In a previous post we reviewed the circumstances under which a company that operates by granting franchises (a franchisor) could be held liable for the actions of a franchise holder (a franchisee). In today’s post, the personal injury lawyer at The Doan Law Firm will discuss what is possibly the most famous (or infamous) case involving franchisor liability, the 1994 “McDonald’s Coffee Case.”
The Cup of Coffee Case
On February 27, 1992 a 79-year-old woman ordered a 49-cent cup of coffee from the drive-through window of a McDonald's restaurant. When she attempted to add cream and sugar to her coffee she spilled the entire cup of coffee on her lap and suffered 30 burns to 6% of her thighs and pelvis along with lesser burns to an additional 160 of the same area. The injuries caused her to be hospitalized for skin grafting, followed by a two-week convalescence at home.
After McDonald’s declined to settle her injury claim, the woman filed a lawsuit in a local state superior court alleging that McDonald’s had been “grossly negligent" by selling coffee that was "unreasonably dangerous" and "defectively manufactured" (too hot). At trial, it was determined that McDonald’s required its franchisees to serve coffee at a temperature of 180–190 °F (82–88 °C) despite knowing that such temperatures could lead to burns if accidentally spilled.
The jury found in favor of the plaintiff and awarded her $200,000 in compensatory damages and $2.7 million in punitive damages. The same jury also held that the woman’s own carelessness made a 20% contribution to her injuries and then applied the doctrine of contributory negligence, reducing the damages awarded to $160,000. The presiding judge reduced the punitive damages to $480,000. Both sides appealed, but reached a negotiated settlement before the Court of Appeals issued its ruling.
The Impact on McDonald's and Food Establishments
In this case, the jury held that 1) since McDonald’s held its franchisees to very strict compliance with its corporate policies regarding how food was both prepared and served and 2) since compliance with those preparation and serving policies led the franchisee to serve a product that was dangerous in and off itself, McDonald’s was liable for the injury suffered.
In the years since this case was decided, similar lawsuits have been filed against other franchised fast-food and restaurant operations whose policies regarding preparation and serving allegedly led to a customer’s injury. Whether such lawsuits are justified or represent cases of “frivolous” lawsuits is not the issue. It remains a fact that, if a franchisor sets strict standards of conduct that its franchisee must adhere to, the franchisor can be held liable for any resulting injuries.
The “McDonald’s Coffee Case” is formally known as: Stella Liebeck v. McDonald's Restaurants, P.T.S., Inc. and McDonald's International, Inc. and may be cited as (1994 Extra LEXIS 23 (Bernalillo County, N.M. Dist. Ct. 1994), 1995 WL 360309 (Bernalillo County, N.M. Dist. Ct. 1994).