
warn drinkers that the contents are hot, plans to change its
preparation procedures.
Coffee temperature is suddenly a hot topic in the industry. The
Specialty Coffee Association of America has put coffee safety on the
agenda of its quarterly board meeting this month. And a spokesman for
Dunkin' Donuts Inc., which sells about 500 million cups of coffee a
year, says the company is looking at the verdict to see if it needs to
make any changes to the way it makes coffee.
Others call it a tempest in a coffeepot. A spokesman for the National
Coffee Association says McDonald's coffee conforms to industry
temperature standards. And a spokesman for Mr. Coffee Inc., the
coffee-machine maker, says that if customer complaints are any
indication, industry settings may be too low -- some customers like it
hotter. A spokeswoman for Starbucks Coffee Co. adds, "Coffee is
traditionally a hot beverage and is served hot and I would hope that
this is an isolated incident."
Coffee connoisseur William McAlpin, an importer and wholesaler in Bar
Harbor, Maine, who owns a coffee plantation in Costa Rica, says 175
degrees is "probably the optimum temperature, because that's when
aromatics are being released. Once the aromas get in your palate, that
is a large part of what makes the coffee a pleasure to drink."
Public opinion is squarely on the side of McDonald's. Polls have
shown a large majority of Americans -- including many who typically
support the little guy -- to be outraged at the verdict. And radio
talk-show hosts around the country have lambasted the plaintiff, her
attorneys and the jurors on air. Declining to be interviewed for this
story, one juror explained that he already had received angry calls
from citizens around the country.
It's a reaction that many of the jurors could have understood --
before they heard the evidence. At the beginning of the trial, jury
foreman Jerry Goens says he "wasn't convinced as to why I needed to be
there to settle a coffee spill."
At that point, Mr. Goens and the other jurors knew only the basic
facts: that two years earlier, Stella Liebeck had bought a 49-cent cup
of coffee at the drive-in window of an Albuquerque McDonald's, and
while removing the lid to add cream and sugar had spilled it, causing
third-degree burns of the groin, inner thighs and buttocks. Her suit,
filed in state court in Albuquerque, claimed the coffee was "defective"
because it was so hot.
What the jury didn't realize initially was the severity of her burns.
Told during the trial of Mrs. Liebeck's seven days in the hospital and
of her skin grafts, and shown gruesome photographs, jurors began taking
the matter more seriously. "It made me come home and tell my wife and
daughters don't drink coffee in the car, at least not hot," says juror
Jack Elliott.
Even more eye-opening was the revelation that McDonald's had seen
such injuries many times before. Company documents showed that in the
past decade McDonald's had received at least 700 reports of coffee
burns ranging from mild to third degree, and had settled claims arising
from scalding injuries for more than $500,000.
Some observers wonder why McDonald's, after years of settling
coffee-burn cases, chose to take this one to trial. After all, the
plaintiff was a sympathetic figure -- an articulate, 81-year-old former
department store clerk who said under oath that she had never filed
suit before. In fact, she said, she never would have filed this one if
McDonald's hadn't dismissed her request for compensation for pain and
medical bills with an offer of $800.
Then there was the matter of Mrs. Liebeck's attorney. While
recuperating from her injuries in the Santa Fe home of her daughter,
Mrs. Liebeck happened to meet a pair of Texas transplants familiar with
a Houston attorney who had handled a 1986 hot-coffee lawsuit against
McDonald's. His name was Reed Morgan, and ever since he had deeply
believed that McDonald's coffee is too hot.
For that case, involving a Houston woman with third-degree burns, Mr.
Morgan had the temperature of coffee taken at 18 restaurants such as
Dairy Queen, Wendy's and Dunkin' Donuts, and at 20 McDonald's
restaurants. McDonald's, his investigator found, accounted for nine of
the 12 hottest readings. Also for that case, Mr. Morgan deposed
Christopher Appleton, a McDonald's quality assurance manager, who said
"he was aware of this risk . . . and had no plans to turn down the
heat," according to Mr. Morgan. McDonald's settled that case for
$27,500.
Now, plotting Mrs. Liebeck's case, Mr. Morgan planned to introduce
photographs of his previous client's injuries and those of a California
woman who suffered second- and third-degree burns after a McDonald's
employee spilled hot coffee into her vehicle in 1990, a case that was
settled out of court for $230,000.
Tracy McGee of Rodey, Dickason, Sloan, Akin & Robb, the lawyers for
McDonald's, strenuously objected. "First-person accounts by sundry
women whose nether regions have been scorched by McDonald's coffee
might well be worthy of Oprah," she wrote in a motion to state court
Judge Robert Scott. "But they have no place in a court of law." Judge
Scott did not allow the photographs nor the women's testimony into
evidence, but said Mr. Morgan could mention the cases.
As the trial date approached, McDonald's declined to settle. At one
point, Mr. Morgan says he offered to drop the case for $300,000, and
was willing to accept half that amount. But McDonald's didn't bite.
