Mike tells Sarah how a tragic story became a national punchline and a decades-long moral panic. Digressions include a sympathetic psychic, a paternalistic principal and a manure mishap. Mike appears to be unaware of the difference between a cousin and a nephew.
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Sarah: By the way I have this idea for a companion show for Million Dollar Listing, it's for half a million dollar listings in cities like Seattle and Portland. And it's called, “For That?”
Welcome to You're Wrong About, the show where we always end up back at McDonald's. I feel like we’ve gone back to McDonald's a few times in this show.
Mike: Yeah. This is our McRib episode. I am Michael Hobbes.
Sarah: I am Sarah Marshall.
Mike: And today we are talking about, finally, the McDonald's hot coffee case.
Sarah: And why do you say finally, my friend.
Mike: This is our Freebird. This is the thing that we get requests for probably three to five times a week.
Sarah: I don't think literally the first topic suggests we ever got, but it had to be in the first five.
Mike: And it's also, we have talked about this, that this is one of the cases that inspired us to do this show.
Sarah: That's true.
Mike: It is one of the cleanest examples of a huge, you're wrong about in our lifetimes.
Sarah: And I think that I first heard about this, I know it was a media sensation and like the late mid-nineties, I want to say ‘96.
Mike: The verdict came down in ‘94.
Sarah: And I know that this was an event that was directly parodied on Seinfeld, which I think is a litmus test for cultural relevance. And the Seinfeld version is that Kramer is going to a movie theater and he's trying to smuggle in a cafe latte, and he jostles it somehow and it burns his leg. And he's like, I'm going to Sue the coffee company because the coffee was too hot. And what a ridiculous thing to sue anyone for making hot coffee hot, it's supposed to be hot. And all of this was based on a case where there was this elderly woman named Florence Liebeck.
Mike: It's actually Stella Liebeck.
Sarah: Stella. Why do I think her name's Florence? Is there a Florence Liebeck?
Mike: I think you're thinking of Florence in the coffee machine.
Sarah: All right. Stella. That's great. What a great name. Who went to the McDonald's drive-through, and she ordered a hot coffee and it spilled somehow, and she got burns from the coffee and she sued McDonald's. And the way the story went was that McDonald's had given her like 30 trillion dollars. And there was this sense of well, what next? Why doesn't everyone sue every large corporation for a lot of money for a product behaving in a predictable way?
Mike: The term that you heard a lot at the time was ‘jackpot justice’. This idea that people are doing these completely normal things, we've all spilled coffee on ourselves, and blowing them up into these “oh, my life was never the same after I spilled a warm cup of coffee on myself”. It's the juxtaposition between this completely every day normal thing that happens to everybody and the massive settlement that this woman got by suing McDonald's.
Sarah: And then also I feel like maybe this isn't true, but my understanding was that it was because of this, but like whenever you get a beverage from anywhere still today, if it's hot, it'll say like caution contents, hot.
Mike: That's actually an urban legend because the coffee that Stella Liebeck spilled on herself actually said, caution hot on it. But the letters were the same color as the cup.
Sarah: Interesting. I guess my mom was not going to the library to fact check the explanatory things she told me when she was in a hurry in the morning in 1997.
Mike: So going to get to the debunking of the McDonald's case eventually, but I think that a really important aspect of the case and why it became such a big deal and showed up on Seinfeld and everywhere else was, because there was already a cultural narrative for that anecdote to fit into. If it was just this story and there was no sort of ongoing panic about frivolous losses, it would have been a blip in the newspaper and then it would have disappeared.
Sarah: We had no problems in the nineties. We were like, eh, what are we worried about today?
Mike: Exactly. It's too easy to sue corporations.
Sarah: I understand that this would be something that would be easier to be upset about when it was possible in America to make money by working. But even still.
Mike: So we're going to rewind a little bit. I want to start with, do you remember those calendars that will be like a wacky story of the day calendars or Chef John's bathroom reader or whatever?
Sarah: Oh yeah. And they were always on sale and the impulse buy area of Barnes and Noble. And you know, what I loved about those was those gummy strips at the top.
Mike: We used to call them booger glue.
Sarah: Boys are gross.
