Case Analysis
Liebeck v. McDonald’s Restaurants
Pearson v. Chung

Introduction
Liebeck v. McDonald’s Restaurant, also referred to as the “McDonald coffee case”, was a well known case in the United States of America in 1994 because it was considered frivolous. The case involved a woman Stella Lieback, who spilled the hot coffee she purchased from McDonald onto her lap and sustained a series of third degree burns, and was awarded millions of dollars from her lawsuit against McDonalds. The coffee was not only hot, but it was scalding, capable of immediate damage to the skin, flesh and muscle (Letric Law, 2011).
In addition to the above case, the Pearson v. Chung case, also known as the “pants lawsuit”, was also a well known case in America in 2005 (Lexis-Nexis, 2008). This is a case where an administrative law judge in the District of Columbia had taken a pair of pants to the cleaners for alteration and dry cleaning; and sued the cleaners for $67 million dollars for the loss of his pants. The case was considered frivolous and became a flashpoint in the debate in the United States over tort reform (Lexis-Nexis, 2008).
The major focus of this paper will be to critically analyze these two cases on the stated facts, the issues, the applicable laws, and the decision of the judge and the jury.

What are the facts?
There are some facts associated with Liebeck v. McDonald’s case. The woman involved in this case was 79-year old Stella Liebeck of Albuquerque, New Mexico, who earned $5,000.00 a year as a sales clerk (Cain, 2008). On February 29, 1992, Stella, who was a passenger in Chris, her grandson’s car, a Ford Probe, ordered a cup of coffee at a drive-thru window at a local McDonald restaurant; and the coffee was served in a styrofoam cup (Letric Law, 2011). Furthermore, Chris drove away from the drive-thru window, stopped the car so Ms. Liebeck could add cream and sugar to her coffee, but she had trouble getting off the lid. She then placed the styrofoam cup between her legs, thus freeing her two hands in order to be able to remove the lid (Letric Law, 2011). When she proceeded to remove the lid while holding the cup between her legs, the entire cup spilled onto her thighs (through her sweatpants) and was immediately absorbed through her sweat suit as if she was immersed in scalding liquid (Gerlin, 2002). The beverage was found to be at a temperature between 180-190 degrees Fahrenheit, about 70 degrees hotter than the average cup of coffee. This extreme temperature resulted in Ms. Liebeck suffering third-degree burns over 6 percent of her 79-year old body, and having to spend over a week in the hospital; undergoing two reconstructive (not cosmetic) skin grafts, where skin was shaved from one part of her body and placed on top of the burned areas (Cain, 2008). From that moment on, Ms. Liebeck was never able to bend or use her legs to the same extent as previously, and the overall quality of her life was severely affected (Gerlin, 2002). Ms. Liebeck filed suit against McDonald only seeking compensation for the cost of her medical bills, which totaled more than $20,000, and McDonald refused to settle out of court and insisted on a trial (Cain 2008).
Pearson v. Chung case was a District of Columbia civil lawsuit by Mr. Pearson that included three defendants: Jin Chung, Soo Chung and their son, Ki Chung (Lexis-Nexis, 2008). At the time of the lawsuit, Mr. Pearson was an attorney and also a DC Administrative Law Judge; he sued Custom Cleaners for $67 million for the loss of a pair of pants. Jin Chung, Soo Chung, and their son, Ki Chung are the owners of the dry cleaning service located in Washington, DC. The Chung migrated to the United States from South Korea in 1992 in search of prosperity and the American dream, and in 2000, they purchased Custom Cleaners, a dry cleaning and alterations service located in Washington, DC. While Mr. Pearson is representing himself, the Chung family (the defendants), were represented by Christopher Manning of Manning & Sossamon Law Firm (Lexis-Nexis, 2008). Mr. Pearson alleges that on May 3, 2005 he left a pair of pants with the Chungs to be altered by May 5, 2005. The pants he took to the cleaners were grey in color and were unique in that they had a succession of three belt loops, very close together on each side of the front waistband of the pants (Lexis-Nexis, 2008). The Chungs offered the altered grey pants to Mr. Pearson a few days after the May 5, 2005 deadline because the pants had to be sent to their other store. Mr. Pearson, was angered by the fact that the pants was late and refused to accept the pants from Chungs even thou (1) the pants had the same belt hoop as the one originally submitted; (2) the measurements were identical to the measurement he requested for alterations; and (3) the tags on his pants were the same as his receipts (Lexis-Nexis, 2008). Before this allegation, Mr. Pearson had demanded a little over a $1,000 as compensation for his pants, which the Chungs were unable to fulfill, he then filed a lawsuit in the District of Columbia Superior Court, alleging that the Chungs misled him by trying to return to him a pair of pants that did not belong to him, and that the signs in Custom Cleaners read "Satisfaction Guaranteed", "Same Day Service" and "All Work Done on Premises" were misleading (Lexis-Nexis, 2008).
What are the issues?