Only days before the trial, Judge Scott ordered both sides to attend
a mediation session. The mediator, a retired judge, recommended that
McDonald's settle for $225,000, saying a jury would be likely to award
that amount. The company didn't follow his recommendation.
Instead, McDonald's continued denying any liability for Mrs.
Liebeck's burns. The company suggested that she may have contributed to
her injuries by holding the cup between her legs and not removing her
clothing immediately. And it also argued that "Mrs. Liebeck's age may
have caused her injuries to have been worse than they might have been
in a younger individual," since older skin is thinner and more
vulnerable to injury.
The trial lasted seven sometimes mind-numbing days. Experts dueled
over the temperature at which coffee causes burns. A scientist
testifying for McDonald's argued that any coffee hotter than 130
degrees could produce third-degree burns, so it didn't matter whether
McDonald's coffee was hotter. But a doctor testifying on behalf of Mrs.
Liebeck argued that lowering the serving temperature to about 160
degrees could make a big difference, because it takes less than three
seconds to produce a third-degree burn at 190 degrees, about 12 to 15
seconds at 180 degrees and about 20 seconds at 160 degrees.
The testimony of Mr. Appleton, the McDonald's executive, didn't help
the company, jurors said later. He testified that McDonald's knew its
coffee sometimes caused serious burns, but hadn't consulted burn
experts about it. He also testified that McDonald's had decided not to
warn customers about the possibility of severe burns, even though most
people wouldn't think it possible. Finally, he testified that
McDonald's didn't intend to change any of its coffee policies or
procedures, saying, "There are more serious dangers in restaurants."
Mr. Elliott, the juror, says he began to realize that the case was
about "callous disregard for the safety of the people."
Next for the defense came P. Robert Knaff, a human-factors engineer
who earned $15,000 in fees from the case and who, several jurors said
later, didn't help McDonald's either. Dr. Knaff told the jury that
hot-coffee burns were statistically insignificant when compared to the
billion cups of coffee McDonald's sells annually.
To jurors, Dr. Knaff seemed to be saying that the graphic photos they
had seen of Mrs. Liebeck's burns didn't matter because they were rare.
"There was a person behind every number and I don't think the
corporation was attaching enough importance to that," says juror Betty
Farnham.
When the panel reached the jury room, it swiftly arrived at the
conclusion that McDonald's was liable. "The facts were so
overwhelmingly against the company," says Ms. Farnham. "They were not
taking care of their consumers."
Then the six men and six women decided on compensatory damages of
$200,000, which they reduced to $160,000 after determining that 20% of
the fault belonged with Mrs. Liebeck for spilling the coffee.
The jury then found that McDonald's had engaged in willful, reckless,
malicious or wanton conduct, the basis for punitive damages. Mr. Morgan
had suggested penalizing McDonald's the equivalent of one to two days
of companywide coffee sales, which he estimated at $1.35 million a day.
During the four-hour deliberation, a few jurors unsuccessfully argued
for as much as $9.6 million in punitive damages. But in the end, the
jury settled on $2.7 million. McDonald's has since asked the judge for
a new trial. Judge Scott has asked both sides to meet with a mediator
to discuss settling the case before he rules on McDonald's request. The
judge also has the authority to disregard the jury's finding or
decrease the amount of damages.
One day after the verdict, a local reporter tested the coffee at the
McDonald's that had served Mrs. Liebeck and found it to be a
comparatively cool 158 degrees. But industry officials say they doubt
that this signals any companywide change. After all, in a series of
focus groups last year, customers who buy McDonald's coffee at least
weekly say that "morning coffee has minimal taste requirements, but
must be hot," to the point of steaming.
---- INDEX REFERENCES ----
COMPANY (TICKER): MCDONALD'S CORP.; ALLIED DOMECQ PLC (MCD U.ALL)
NEWS SUBJECT: CONSUMER ISSUES; LAWSUITS; TRADE GROUPS; WORLD EQUITY INDEX
(CSU LWS TRG WEI)
MARKET SECTOR: CONSUMER CYCLICAL; INDUSTRIAL; CONSUMER NON-CYCLICAL (CYC
IDU NCY)
INDUSTRY: BEVERAGES; DISTILLERS & BREWERS; ALL ENTERTAINMENT &
LEISURE; GENERAL INDUSTRIAL & COMMERCIAL SERVICES;
RESTAURANTS; ALL INDUSTRIAL & COMMERCIAL SERVICES (BVG DST
ENT ICS RES SVC)
REGION: EUROPE; ILLINOIS; NEW MEXICO; NORTH AMERICA; GREAT BRITAIN;
UNITED STATES; WESTERN EUROPE (EU IL NM NME UK US WEU)
LAYOUT CODES: PAGE ONE UMBRELLA; RIGHT LEADER (PGO RGT)
Word Count: 1911
9/1/94 WSJ A1
END OF DOCUMENT