Mike: So if you're a youth, you probably don't know about these things, but there were these sorts of daily calendars that people have. We had one on our kitchen table that was like the wackiest laws in America. And every day you'd rip off one and it would be like, it's illegal to bathe your ferret on a Wednesday in Alabama or whatever.
Sarah: The Oregonian had this little thing called The Edge on the living section. It was like the left-hand quarter edge of the front page of the living section and then I had little facts.
Mike: One of the most popular genres of those you'll never believe what's happening in America type of calendar, bathroom, reader, joke things was crazy lawsuits.
Sarah: That makes total sense and also do you remember also stupid criminals as a category? It would be like, a Robert in Switzerland tried to hold up a bank using us sausage.
Mike: Exactly. And looking back, most of them were really fake.
Sarah: I was 11 and they all seemed very real.
Mike: At the time I was not remotely skeptical. So we are going to start with an excerpt from a wacky lawsuits calendar in 1986.
Sarah: This is taking me back.
Mike: This is an example from a really good book called Distorting the Law: Politics, Media, and the Litigation Crisis by William Haltom and Michael McCann. Here's the excerpt, “Judith Haimes, a self-proclaimed psychic, was awarded close to $1 million by a Philadelphia jury in March 1986 after she said that a CAT scan at Temple University hospital made her lose her psychic abilities.”
Sarah: Yeah, that sounds like good living section fodder.
Mike: This is eight years before the McDonald's hot coffee case, but this kind of was the McDonald's hot coffee case of the 1980s.
Sarah: Are you going to You're Wrong About me about this story?
Mike: Oh yeah. This is not true. And we will debunk it, but there were numerous stories in the LA Times, there were numerous stories in the New York Times. This story shows up in a Ronald Reagan speech. This was like one of his laugh lines. He's like, “Did you hear the one about the psychic who lost her powers and then she sued?” This was just floating around the culture for ages.
Sarah: Like a conservative, urban legend.
Mike: Yes, exactly. But it's worth noting that even in 1986, there's already a narrative that this anecdote can slot into. All of this goes back to what was called the ‘tort revolution’. Basically from the end of World War II until the 1970s is this time of very ambitious, progressive change in America. We get the national traffic and motor vehicle safety act of 1966. We got the consumer product safety act in 1972.
The Warren court starts passing a bunch of very arcane and weird procedural things that make it much easier to sue companies. This whole field of consumer product safety, the idea that companies are responsible for the harms that they do, was reasonably new at the time. And so as we started getting books like Silent Spring, we got Unsafe at any Speed. There's just this kind of cultural understanding bubbling up about what if people aren't responsible for things that corporations do to them.
Sarah: I feel like there was a time when Americans wanted the government to protect them from corporations, and now we want corporations to protect us from the government.
Mike: Exactly. And these damn sophomores that keep shouting about stuff. There's also at this time, I don't think anybody was really aware of it, but America ended up making this pact that this was how we were going to regulate corporations. In a lot of other developed countries they have regulators, they have very powerful regulators that do inspections. They can, by law, force companies to change their practices. They can give payouts to people that are damaged by corporations. None of that really took in America. None of our regulatory agencies ever had that much power. So we basically decided we're going to do this by lawsuits.
Sarah: So basically, it's like, have a wide range of freedoms. And then if people violate those freedoms, then we punish them. Rather than have a relatively narrow range of freedoms to ensure that bad behavior won't flourish.
Mike: Exactly. And it's not the government's job to monitor companies. If companies are doing something bad, the idea is, well, the people who are harmed by that will sue. And then the punitive damages will be so large that the companies will have to change their practices.
Sarah: And it will all be a swift process and none of that will get complicated and it'll be great. It'll all be great.
Mike: I don't think this was deliberate at the time, but there's lots of articles written now about how America has far more lawsuits than most other developed countries and far more lawsuits against corporations.
So there was infamously a lawsuit a couple of years ago against Nutella because Nutella was marketing its product as healthy and people were saying like, no, it's not healthy. There's this class action that forms. And then the class action wins. And then if you bought a jar of Nutella between August and December of 2008, go to the store and you get your $4 back. In other countries, that would be a regulatory agency who's just like, hey, your marketing is lying. You can't do this. You have to stop. But in America it's oh, a bunch of people get together, all of whom have this like small level of harm and directly get the company to pay out. That's how we decided to do it.