The issues in the lawsuit of Ms. Liebeck v. McDonald’s Restaurants would include (1) if McDonald’s been negligent by serving hot coffee to its customers?; and (2) if McDonald’s defective product “the hot coffee” was the cause of the injury sustained by Ms. Liesbeck? While the issues in the dry cleaning lawsuit, Pearson v. chung, includes (1) if the dry cleaners observe due diligence in providing services to Mr. Pearson? and (2) if the cleaners purposely deceive Mr. Pearson with their posted signs that reads "Satisfaction Guaranteed", "Same Day Service" and "All Work Done on Premises"?

What law applies?

The applicable law in the hot coffee case will be that of “product liability”, the “tort of negligence”, and the “contributory and the comparative negligence”. According to Bagley & Savage, the definition of “product liability” is the “legal liability manufactures and sellers have for defective products that cause injury to the purchaser, a user or bystander, or their property” (Bagley & Savage, 2010, p.335). The argument for “product liability” is that McDonald’s was aware but still choose to serve their coffee hot and therefore should have foreseen the possibility that their customers could accidentally get burn by spilling the hot coffee on themselves. The jury was further surprised to learned that during the prior ten years, McDonald's had received more than 700 reports of coffee burns ranging from mild to third-degree, and had settled burn claims for amounts up to and exceeding $500,000 (Lexis-Nexis, 2008). I believe that this law applies to the hot coffee case since McDonald’s was the seller of this product. The coffee was manufactured “defectively” due to excessive heat; the high temperature of the coffee presented an unreasonable risk of injury, which indeed was the basis of Ms. Liebeck sustaining a third degree burns (Bagley & Savage, 2010, p.305). . If the McDonald’s product was not defective, Ms. Liebeck might have just suffered a first degree burn, without much damage to her skin.
The “tort of negligence” is also applicable to this case because according to Bagley & Savage, “negligence” is defined as “conduct that involves an unreasonably great risk of causing injury to another person or damage to property”, and it also requires that “all parties take appropriate care in any given situation” (Bagley & Savage, 2010, p.303). In this case, it is evident that the defendant’s conduct created an unreasonable risk of harm to the plaintiff. She sustained a third degree burns due to McDonald’s negligence of brewing its coffee between 180 to 190 degree Fahrenheit (Gerlin, 2002).
In addition to above, both the contributory and the comparative negligence applied to this McDonald’s hot coffee case. According the Bagley & Savage, under the doctrine of “contributory negligence” if the plaintiff is also negligent in any manner, damages cannot be recovered from the defendant; and the plaintiff’s injury would go unredressed. Thus, in order to address the injustice to the plaintiff, most courts have replaced the doctrine of contributory negligence with that of comparative negligence (Bagley & Savage, 2010, p.308). Also, under the doctrine of comparative negligence, the plaintiff may recover the proportion of his or her loss attributed to the defendant’s negligence. The law of comparative negligence is applicable to this law and that was the basis the judge and the jury decided to reduce the compensatory damages awarded to Ms. Liebeck by the 20% of her fault. Otherwise, she could have left the court room devastated by the verdict. In the Pearson v. Chung, also known as the “pants lawsuit”, the applicable law would be the tort of “fraudulent misrepresentation”, also known as “fraud” or “deceit”, which Bagley & Savage states that protects economic interests and the right to be treated fairly and honestly. Relatively similar to the “tort of negligence”, the “fraud” also requires evidence that the defendant either (1) intentionally misled the plaintiff by making a material misrepresentation of fact upon which the plaintiff relied or (2) omitted to state a material fact when the defendant had a duty to speak because of special relationship with the plaintiff. (Bagley & Savage, 2010, p.305). Although these two criteria could not be proven, however, that was the basis of the lawsuit. Mr. Pearson claimed that the “Satisfaction Guaranteed” and “Same Day Service” signs that were displayed in Custom Cleaners required the defendant to honor whatever it takes to make the customer happy (Lexis-Nexis, 2008).

