The poster child case for tort reform is the McDonald’s restaurant hot coffee case in which a jury in New Mexico awarded 2.7 million dollars in punitive damages against McDonald’s for serving very hot coffee to an elderly woman. Many viewed the case as a prime example of a jury system and a tort-law system that were out of control.

The facts present a different story. 79-year-old Stella Liebeck drove through a McDonald’s drive-thru lane in Albuquerque, New Mexico. She ordered coffee. When she stopped to add sugar and cream to the coffee, it spilled on her. She suffered several third-degree burns, had skin-graft surgeries and stayed in the hospital for more than a week.

She asked McDonald’s to pay for her hospital bills of about $11,000. McDonald’s refused to pay. She then contacted a Houston attorney Morgan Reed, who made a request for $80,000 for medical expenses and pain and suffering. McDonald’s offered $800.

Liebeck then sued. The case proceeded to a jury which heard evidence that McDonald’s had more than 700 complaints of burns from its hot coffee, which reached temperatures of up to 190 degrees. McDonald’s, however, ignored these complaints and refused to lower the temperature of its coffee.

A jury awarded Liebeck $200,000 in compensatory damages. The jury also found Liebeck 20 percent at fault so that reduced her compensatory damage award down to $160,000. The jury also awarded Liebeck $2.7 million dollars in punitive damages, but the trial judge reduced that award down to $480,000.

The parties later settled the case for an undisclosed amount. After the case, McDonald’s has a prominent sign at its stores warning customers that its coffee and hot tea are “VERY HOT!”