Sarah: This makes me think about what we talked about in our white collar crime episode, which is basically that it seems like we don't really enforce this kind of thing unless we're making an example of somebody.
Mike: Yeah, exactly. So as we have seen a million times on this show, anytime we have these periods of progressive change, we then have an equal and opposite period of reactionary backlash.
So starting in the 1970s companies started complaining about we’re becoming an overly litigious society. It's too easy to take companies to court for any old thing. There are actually ad campaigns on TV in the 1980s. This is an excerpt from Distorting the Law, “Other paid ads featured staged photos of empty swimming pools, defunded sports teams, and children's organizations. A bumper sticker read, ‘go ahead, hit me. I need the money’”.
Rick Pearlstein has a very good chapter of his book, ReaganLand about this. This was basically the period when corporations realized they could start these fake NGOs and make them seem like they're grassroots. Citizens for Consumer Freedom or whatever. And then you look at the funders and it's all like Halliburton and Monsanto and stuff.
Sarah: I'm sure they do great work.
Mike: So during the 1970s, the corporations set up something called the American Tort Reform Association, and there's something called Citizens Against Lawsuit Abuse. And one of the most effective tactics for this is they start cherry picking anecdotes. At the time this was pre-internet, right? So you can't just sit down and read the Kansas City Star if you live in Portland. So what these “grassroots” NGOs start doing is they start combing all the national newspapers, looking for the silliest lawsuits, right. And just plucking these random anecdotes out. And then they'll put together a digest at the end of year, they'll send them out as press releases, just hammering home this idea that you'll never believe what people are suing about.
One of the things that drove me nuts about researching this episode is that a lot of the McDonald's hot coffee stuff and other really, really bad cultural understandings come from like late night monologue jokes. And there's no central repository to look them up. You can't find what was Jay Leno saying about the McDonald's hot coffee case?
Sarah: We really need better. Someone, somewhere, please. And also tabloids.
Mike: So one of the few Jay Leno jokes that I came across was from 1997. I'm going to read it to you. I'm not going to do the voice. “Here's another reason why Americans hate lawyers. A man in suburban Seattle is suing the dairy industry because he's become addicted to milk, and it has raised his cholesterol to dangerous levels. The government should have warning labels on the milk, in fact, this is the proposed warning label warning. ‘Too much milk can make you a frivolous lawsuit filing moron’.” Okay. Jay Leno, great stuff.
Sarah: The joke is that it's mean, he's being mean.
Mike: This is all later. But what's interesting about this joke and about it showing up on Jay Leno is that this is one of the anecdotes that's plucked out of obscurity by the American Tort Reform Association.
Sarah: This is exactly why we started doing this show, because culture has always been steered by just like this kind of a thing. And it's just so frustrating.
Mike: So all of this is happening long before the McDonald's hot coffee case, and even before the story of this woman who gets her cat scan and loses her psychic powers.
Sarah: It's basically like she does something that's very useful to an ever churning mill that needs pebbles of her exact size.
Mike: So do you want to know what actually happened to her?
Mike: So the basic facts of that little factoid are roughly true. Her name is Judith Haimes. This happened at Temple University Hospital. She came in for a CAT scan. And so before you get a CAT scan, one of the things they do is they inject you with something called contrast material that just makes it easier to see your body, the rays, the CAT rays bounce off of it or something. And so the doctor is about to inject her with this dye, and she says, “Hey, I'm a little uncomfortable. I've actually had allergic reactions to iodine based dyes before. So can you give me a dye that is made of something else or not give me a dye”, something like that. The doctor basically says, LOL, there's no such thing as an allergy to these dyes, these dyes are fine.
And then eventually the doctor talks her into giving her some, so they inject it into her arm and all of a sudden, she just gets searing pain. She collapses to the floor, basically has some sort of a seizure. She never gets the CAT scan. For days afterwards she's puking and just has these continuous headaches. What she says is that for years, basically for the rest of her life, whenever she does like deep concentration, she has to really think about something deeply, she gets these splitting headaches.
Sarah: Oh that’s terrifying.
Mike: I know, right. It is true that she was working as a psychic. She would give consultations to people, and she would do, apparently, she'd do police psychic work. It's not that she loses her psychic powers, it's that she can't concentrate. As soon as she tries to concentrate and do what she considers to be like hearing the psychic spirits, she gets this awful headache.
