Table of Contents
Question 1
McDonald’s observers are little to no precaution regarding the safety of their beverages. The company, informed by customer and food experts pursued a policy of serving coffee at near boiling point of water for better taste with little to no regard of the potential damage such hot fluids could inflict on their customers (Baines, Fill and Rosengren 59). The company displayed little to no sympathy towards Ms.Liebecks suffering and initially refused any sort of an out of the courtroom settlement. The behavior of McDonald’s was appalling given that the company had received around seven hundred instances of similar incidents and having to send five hundred thousand dollars on the same.
McDonald’s as evidenced by their treatment of Ms.Liebeck’s case displayed indifference and contempt. Before the trial, McDonald’s offered a settlement of a paltry eight hundred dollars as opposed to settling Liebeck’s medical bills (Dedman 5). Consumer law require the seller of any given item to ensure the safety of their consumers and renders them culpable in the event of any negligence found on the seller’s part. The experts of McDonald’s testified before the court that the company was well aware of the risks posed by the hot beverages to consumers but prioritized the quality of the product due to the competition and demand. McDonald’s also dismissed the incidences of their coffee causing injuries as insignificant in comparison with the number of cups sold in a day. The jury’s findings found the firm culpable further supporting this assertion.
Ms.Liebeck’s was also not very precautious in handling the hot beverage. With the provisions of cup holders in contemporary motor vehicles, it was careless for her to have placed the drink between her legs to add sugar and cream (Elliott and Quinn 25). That notwithstanding, the temperatures at which the beverage was served were too hot to be considered safe, and no amount of precaution could completely eradicate the risk of injury. The human specialist in the case demonstrated that despite the complainant careless behavior, such hot temperatures made the beverage unsafe for the purpose it was intended for, to be consumed while on the move. It can, therefore, be argued that the complainant though careless, was using the product as it was purposed to be used.
Question 2
McDonald’s contempt and indifferent attitude towards the complaints filed against it illustrated that the company deserves the punitive damages beautiful it was initially fined by the jury. The refusal of McDonald’s to cater for the medical charges of Ms.Liebeck illustrate the trivial outlook of the company towards such cases (Dedman 6). Despite threats of litigation the company only offered to settle eight hundred dollars to the complainant which is insulting given some revenues realized by the company and the medical costs incurred by Ms.Liebeck’s. The company illustrated indifference towards the case, going as far as resisting the directive to issue warnings on the Styrofoam cups it sells its beverages.
Given the company’s indifference despite the recurring nature of injuries to its consumers, it may be argued that the company deserves punitive damage costs to act as a deterrence and lesson for the business. It is noteworthy that the seven hundred complaints may not be representative since such cases were likely to go unreported (Dedman 2). The company also illustrated indifference and willful ignorance to the danger posed by its products to the consumers. The law is clear on the penalties such a firm is culpable to get if found guilty. The bill seeks to protect consumers from profiteering and the selling of dangerous products with little regard to consequences. For instance, the government and general population are bound to incur costs in medical bills and health insurance to cater for the burns and injuries caused by such hazardous products.
The evidence presented at the trial illustrated that the company in question failed to appreciate the damage it had caused as a result of their products. McDonald’s quality control manager made it clear that the primary goal of the company was to serve the best tasting beverage at the cost of safety (Dedman 3). Despite their apparent preference for dispensing coffee at high temperatures, didn’t take it upon themselves to warn their customers to handle the beverage with caution, thereby leading to inadvertent injuries. The company is therefore culpable for the punitive damages penalties.
Question 3
Given the costs incurred in litigating against any corporate entity, individuals may be deterred from pursuing legal means of settlement, providing a given offender a window to continue consumer fraud and negligence (Hager, McLaughlin and Miltenberg 40). Therefore it is so that, in the event, a given corporate offender is found culpable, punitive fines are instituted to deter negligent behavior and or fraud. Corporate supporters and scholars have argued against the disciplinary penalties, claiming by an optimum occurrence of fraud or negligence issues. Such an argument has been disapproved in several court cases where it was argued that such instances should not happen at all.
The Liebeck versus McDonald’s case has various pointers to justify the punitive fines that were charged against the company. The contempt to which McDonald’s treated Ms.Liebeck when she asked for medical compensation illustrates the ignorance to the plight of its customers. Despite only being asked to take care of the medical bills, amounting to eleven thousand dollars, the company just offered eight hundred dollars which were derogatory and in bad faith. This act alone warrants punitive fine for their arrogance despite being in the wrong.
As testified by the company’s officials, the company knowingly ignored the dangers posed by their product to their customers. The company had in place a policy that required their staff to serve coffee at temperatures near boiling point to enhance the taste of their product. It was testified that such temperatures could cause third degree burns in case of an accident, McDonald’s employees also admitted to being aware of this fact and not placing the appropriate warnings on the packaging to warn customers of the hazards posed by the beverage (Dedman 17). The company also admitted to serving hot drink as coffee at the temperature they helped was likely to cause throat and mouth if consumed. All these actions show that the company was culpable to punitive damage penalties.
The supply and demand seems to be the underlying principle of any enter prince. One needs to study the market behavior to understand the perfect entry point for any startup. For a business to remain relevant it needs to master the trends in the market making sure its products are as per the customers taste and preference. Competition has ensured that the customers can now access quality products. The McDonald’s team were scared by the competition and used or means to ensure they remain in business at the expense of the consumers health.
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Question 4
Punitive damage laws are meant to deter excessive corporate negligence and consumer fraud. Although such rules are put in place to punish wrongdoings by corporate entities, the regulations may be used by individuals to harass companies and gain financially. Some states have a requirement that the punitive damages are to be shared proportionately between the plaintiff and the state.
While these laws are backed by the best interest of the public and the economy, they may be used by either the companies or the individuals for low gain (Hager, McLaughlin and Miltenberg 16). For instance, the division of punitive damages between the state and the plaintiff ma decentivize the litigation especially in the cases whereby the plaintiff incurs massive litigation and or other costs. For example, the plaintiff may be less willing to follow on the lawsuit if the costs they incur are higher than the punitive damages they may receive.
The collaboration of the general public and the state may lead to numerous frivolous lawsuits against corporations to benefit financially. It has been argued that such laws may bias the judicial departments to rule against corporate entities for more funding since the punitive damage cash goes into the government coffers (Elliott and Quinn 25). It is also worth noting that the state does not contribute or assist the plaintiff in any way in organizing for and arranging for the litigation.
Thus, tort reform advocates have argued that the current laws unfairly target American businesses and make the operating environment uncompetitive.However, punitive damages are an economically sensible way of deterring negligent conduct by companies as illustrated in Liebeck’s case. For these reasons, punitive damages are beneficial to the overall economy. This is to ensure that corporations carry out business with the interests of both the economy and the consumers at heart. Given the costs incurred in litigating against any corporate entity, individuals may be deterred from pursuing legal means of settlement, providing a given offender a window to continue consumer fraud and negligence. Therefore, it is clear that the set laws and standards are necessary to deter corporate excesses.
- Baines, Paul, Chris Fill and Sara Rosengren. Marketing. Oxford: Oxford University Press, 2017.
- Dedman, Jim. “The Stella Liebeck McDonalds Hot Coffee Case FAQ.” Abnormal Use. 25 January 2011. Website. 8 November 2015.
- Elliott, Catherine, and Frances Quinn. Tort law. Harlow: Pearson Longman, 2017. Document.
- Hager, Mark McLaughlin, and Ned Miltenberg. Punitive damages and the free market: law and economics. New work: Academic OneFile, 2015. Document.