Here's the best account I've found, compiled from the WSJ and Newsweek:
On February 27, 1992, Stella Liebeck, her son Jim and her grandson Chris Tiano left Santa Fe at dawn to drive to the Albuquerque airport to drop off Jim for an early flight. Stella, 79 years old but "quite spry," had just retired from a long career as a department store sales clerk. After leaving the airport, Stella and Chris, who was driving, stopped at a McDonald's drive-up window for breakfast. After they had received their food, Chris pulled over and parked the car so Stella could add some cream and sugar to her coffee. She looked for a place to set the coffee cup down, but there was no cup-holder in the Ford Probe and the dashboard was slanted. Since both hands were needed to remove the lid and add the cream and sugar, she placed the coffee cup between her knees to keep it secure while she removed the lid. While she was attempting to remove the lid, the coffee spilled into her lap.
She screamed as the scalding coffee soaked into and through her sweat suit and scorched her skin. Chris leaped from the car to help. She yanked at her sweat suit and squirmed in the bucket seat, in excruciating pain. Chris raced her to the emergency room, but by the time they arrived severe third-degree burns had spread across her inner thighs, buttocks, groin and labia. Third-degree burns are "full thickness" skin burns that char and blacken the skin and permanently destroy the skin and nerves. Stella remained in the hospital for seven days, went to her daughter's house for three weeks to recuperate, and then returned to the hospital for skin grafts. The grafts were almost as painful as the burns, her daughter said. "She was in tremendous pain; I didn't know if she'd survive this." She had lost 20 pounds, which brought her weight down to only 83 pounds, and was practically immobilized. She was disabled for two years and has permanent scars over 16 percent of her body.
Stella had never initiated a lawsuit and was not looking to initiate one now. However, she and her family thought McDonald's should pay $15,000 to $20,000 to cover her daughter's out-of-pocket expenses (which were about $2000) and wages lost while staying home to take care of her and to reimburse Medicare for over $10,000 of medical expenses. About six months after the accident, Stella's daughter wrote to McDonald's to request reimbursement for these items and to ask that McDonald's lower the temperature of its coffee. Although McDonald's had previously settled many claims by other coffee burn victims for amounts up to and exceeding $500,000, it offered Stella and her family only $800.
While she had been recuperating in her daughter's house, Stella had met a Santa Fe couple who had formerly lived in Texas. The couple knew a Houston attorney, Reed Morgan, who had litigated a coffee-burn lawsuit against McDonald's in 1986 on behalf of a woman in Houston who had also suffered third-degree burns. In that case, Mr. Morgan had had a survey taken of coffee temperatures at 20 McDonald's restaurants and 18 other fast-food restaurants such as Dairy Queen, Dunkin' Donuts and Wendy's. Nine of the 12 highest readings were from McDonald's restaurants. Mr. Morgan also deposed Christopher Appleton, a quality-assurance manager at McDonald's headquarters, who said "he was aware of this risk . . . and had no plans to turn down the heat." McDonald's settled the Texas case for $27,500.
Having had her request for minimal compensation rebuffed by McDonald's, Stella and her family contacted Morgan to have him file a lawsuit against McDonald's for her medical expenses and pain and suffering. Morgan had a survey taken of coffee temperatures at numerous fast-food restaurants around Albuquerque, which indicated that other restaurants all served their coffee at least 20 degrees lower than the approximately 180 degrees at which McDonald's served its coffee. He also obtained McDonald's operating and training manual, which requires its coffee to be brewed at 195 to 205 degrees and held at 180 to 190 degrees for optimal taste.
Morgan offered to settle the case for $300,000, and said later he would have taken half that, but McDonald's did not want to settle. A court-appointed pre-trial mediator, a former judge, recommended that McDonald's settle for $225,000 and said that a jury would be likely to award that amount. McDonald's lawyer did not show up for the mediation, and McDonald's rejected the mediator's recommendation.
Before the trial began, the jurors' thoughts about the case were pretty much the same as those the media and public subsequently had after the verdict became known. The jury foreman, Jerry Goens, said he "wasn't convinced as to why I needed to be there to settle a coffee spill." Juror Roxanne Bell said "I was just insulted. The whole thing sounded ridiculous to me." Juror Betsy Farnham said she also had thought that the suit was frivolous.
But that was before they saw the gruesome photographs of Stella's charred skin, learned of her seven days in the hospital and the subsequent skin grafts, and heard testimony from Dr. Charles Baxter, a renowned burn expert from Southwestern Medical School in Dallas, that coffee at 170 degrees would cause second-degree burns within 3.5 seconds of hitting the skin. Juror Jack Elliott went home and told his wife and daughters "don't drink coffee in the car, at least not hot."