Sarah: Right. She's lost income.
Mike: Yeah, exactly. It’s like I lost my income due to this very straightforward medical error. In the sort of the calendar wacky lawsuit version, she gets a million dollars from a jury, which is true. She got $986,000, but it's immediately overturned on appeal. The judge basically overturns it because he doesn't like it. He calls it grossly excessive. And then he orders a new trial. And then at the new trial, her claim is denied. So not only was the CAT scan making her lose her psychic powers thing not true, but she didn't get any money for this.
Sarah: She got to be a factoid.
Mike: It also falls into this thing of anyone will sue each other over anything these days. But Judith actually waited eight years to sue. The only reason she eventually sued was because her son died in a car accident and she was convinced that if she still had her psychic power, she could have foreseen it. It’s just this really sad story of a woman with a disability and a dead son.
Sarah: I feel like we’d rather live in a world where people are crafty and successfully self-interested rather than just sad and desperate and still without any money. Because that's going to be us baby!
Mike: Essentially the only reason why poor Judith’s story falls out of these trash trend stories about frivolous lawsuits is because of the McDonald's hot coffee case.
Sarah: So she was like, thanks, Stella.
Mike: I know we have a better one now. Okay. So now we're going to talk about the actual McDonald's hot coffee case. We're actually not going to spend that much time on this because I feel like most people know what happened at this point.
Sarah: We've lured you in with a fraudulent anecdote.
Mike: That’s the thing. There’s the hot coffee documentary, Swindled has a really good episode about it. Adam Ruins Everything has a really good episode. There's various YouTube videos debunking it. It's one of the only stories we've covered where the You're Wrong About version is almost as commonly known as the fake version at this point. So do you want to just walk me through what actually happened? The debunked version of the McDonald's hot coffee case?
Sarah: My understanding is that Stella Liebeck was living independently and doing quite well for a woman of whatever her age was before this happened. And then she was given coffee that was extremely hot and that it scalded a significant percentage of her lower body. And then she was awarded this money. And then as happens, I think typically in these cases it was immediately reduced to something much less. And also, it's well, when you've just suffered this debilitating injury, then you do need money for medical care. And you're probably not seeing any of it as profit. And even if you are, pain and suffering is a real thing. And I feel like a lot of this comes from American’s just absolute staunch refusal to believe in the concept of trauma.
Mike: And also just the reality that when something like this happens, somebody has to pay. And the question is well, should Stella Liebeck pay for her medical bills? Or should the corporation pay for her medical bills?
Sarah: I remember that what she was awarded originally was like the amount of profit that McDonald's derived from a day of hot coffee sales.
Mike: Two days.
Sarah: Two days. Okay. Oh my God. Two days. Oh no. When you put it that way, so much of statistics and numbers has to do with the context that you put it in, I think. We often react how we're being encouraged to react. And if you put it that way, it's well, come on.
Mike: It's really hard to see the grave injustice that was done in this case. So the basic facts of the case, Stella Liebeck is 79 years old at the time of the accident. She is a retired department store clerk. This is one of the first details to go when this hits the national media, she's a lifelong Republican. She's a pull yourself up by your bootstraps, person. She's not a,’ I filed a lawsuit against this and I'm a lib’ who wants to change society. She's a pretty conservative lady.
Sarah: Conservative ladies need skin grafts too, it turns out.
Mike: Exactly. So it is February 27th, 1992. It is Albuquerque, New Mexico. She is in a Ford probe with her grandson, Chris.
Sarah: The Albertville Olympics have just concluded, what a time.
Mike: And they pull into the drive-through, they order a cup of coffee, Egg McMuffin. They pulled directly into the parking lot. This is a time before cup holders in cars, right?
Sarah: What? They didn’t have cup holders?
Mike: There's some good Galaxy Brain articles that are talking about how many third degree burns have been prevented by cup holders versus lawsuits.
Sarah: People have been drinking coffee in cars since the 1920s.
Mike: So she has her hands full of Egg McMuffin. She doesn't have any cup holders. She puts this cup of coffee that she bought 30 seconds ago in between her legs and she’s wrestling with the lid to get it off because she wants to put milk and sugar in it. She yanks a little too hard, the lid comes off with the coffee cup and also flips over. The coffee at the time was 190 degrees. It's basically boiling. And also very importantly, she's wearing sweatpants. So the coffee immediately soaks into the sweat pants, and then the sweat pants hold it against her skin. And so she starts screaming like her grandson has never heard before. He, like the first of millions of people to do this, thinks that she's overreacting at first.