What did the judge and/or the jury decides? In the “hot coffee case”, after the arguments and evidence were heard, the six men and six women jury decided on compensatory damages of $200,000 for her medical costs and disability, which they later reduced to $160,000 because the jury determined that 20% of the fault belonged with Mrs. Liebeck, since she spilled the coffee on herself (Cain, 2008). In addition, the jury found that the defendant, McDonald’s had engaged in willful, reckless, and malicious conduct, which also constituted the basis for punitive damages, and resulted in the jury awarding the plaintiff, Ms. Liebeck, a $2.7 million in punitive damages. The jury arrived at this amount based on the plaintiff’s attorney, Reed Morgan’s suggestion to penalize McDonald’s for the equivalent of one to two days of companywide coffee sales, which was estimated at $1.35 million a day (Gerlim, 2002). However, the judge reduced the $2.7 million in punitive damages to $480,000, which is three times the compensatory amount, and for a grand total of $640,000. Besides, the verdict was appealed by both parties in December of 1994 and was later settled out of court for an undisclosed amount of money (Letric Law, 2011)
In the case of the “pants lawsuit”, after listening to both the plaintiff and the defendant, it was noted that the court was concerned that the plaintiff was acting in bad faith, and the judge resolved some of the issues in the favor of the Chungs, and eventually, both the judge and the jury ruled in favor of the Chungs, awarding them court costs pursuant to a motion that the Chungs later withdrew (Lexis-Nexis, 2008). In addition to the above ruling, Pearson filed a motion for reconsideration of his lawsuit, and claimed the judge “committed a fundamental legal error”, and that the judge had also failed to address his legal claims. Also, due to Pearson’s unethical behavior, and an unbelievably terrible disposition, a D.C. Commission voted against his reappointment as an Administrative Law Judge, and he lost his job of $100,512 salary, which is partially due to his lawsuit against the Chungs (Lexis-Nexis, 2008)

Did the judge and/or the jury make an appropriate decision based on the applicable law controlling the case? Why or why not? Yes, the judge and the jury made an appropriate decision based on the applicable law controlling the case of Liebeck v. McDonald’s Restaurants. The judge and the jury followed all applicable laws governing this case in making their final decision as to who is guilty and not, and how much the plaintiff should be awarded in both compensatory and punitive damages. The compensatory damages of $200,000 awarded to the plaintiff were fair compared to the third degree burns she sustained. However, the application of the comparative negligence doctrine also helped relieve the burden on both the plaintiff and the defendant; great for the plaintiff because if the jury should adopt the doctrine of contributory negligence, Ms. Liebeck would have been awarded zero dollars in compensatory damages; and also great for the defendant because it reduces its liability by the 20 percent deducted from the initial $200,000, which came to $160,000 in compensatory damages. Furthermore, the judge and the jury appropriately applied the tort of “negligence” to this case; Bagley & Savage states that it is a “conduct that involves an unreasonably great risk of causing injury to another person or damage to property” (Bagley & Savage, 2010, p.303). Also, the plaintiff met the necessary criteria to establish liability of negligence against the defendant. (Bagley & Savage further explained that the plaintiff must show the following before liability could be established for negligence: (1) that the “defendant owed a duty to the plaintiff to act in conformity with a certain standard of conduct, to act reasonably under the circumstances”; (2) the “defendant breached that duty by failing to confirm to the standard”; (3) a ”reasonably close causal connection exists between the plaintiff’s injury and the defendant’s breach”; (4) the “plaintiff suffered an actual loss or injury” (Bagley & Savage, 2010, p.303), and I think the plaintiff’s ability to successfully established liability of negligence against the defendant was not over looked by the judge and the jury.
In addition to the tort of negligence, “product liability” is another applicable law to this case that the judge and the jury based their final decision upon, which is the legal liability manufactures and sellers have for defective products that cause injury to the purchaser, a user or bystander, or their property” (Bagley & Savage, 2010, p.335). Since McDonald’s was the seller of this product, and the coffee was manufactured “defectively” due to excessive heat; the high temperature of the coffee presented an unreasonable risk of injury, which indeed was the basis of Ms. Liebeck third degree burns, the judge and the jury weighted heavily on the governing law, saw photographs of the plaintiff’s burns before and after skin grafting, and her weight loss, followed by a two year medical treatment; awarded her $2.7 million in punitive damages, which the judge finally reduced to $480,000 for a combined total of $640,000.
In regards to the Pearson v. Chunge, the pants lawsuit, I think that the judge and the jury made the right decision on this case as well. First, the plaintiff claimed that the cleaners misplaced his pants and sued for an outrageous amount of $67 million in damages; after an outpouring public support for the defendant, he immediately reduced his claim to $54 million and refocused his lawsuit from the missing pants to the removal of window signs that reads “Satisfaction Guaranteed” and the “Same Day Service”. He claimed that he was misled by the signs and that they indeed represented fraud (Lexis-Nexis, 2008). Based on all the inconsistencies from the plaintiff, the judge and the jury found no wrong doings on the side of the defendant’s, thus ruled in their favor, awarding them court costs pursuant to a motion that the Chungs later withdrew.
On July 11, 2007, Pearson made a motion for reconsideration of his lawsuit, and claimed the judge “committed a fundamental legal error”, and had also failed to address his legal claims (Lexis-Nexis, 2008). Moreover, due to his unethical behavior, not only did he lose the lawsuit against the dry cleaners, he also lost reappointment as an Administrative Law Judge, his job of $100,512 salary, because he demonstrated “judicial temperament”, still serving as an Administrative Law Judge (Letric Law, 2011).