The jury was informed that McDonald's operations and training manual required its coffee to be brewed at 195 to 205 degrees and held at 180 to 190 degrees for optimal taste, and that this was 40 to 50 degrees hotter than coffee made at home. A McDonald's expert argued that any coffee hotter than 130 degrees could produce third-degree burns, so it did not matter that McDonald's coffee was hotter. But a plaintiff's expert testified that lowering the serving temperature to about 160 degrees could make a big difference, because it takes less than three seconds to produce a third-degree burn at 190 degrees, about 12 to 15 seconds at 180 degrees, and about 20 seconds at 160 degrees. According to Stella's son-in-law, McDonald's experts "admitted the[coffee] was too hot for consumption when sold. They did not contest the fact that it took 25 minutes to cool to a drinkable temperature."
Morgan wanted to introduce photographs of the third-degree burns caused by McDonald's coffee that had been suffered by his previous Houston client, as well as photographs of a California woman's second- and third-degree burns that occurred in 1990 when a McDonald's employee spilled hot coffee into her car (the latter case was settled for $230,000). McDonald's lawyer, Tracy McGee, objected: "First-person accounts by sundry women whose nether regions have been scorched by McDonald's coffee might well be worthy of Oprah," she wrote in a motion to the judge, "ut they have no place in a court of law." The judge excluded the photographs and the injured women's testimony, but allowed Morgan to mention the cases.
The jury was further surprised to learn 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. (Although it is not clear whether it was part of the trial record, the Shriners Burn Institute had complained to the fast-food industry about the serious scalding injuries caused by super-heated coffee.) Christopher Appleton, the McDonald's quality-assurance manager who previously had been deposed in the Texas case, testified that despite the complaints and despite knowing that its coffee was causing serious burns when spilled, McDonald's had not consulted burn experts and had no plans to change any of its coffee policies or procedures. "There are more serious dangers in restaurants," he said. He noted that McDonald's consumer surveys indicated that people like their coffee very hot. He acknowledged that most people would not realize that severe burns were possible with coffee that hot, but stated that McDonald's had decided not to warn its customers about this possibility. (McDonald's had a tiny Caution: Contents Hot label on its cups, which did not impress juror Betty Farnham, who said that she needed her glasses to read it.)
McDonald's safety consultant, Robert Knaff, a human-factors engineer, asserted that 700 complaints, which was about one for every 24 million cups of McDonald's coffee sold, was "basically trivially different from zero." He also misspoke: "It's just that a burn is a very trivial thing - [I mean] a burn is a very terrible thing."
By this time the jurors' views of the case had shifted radically. "Each statistic is somebody badly burned," said juror Betty Farnham. "That [dismissing them as statistically insignificant] really made me angry. There was a person behind every number and I don't think [McDonald's] was attaching enough importance to that." Juror Jack Elliott said he began to realize that the case was about "callous disregard for the safety of the people."
In her closing argument, McGee, the defense lawyer, acknowledged that McDonald's coffee was hot, but argued that was how customers wanted it. She insisted that Stella had only herself to blame. She should not have put the cup between her knees. She should have leapt out of the bucket seat immediately after the spill and removed her clothes. She also argued that the injury was so severe due to Stella's age, since older skin is thinner and thus more vulnerable to injury. "The real question," McGee concluded, ". . . is how far you want our society to go to restrict what most of us enjoy and accept."
The jury took only four hours to reach its verdict. "The facts were so overwhelmingly against the company," said Betty Farnham. "They were not taking care of their consumers." Farnham, who had started the case thinking the suit was frivolous, pushed for a total award of $9.6 million. The jury fixed Stella's actual damages for medical bills and pain and suffering at $200,000, which it reduced to $160,000 after determining that she was contributorily negligent and bore 20% of the overall responsibility for her injury. It also found that McDonald's had engaged in willful, wanton, reckless or malicious conduct, as required for an award of punitive damages. Adopting Morgan's suggestion that punitive damages be assessed equal to one or two days' worth of McDonald's coffee sales, which Morgan estimated to be $1.35 million per day, the jury awarded Stella $2.7 million in punitive damages. "It was our way of saying, 'Hey, open your eyes. People are getting burned'," juror Bell said later.
The trial judge, who, like the Liebecks, was a self-described conservative Republican, agreed with the liability finding, but a month after the verdict he reduced the punitive damages to $480,000 - three times the compensatory damages. He too wanted to let McDonald's know that it "was appropriate to punish and deter" its corporate coffee policy. "This was not a runaway [jury]," he told Newsweek, "I was there." After some additional post-trial maneuvering, the parties settled the case for an undisclosed lesser amount.