Sarah: Oh my God.
Mike: But then she starts to get nauseous, and she passes out from the pain, and that's when he realizes that it's really bad. So he gets her out of the car. He gets her sweatpants off. They have towels or something in the trunk. He wraps her lower body in a towel, and they go to the hospital.
Sarah: It's the entire contents, that's the thing. I once spilled some tea on myself out of a mug that was pretty well insulated, and it soaked through some layers. And I remember being shocked that I had this tiny little patch that got like the full strength of the hot tea on it that I had just made. And I had a scar from that for a couple of years, I think.
Mike: Have you seen the photos of Stella's injuries?
Sarah: Oh yeah.
Mike: Can you describe them?
Sarah: You just see basically an injury that has the power to basically rob you of health for the rest of your life.
Mike: No one who's ever seen these photos would ever make a McDonalds lawsuit joke ever again.
Sarah: They look like shark attack photos.
Mike: Truly. And her doctor, when she gets to the hospital, he later says that it's the worst burn case he's ever seen.
Sarah: Oh God.
Mike: And this is one of the things that really turned me around on the hot coffee case. Because of course I believe the mythic version that I heard as a teenager. She spends a week in the hospital, they're so severe.
Sarah: I was shocked that it was only a week, honestly, based on everything you've said.
Mike: Well, this is the thing it actually should have been longer, but she couldn't afford to stay in the hospital. So she basically went home and then her daughter had to take all this time off work to drive her to and from the hospital for skin grafts, which apparently are very painful.
Sarah: And it's so funny because in America, well, the three categories of people I would say who we profess to love the most are like babies, moms, and grandmas. And then when we have to really put our money where our mouths are, we're like, “Fuck that grandma. She deserves to live the rest of her life in pain. How dare she sue McDonald's.”
Mike: So she goes home. She's never sued anybody in her life. She's not thinking of this as like a legal case. She writes a letter to McDonald's, which says it seems to me that no person would find it reasonable to have been given coffee so hot that it would do severe damage to my skin. It seems that the reasonable expectation for a spilling accident would be a mess and a reddening of the skin at worst. Although I did the spilling, I had no warning that the coffee was that hot. It should never have been given to a customer at that temperature, which is pretty reasonable.
Sarah: Yeah. I agree. It doesn't need to be that hot. That's too hot. I feel like a lot of the jokes were like, she was suing because the coffee was hot, but she should have known that. And it's like, listen, there are different kinds of hot, aren't there?
Mike: Yes. And so she tells the company in this letter that all she wants is she wants them to check their coffee machine and what's going on at that specific location? What the hell was going on that morning. And then hey, maybe you should look at your policies generally. Is this every McDonald's? You probably shouldn't be serving coffee this hot. And then she asked them to cover her medical bills and the time that her daughter had to take off of work. So there's various accounts of what she actually put in this letter, but somewhere between $2,000 and $10,000, because that was roughly her out of pocket costs.
Sarah: Yeah. And I bet McDonald's made that money during the time it took her to write that sentence.
Mike: Exactly. So McDonald's writes back and offers her $800.
Sarah: That's insulting. That's like a story I heard from a friend who was working at a hotel and a guy tipped a quarter by throwing it at someone.
Mike: She finds an attorney in Houston named S Reed Morgan, who had just worked on a case of a woman who was severely burned by McDonald's coffee. So this was already a known enough issue that there have been other lawsuits.
Sarah: Right. And at McDonald's they're like, “Hey, should we stop serving our coffee at the same temperature as lava?” And they're like, why on earth would we do that? I'm sure that it does make sense for coffee longevity to keep it incredibly hot or something ridiculous like that.
Mike: There’s various theories. One theory is that it lasts longer if it's hotter, so you don't have to turn it over as much so it's more profitable, basically. The company doesn't actually say that. The company says most people buy the coffee and then they walk to work or they drive to work and then they drink it 20-25 minutes later.
Sarah: No, they don't. People drink coffee in their cars, you imbeciles.