What are the ethical issues in the cases? Do the ethical issues differ from the legal issues? If so, how?

McDonald’s behavior with failing to address previous complaints and their unwillingness to deal fairly with the injured patron draws questions on their standards of ethics. Therefore, the evidence led to the conclusion that McDonald’s just didn’t care. McDonald’s had a social, economic, legal and ethical responsibility after seven hundred complaints were made, to at least raise an eyebrow in figuring out what was happening. Regarding Liebeck’s v. McDonald’s case, their legal issues are different from their ethical issues. Their legal issues include that McDonald’s should comply with all applicable laws, rules and regulations of the industry, act in good faith, responsibly, with due care, competence and diligence (Cain 2008). Based on the research, McDonald’s fails to abide by the legal issues of this case which was to abide by all applicable laws, and to act in good faith. It would also have been more mindful of the product liability law that protects injured consumers of any defective product and would have agreed to Ms. Liebeck’s claim of $20,000 if acted responsibly. Also, the ethical issues were to act honestly and fairly to all, which again McDonald’s failed terribly. It is evident that McDonald does not care for its customers based on how it handled the previous 700 complaints and also Ms. Liebeck’s case; thus, their ethical issues differ from their legal issues.
In respect of Parsons v. Chung case, the ethical issue of this case is for the cleaners is to treat all customers fairly and with respect; this the Chungs have demonstrated this act in their mannerisms towards Mr. Pearson. In addition, to the above, their legal issues is be bounded by the content written on the receipt given to their customers and with due diligence, care for the property of their customers. Although the ethical and legal issues, differs, but the defendants was mindful of its commitments to its customers and also treated the plaintiff with due respect, except that they did not fulfill their responsibilities to return Mr. Pearson’s property to him on the due date.

Both of these cases have been described as "frivolous" lawsuits. Based on your research what do you think? Is either one or both of these cases frivolous?

Ms. Liebeck v. the McDonald Restaurants, would be denoted as “case-one” and the Pearson v. Chungs, would also be denoted as “case-two”. Before researching these two cases, both were very frivolous; however, as I progressed in the research process, I realized that case-one is not frivolous in any form. This is a case where a 79 year old woman sustained third degree burns by spilling hot coffee on her body. Ms. Liebeck went through a lot of pain during the initial stage of the burns and even during skin grafting; it took her two years to fully recover after surgery and further treatment. In addition to the emotional and physical torture, she also incurred thousands of dollars in medical bill debt and McDonald’s refused Ms. Liebeck’s claim for $20,000 to cover her actual and anticipated medical and personal expenses. Also, McDonald’s had previously received complaints of more than 700 customers who have sustained some type degree of burns or the other from McDonald’s coffee; it also argued that in their previous coffee cases, the courts have focused more on the person that spilled the coffee, and never had found the product, the coffee itself “defective” because of high temperature (Cain, 2008). After the completion of case-two research, I discovered that this case was very frivolous, and I have not had a change of mind even after I completed the research. It is unbelievably strange that Mr. Pearson, an Administrative Law Judge could stoop so low, trying to fraudulently entangled the Chungs in his web, for the sake of money or fame. This practice should not be encouraged at any level in the nation’s judicial system. The case should have been thrown out of the court on its first day of trial and Pearson’s license should be revoked, sending a firm message across board that such unethical actions should not and never be entertained. It was also interesting to know that Pearson himself admitted that he had only $1,000 to 2,000 in his bank account; that he was going through divorce proceedings; and was also collecting unemployment (Lexis-Nexis, 2008). I am still wondering why Pearson was collecting unemployment? Regardless of what you think of the lawsuits, how could the business owners have prevented them? What advice can you give them for the future?

