We’ve all heard about the lawsuit filed many years ago by a woman who spilled McDonalds coffee on her lap and sued, winning a $2.7 million verdict. Stella Liebeck became to some a symbol of everything wrong with the American legal system, where individuals refuse to accept responsibility for their actions and instead file frivolous lawsuits, driving insurance rates through the roof and forcing companies out of business. ….Or maybe she was truly a victim, and there was a multi-million dollar campaign to distort the facts of this case to promote tort reform?
Susan Saladoff’s 2010 documentary “Hot Coffee” takes a candid look at the American legal system by following four people whose lives have been devastated by their inability to petition the courts for redress, and how corporations spent millions of dollars to protect its interests. The cases she selected are a representation of how people are giving up their rights to the court system and they don’t even know it.
Saladoff says “People just didn’t understand that their perceptions were being manipulated and distorted by large sums of money. We have three branches of government. The executive, the legislative, and the judiciary, which are our courts. Most people know that the executive and legislative branches are bought and paid for with large amounts of money. But our court system is the one place where an average citizen should be able to get justice, regardless of how much money you have. You’re supposed to be able to go head-to-head with a large corporation and get a fair shake. But if the court system is being denied to people, the third branch of government is literally being eroded before our eyes. With this film I hope to open people’s minds to what they think they know, but don’t really know.”
How crazy can we be as a society when a woman spills coffee on herself and gets millions of dollars?
According to Saladoff, “what most people don’t realize is the reason they ask this question is because there was a huge public relations campaign to convince the public that we have an out of control court system. They will want the system reformed or changed, which gives corporations the ability to make more money. Because if you limit people’s access to our court system, then those companies which make defective products that harm people are never held accountable for them.”
79 year old Stella Liebeck was just one example analyzed in Hot Coffee. She suffered third degree burns (the most serious kind of burn) to her groin and inner thighs while trying to add sugar to her coffee at a McDonalds drive through. She spent years undergoing expensive medical treatments to repair the damage done. And McDonalds knew it was hurting people. There were at least 700 previous cases of burning coffee incidents before Liebeck was injured, and McDonalds did not take them seriously enough to change their business practices. McDonalds settled most of those cases, but refused to settle Liebeck’s case because she requested $20,000 compensation to pay for her extensive surgeries. At trial, lawyers discovered that McDonalds routinely served its coffee at 190 degrees, and had been previously warned by the Shriner Burn Institute not to serve coffee above 130 degrees. Doctors testified that at 190 degrees, hot liquid only takes 2-7 seconds to cause third degree burns. The jury granted a $160,000 award for compensatory damages, and found that McDonalds was guilty of “wilfull, reckless, malicious or wanton conduct”, giving a total award of $2.7 million dollars to deter future conduct. The judge then reduced the award to less than half a million dollars. Liebeck then purportedly settled with McDonalds for a sum far less than half a million dollars, which barely covered the cost of her medical bills. Yet, she was turned into a public scapegoat. As a direct result of the lawsuit, McDonalds has since made sure that its coffee is served at a safe temperature.
According to Saladoff, jurors have been brainwashed into believing that large verdicts will affect their pocketbooks.
Why would jurors feel this way?
It wasn’t until the 1950’s that lawyers began to make progress in setting judicial precedents that established corporate responsibility for injuries to workers and consumers. With corporations now being held responsible for its negligence, and consequently their insurance companies being forced to pay damages, the insurance industry responded with a massive public relations campaign against “excessive awards”, targeted at prospective jurors. By the 1980s, the insurance industry decided it was time to take on the law itself. Since they couldn’t attack the victims directly, their ad copy pointed out that “everybody pays” for overzealous lawsuits.
Teams of lobbyists were hired to push tort reform bills through state legislatures. They targeted journalists and circulated bogus “statistics” about the “costs of frivolous lawsuits.” Large corporations created fake grassroots groups like Citizens Against Lawsuit Abuse, buzz of bizarre lawsuits filled the internet, and major media outlets like U.S. News and World Report picked up on the stories without fact-checking.
However, since the 1970’s, the number of lawsuits filed has drastically declined. In addition, government data show that the median jury verdict for punitive damages is now only $37,000, significantly less than the $65,000 median award in 1992. Although corporate America is complaining about how lawsuits are “hurting the economy”, the vast majority of lawsuits are now brought by corporations themselves, not individuals. Moreover, judges dismiss corporate lawsuits as frivolous 69% more often than the lawsuits brought by individuals.
What about medical malpractice? Will outlawing our right to sue grossly negligent doctors for punitive damages stop the escalating costs of healthcare?
No, it won’t. According to the Congressional Budget Office, Medical malpractice lawsuits account for one half of one percent of health care costs. Even if there were no med mal lawsuits, do you really think the insurance company would voluntarily reduce its premiums? When asked, the American Insurance Association stated “The insurance industry never promised that tort reform would achieve specific premium savings.” (March 13, 2002) and the American Tort Reform Association added, “We wouldn’t tell you or anyone that the reason to pass tort reform would be to reduce rates.”
Yet many states have passed state-mandated caps on damages regardless of fault. Hot Coffee takes a look at the case of Colin Gourley, who was born with cerebral palsy because of medical malpractice at birth. He received a $5.65 million award at trial to cover his medical expenses, but because of a Nebraska state-mandated cap on damages he will only collect $1.25 million, an amount that will not cover a lifetime of care. The film shows how the lawsuit cap has affected Colin and his family, as well as how dramatically different his life is compared to that of his identical twin brother, Connor.
Unfortunately these stories are far too common. Take the story of 2 year old Malyia Jeffers, recently profiled on the New York Personal Injury Blog. Her feet and hand were amputated after she spent 5 hours waiting in a California emergency room of an urgent care center. While she waited, she became increasingly lethargic, her fever raged, and she lost the ability to walk. Her father pushed for immediate care, but was rebuffed. After five hours, he ambushed a doctor and a nurse and demanded to see a doctor. The physician took blood samples that suggested Malyia was in liver failure. It turns out she was in septic shock from a Streptococcus A infection that somehow invaded her blood, muscles and internal organs. She required immediate care, and was ignored.
Unfortunately for Malyia, California enacted a one-size-fits-all “tort reform” with a cap of $250,000 on non-economic damages (pain and suffering). That’s right, a lifetime of missing her feet and hand, and all she gets is $250,000. Less, of course, the money to hire the experts, cost of depositions, medical records… and oh yeah, the lawyers. Sorry Malyia, there’s nothing left. And that, ladies and gentlemen, is what you get by enacting “tort reform”. A big fat gift to the insurance companies, and a huge burden to the taxpayers, as a large amount of med mal victims become poverty stricken at some point due to their inability to find gainful employment.
Taxpayers and the injured are not the only victims.
Hot Coffee also probes how when state Supreme Courts were holding caps on damages unconstitutional, Karl Rove and the U.S. Chamber of Commerce masterminded a national campaign to unseat judges who stood in the way of “tort reform.” Hot Coffee explores the story of former Mississippi Supreme Court Justice Oliver Diaz, whose life was fictionalized in John Grisham’s book, The Appeal. When big business interests couldn’t beat Justice Oliver Diaz in his re-election to the Mississippi Supreme Court, despite millions of dollars spent on advertising, they found a way to have him criminally prosecuted on false charges, tainting his reputation and causing political hardship for years to come.
This documentary unearths the sad truth that most of our beliefs about the civil-justice system have been shaped or bought by corporate America, and that the only thing tort reform will accomplish is limiting our ability to hold corporations accountable for their misdeeds.