Mike: I don't know if there's any basis to this whatsoever. And they also say to extract the flavor, the coffee has to be really hot.
Sarah: Well, yeah, but the coffee doesn't have to stay hot, and the coffee becomes coffee, and then it remains coffee.
Mike: So they don't file a lawsuit immediately. Her lawyer reaches out to McDonald's and says look, let's settle this whole thing for $90,000, that's going to cover the medical bills, pain and suffering, the whole shebang, let's do $90,000. McDonald's ignores them. So then they file a lawsuit.
On the eve of the lawsuit, he reaches out to McDonald's again and says, if you guys want this lawsuit to go away, give us $300,000, settle out of court, done. He says later that he would have settled for $15,0000, that was like his opening bid. McDonald's ignores him. So in August of 1994, they went to trial and it's a weird trial in that there's no debate over the facts. So Stella is like, McDonald's, your coffee is way too hot to drink. And McDonald's is like, yes. And then McDonald's is like, Stella, you spilled the coffee on yourself. And Stella's like, yes. So the legal question is basically, is this coffee defective? Are they selling a harmful product?
Sarah: I feel like there's a basic kind of ideological question here of maybe, do corporations have the right to give boiling hot liquid to seniors. And if they can, should they? And I assume McDonald's was represented by Pennywise the dancing clown because he’s Ronald's friend.
Mike: This is the thing that was one of the things that comes out at trial is that McDonald's has settled 700 cases of severe burns.
Sarah: Why not just crank down the temperature? Just like 8, 10, 20 degrees. I feel like it would help a lot.
Mike: And then one of their sort of corporate executive people, they're saying, why do you keep the coffee this hot? Why do you have this grave danger in your restaurants? And he's like, that's far from the biggest danger in a restaurant.
Sarah: I know but you don't pour like a cup of boiling grease and hand that to someone who's driving.
Mike: And yeah, there’s probably other ways in which it's harming its customers and employees, too. But that's not what we're talking about here today.
Sarah: There's something really annoying about companies willfully misunderstanding how people use their product, which I realized they have to do all the time for liability. But the thing we're a corporation in order to have a sound legal strategy is to act like none of them have any idea what human beings are like and also have no experience being a human being themselves.
Mike: This comes out later, but there's a Newsweek article about this and they interview one of McDonald's lawyers who says, brace yourself, “First person accounts of sundry women whose nether regions have been scorched by McDonald's coffee might well be worthy of Oprah, but they have no place in a court of law.” People burning themselves actually super-duper does have a place in a court of law. That's why we have courts of law.
Sarah: And then he added, we all float down here. And also the fact that he's trying to, this is secretary classic 90s, let's call someone a bimbo to ignore the fact that she's alleging something legitimate where it's like, well, why are we to believe Stella Liebeck when it appears that she has nether region.
Mike: If anything that makes it worse.
Sarah: That seems indecent.
Mike: They also say that one of the reasons her burns were so severe is because her skin is old. And if she wasn't so old and if she hadn't worn sweatpants that day, then it wouldn't have been as severe.
Sarah: McDonald's, if you're going to claim that old people wearing sweatpants aren't one of your key demographics, then what do you even think you do? Oh my God, it's literally, what was she wearing? Do you realize, Jesus?
Mike: So the jury deliberates for four hours, they come back with a $2.9 million settlement. It's $200,000 for compensatory medical expenses, pain, and suffering. Which they actually reduced by 20% because she spilled the coffee on herself. She retained some culpability for this, so that's $160,000. And then they give McDonald's $2.7 million in punitive damages, which is based on these two days of coffee sales standard.
Sarah: I feel we would just all love to believe that this could never happen to any of us and that every day isn't just a crap shoot where your favorite McMuffin place is going to take away your skin and then insult you about it.
Mike: Of course, this happens. There's a wave of headlines, which we're going to talk about. And then about a month later, a judge on appeal, reduces the punitive damages, to $640,000, which are triple the compensatory damages. This is something that's happening at the time, this idea that punitive damages are out of control. So they've chosen this completely arbitrary standard that they shouldn't exceed three times the compensatory damages, that's not how punishment works.
Sarah: We love arbitrary three times standards in the law. I'm sure it's in the constitution somewhere. It's like celebrity deaths.