Ms. Liebeck v. the McDonald Restaurants, would be denoted as “case-one” and the Pearson v. Chungs, would also be denoted as “case-two”. After a thorough research of these two cases, I personally think that in case-one, the lawsuit could have been prevented in two ways: firstly, if McDonald had carefully attended to the 700 previous burns complaints, it would have brewed its coffee at 140 degree Fahrenheit, and served at 130 degree Fahrenheit, in order to avoid any type of burns, such as Ms. Liebeck suffered. And secondly, even after surgery and further treatment, if McDonald’s had agreed to Ms. Liebeck’s demand for $20,000 to cover her actual and anticipated expenses, there would not have been a lawsuit against McDonald’s restaurants. Here are some few advice for McDonald for the future; customer’s complaints should always be a priority; customer’s interest/satisfaction should also be priority; regular customer satisfaction’s survey must be encouraged; it should brew its coffee at 140 degree Fahrenheit and served at 130 degree Fahrenheit; the coffee clutch should boldly reads “BE CAREFUL, COFFEE IS HOT”; and as each attendants serves customers with coffee, especially through the drive-thru, should also inform customers that the coffee is hot. In regards to case-two, after a thorough research, I realized that there has not been any complaint against the cleaners, their customers have always been satisfied, and Mr. Pearson was the only unsatisfied customer. This lawsuit could have been prevented if the Chungs have done due diligence regarding its customer’s interest; the cleaners should have been mindful of pick up time given to customers. The only advice I have for the dry cleaners would be in relations to the pick-up date/time, they should always build in a day or two to accommodate unforeseen circumstances that led to this outrageous lawsuit.

Conclusion

Our legal system has numerous checks and balances and control measures in place that deter and penalize frivolous lawsuits and curb excessive jury verdicts Cain (2008). Stella Liebeck’s lawsuit against McDonald’s and Pearson v Chung generated many strong opinions on both sides of a heated debate about America’s legal system, and it helped give birth to a movement to reduce the number of lawsuits and cap jury awards, called “tort reform.” (Lexis-Nexis, 2008). Both cases provided different examples of how the legal processes at times work to protect both the rights of individual plaintiffs as well as the corporations they sue. I strongly believe that in both cases, the judge and the jury attentively listened to arguments of the two parties, the plaintiffs and the defendants, reviewed evidence provided at the time of trial, considered all applicable laws governing each case and came to a firm decision in favor of the plaintiff in the “McDonald’s hot coffee case”, and the defendant in the “pants lawsuit”.

References

Bagley, C.E. & Savage, D.W. (2010). Managers and the legal environment: Strategies for the
21st century (6th ed.). Mason, OH: Southwestern-Cengage Learning.

Pearson v. Chung, 961 A 2d 1067 (2008) Retrieved from UMUC Library Database LexisNexis http://www.lexisnexis.com.ezproxy.umuc.edu/hottopics/lnacademic/

Liebeck v. McDonald’s Restaurants, CV-93-02419 (1995) The Actual Facts About – The

Mcdonalds' Coffee Case. Retrieved from the Lectric Law Library's Stacks

http://www.lectlaw.com/files/cur78.htm

Cain, G. (2000). The McDonald coffee lawsuit. Journal on Consumer & Commercial

Law. Retrieved from http://www.jtexconsumerlaw.com/V11N1/Coffee.pdf

Gerlin, A. (2000). A Matter of Degree: How a Jury Decided that a Coffee Spill is Worth $2.9

Million. Wall Street Journal. Retrieved from

http://en.wikipedia.org/wiki/Liebeck_v._McDonald's_Restaurants