* Administrative law judge sues local cleaners for $65 million for "losing" his pants, later found and returned to him with the original ticket.
* Woman sues pharmacy for false labeling because she ate a popular contraceptive gel, thinking it was "jelly" that would be just fine on toast.
* A woman sues McDonald's and recovers $2.7 million after spilling McDonald's coffee in her lap.
The answer is McDonald's. The first two cases are still pending or never went anywhere. The McDonald's case was tried, reached a highly publicized jury verdict and then settled in the six-figure range. However, until the jury delivered its verdict, the case was regarded by virtually all as "frivolous," "meritless" and "outrageous." The point is that the only opinions that matter are the judge's and jury's. Until a case is fully developed, it is premature to engage in labeling. Doing this can be at the company's peril.
This coffee case is a great example of mob mentality and rush to judgment. The press seized upon a few select facts that, though true, obscured more important facts. What we heard was: woman visits McDonald's, spills coffee, sues and gets $3 million, and our civil justice system is broken.
What we did not know is that Stella Liebeck was a 79-year-old grandmother who removed her coffee lid while seated in her grandson's car. The cup tipped and scalding hot (190 degrees Fahrenheit) coffee spilled on her--causing third-degree burns and a week's hospitalization with painful skin debridement, skin grafting and burn treatment, leaving her permanently scarred and disabled for two years.
McDonald's had known for a decade about the risk of scalding coffee spills--receiving 700-plus reports about severe burns to the genital area, legs and arms of children, infants and adults. Further, the coffee was served 50 degrees Fahrenheit hotter than the beverage at most other retail coffee services, a temperature McDonald's knew could and did destroy human tissue.
Despite all this, Liebeck offered to settle for $20,000. McDonald's refused--after all, her case was frivolous. Wrong move. Disagreeing, the jury awarded Liebeck $200,000 in compensatory damages, a sum later reduced by the jury to $160,000 because of her 20 percent contributory negligence, and then $2.7 million in punitive damages, ultimately reduced by a trial judge to $480,000, for McDonald's "callous" conduct. Thereafter, the parties settled while the case was on appeal.
There's no question that we are a litigious society. Every day, ill-conceived, hastily prepared, truly meritless lawsuits are filed. However, most are weeded out before trial, and occasionally sanctions are imposed upon lawyers and clients who pursue demonstrably frivolous lawsuits. Most cases, though, present areas of gray, and that's why a good number, like McDonald's, settle. Those that do not are decided by juries, judges sitting without juries or arbitrators who almost always do the right thing, the O.J. Simpson case notwithstanding.
The notion that we are afloat in a sea of frivolous lawsuits, while sometimes entertaining, is simply untrue. We spend more on dog food in this country than we do on payouts for medical-malpractice claims. And, per capita, individuals sue less often today than they did in the pre-Civil War era.
Yet, frivolity is in the eye of the beholder, and the only beholders that count are jurors and judges. Assuming a case is foolish and unfounded is a big mistake--and one that could result in poor decisions and ultimately leave the company with a bigger payout.
PHILIP KIRCHER is co-chairman of the commercial litigation department at the law firm of Cozen O'Connor.
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July 1, 2007
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