Mike: This is the thing that drives me nuts, the point of punitive damage is to be as big as possible to punish the company. If it was a mom and pop coffee place, then yeah, $2.7 million is too much because they don't have that much money. But if it's a giant corporation, the only language a corporation understands is money, so it has to be really large. The entire purpose of the system that we set up in the 1960s and the 1970s, this sort of pact between regulators and corporations was that punitive damages and these kinds of lawsuits are how we're going to enforce good corporate behavior. And you can't then turn around and be like, it's unfair that we're having to pay these large fines, basically when this is how we've decided to do this. You're just proposing impunity for corporations by reducing these damages.
Sarah: Because we hate fellow citizens getting some kind of a settlement, getting money that we see as unearned. We're more scared of that than we are scared of living in a world where corporations have no checks on them at all.
Mike: We're putting the terrifying fear that somebody would get something they don't deserve above our need to have corporations that don't harm people widely.
Mike: Okay. So that's the case, but what interests me about this case is how it happened. How did this become this perfect totemic example of a legal system run amuck. How did it become the myth that shows up in a Seinfeld episode?
Sarah: The lawsuit that launched a thousand late night jokes.
Mike: So I am going to send you the original AP Story. This is the first America learned of this case. So this was published in August 1994, just after the verdict came out.
Sarah: Headline: “Women burned by a hot McDonald's coffee gets 2.9 million.” “A woman was scalded when her McDonald's coffee spilled was awarded nearly $2.9 million, or about two days coffee sales for the fast food chain. Lawyers for Stella Liebeck who suffered third degree burns in the 1992 incident contended that McDonald's coffee was too hot. A state district court hearing imposed $2.9 million in punitive damages and $160,000 in compensatory damages Wednesday. Testimony indicated McDonald's coffee is served at 180 to 190 degrees based on advice from a coffee consultant who has said it tastes best that hot.” Who is this coffee consultant whose tongue is made of asbestos, apparently?
Mike: What do you think?
Sarah: I feel like it makes sense to me that this is the kind of thing that you would read, or if you were doing like drive time radio, and you're constantly scouring the AP or whatever for this kind of a thing, you're like, okay, let's talk about that. That's interesting. And I feel like if I were in the headline aggregating business in any capacity, I would recognize this as an anger causing headline and something that would just get people who were probably driving to work, drinking coffee, because that's what human beings do in their cars would be like, ah, that's ridiculous. Congratulations to me, I've created another 30 seconds worth of content for whatever job I have.
Mike: Right. What I think is so interesting about this, it's a long article and it's one of those boring things I've ever read because it's written in this, what they call inverted pyramid style. Which is the first thing they teach you in journalism school is that when you write a news story, you order the information in order of importance. So you're not trying to craft a narrative, Stella Liebeck was born on a Wednesday. It’s basically a series of sentences that don't really run into each other at all. Each one of them is just like a little fact. It's very technical and really difficult to read. You don't get a sort of front to back chronological narrative of what actually happened.
So this is the final paragraph of the story where you learn about Stella Liebeck being burned by the coffee. This is one of the most passive fucking sentences. You would have to try to write a sentence more passive in this. It says, “according to testimony, Liebeck was a passenger in a car driven by her grandson outside of McDonald's in Southeast Albuquerque when she was burned by a cup of coffee, purchased at a drive through window. “
Sarah: That cup of coffee just marched right up to her, jumped over with a hot poker in his hand.
Mike: That's the final paragraph of the story, the inverted pyramid, this way of delivering information makes sense if it's like an ongoing story. Improvised bomb went off today in Baghdad. You don't need to tell the whole story of the Iraq war, why we're there and 2003. There's enough sort of shared knowledge about that situation that you really can give people like, Hey, here's a new development of this ongoing story, right? But this story is the first national news coverage of this case. There was never a story of women received severe burns at McDonald's, right. Woman asks McDonald's for money and is refused. None of the previous beats in the story were ever reported and this story doesn't give you just a chronological telling of Stella Liebeck orders and coffee. It burned her really severely. She's spent a week in the hospital, et cetera. It's telling a backward story about something no one has heard of before, right?
Sarah: Because we're not interested in the accident or the suffering, that doesn't make it newsworthy. It's the amount of money that makes it newsworthy.
