Perhaps, there is no greater case standing for the excesses oflitigation than the McDonald's Coffee case. If you are not familiarwith this case, Mrs. Stella Liebeck (79 years old) was ridingshotgun in the McDonald's drive-thru and ordered a cup of coffee.She set the cup of coffee between her legs and as her son took off,the lid on the coffee came loose resulting in scalding hot coffeeburning Mrs. Liebeck's groin. She sued McDonald's alleging severaldifferent theories including breach of warranty. At the conclusionof her jury trial, Mrs. Liebeck received $160,000 in compensatorydamages and $2.7 million in punitive damages, much to the outrageof the general public. In fact, in one of the great televisionparodies on this case and our legal system, an episode of Seinfeldlampooned Mrs. Liebeck's result

But if we dig deeper, you might find some interesting factsabout Mrs. Liebeck's case. For example:

McDonald's served its coffee generally at 180-190 degreesFaherenheit.

During discovery, McDonald's had faced more than 700 claims bycustomers who had been burned by their coffee between 1982 and1992.

Generally, most other establishments serve coffee at 135-140degrees.

McDonald's quality assurance manager testified that burn hazardsexist on any food substance served above 140 degrees.

Mrs. Liebeck required a vascular surgeon to repair her burns byskin graft over 6% of her body.

The trial court reduced the punitive damage award to$480,000.

Mrs. Liebeck initially offered to settle for $20,000 to coverher medical costs. McDonald's refused.

The questions to be discussed this week are as follows: Do youthink McDonald's breached it's implied warranty when it sold MsLiebeck her coffee? Do you think the trial court should havedownwardly reduced the punitive damages award from $2.7M to $480K?Could there be any business justification for McDonald's toessentially ignore the 700 claims for hot coffee made between1982-1992? Explain.