Mike: So this story comes out the way that AP wire copy works is that other newspapers print it and then they oftentimes will shorten it to their own needs or like to fit into the space or whatever. Right. So in discerning the law, they trace all of the newspapers that publish this story, and it usually appears at sort of two-thirds of the length of the original missive. Usually what they cut out is like how severe her burns are and like what actually happened. Because oftentimes you cut from the bottom if you're cutting one of these inverted pyramid stories.
Sarah: I feel like the fortunate thing about nuances is that it often makes things, it doesn't make them less interesting, but it makes it so that you have to expend more energy to experience the interesting aspect of it. It ruins it being something that's this little nugget that gets extreme reactions out of people.
Mike: Exactly. It ruins the nugget. Yeah. One thing that I find so interesting about this period too, is that on September 1st, so relatively soon after the verdict, there's a front page Wall Street Journal story that debunks the myth.
Sarah: Oh wow.
Mike: It does the thing that like we are doing now, and Adam Ruins Everything is doing. It’s like, we interviewed all the jurors, and the jurors basically universally say yeah, we went into this case thinking, why are we talking about a woman who spilled coffee on herself? Obviously, this is unbelievably frivolous, but then we saw the photos and we heard about McDonald's behavior, and we heard about their policies on coffee, and we changed our minds.
One juror saw the photos of Stella Liebeck’s injuries and then went home that night and told his wife and daughter never to drink coffee again. I actually think it's amazing that it's often just taken for granted that the judges and juries in these cases are just like insufferable SJWs who have no critical context. Ha-ha, this crazy woman's spilled coffee. Here's your money.
Sarah: God knows there's too many liberal young kids running around and that's one of our main problems in this country.
Mike: Famously liberal American legal culture. And also, this is why I think the overall, decades old by this point, narrative about frivolous lawsuits is so important is because without that context of already being convinced that lawsuits in America are out of control, you might think, well, this sounds really silly at first, but I wonder why the jury made that decision. I wonder why the judge was okay with that. There's probably something here that I'm missing, and I should look into it more. But other than this Wall Street Journal story, nobody showed any curiosity. It's just crazy to me for journalists to behave this way.
Sarah: Well, you know, it's a business.
Mike: I found other articles that critique the initial news coverage, but like 99% of Americans did not hear about this story from news coverage. I think it's very similar to when we talked about Kitty Genovese, where the story of a woman being stabbed to death gets no interest at all. It's just like a pretty routine crime.
Sarah: Yeah, yeah, yeah, it happens every day.
Mike: Exactly. And then it's only once it becomes this reinforcement of this broader narrative that people get interested in it. It wasn't the hard news coverage that spread the myth, it was this second, third wave of coverage when Stella Liebeck’s case became fodder for editorials.
Sarah: Oh God, you're going to read me some awful quotes. I can feel them incoming.
Mike: Dude, this one, maybe you want to fucking cry. This is from the San Diego Union Tribune. This is the entire editorial, it’s one paragraph long. It says “When Stella Liebeck fumbled her coffee as she rode in the car with her grandson, she might as well have bought a winning lottery ticket. The spilled coffee netted her 2.9 million in the form of a jury award. Liebeck sued McDonald's for serving takeout coffee that her lawyer claimed was too hot. This absurd judgment is a stunning illustration of what is wrong with America's civil justice system. Our guess is that other greedy copycats in restaurants throughout America will soon be happily dumping coffee into their laps in a bid to make a similar killing in the courtroom.”
Sarah: I just find it incredibly dark, but we were and are in this mindset of if someone gets some significant amount of money, we become completely tunnel vision away from thinking about the circumstances of how they got it, or even whether they got it for that matter. Just setting that aside. We're just like, I wish I had $2.9 million, and it's do you wish you lost the use of your lower body? You’re so focused on the money and just this idea. I think this is a sickness we have, but I also think it's a response to a real thing because in America we are trained to be like the only thing that's gonna make me feel safe is having a gigantic lump sum of money. And you know what? That is the only thing that's gonna make you safe. So you're not wrong.
Mike: The other thing that makes me incandescent is nobody seemed to reach out to Stella Liebeck.
Sarah: Yeah, I'm sure she was busy having her skin replaced.
Mike: That's the thing. She has trouble standing up straight for the rest of her life. This is a debilitating injury that she's basically permanently disabled by this. And a five minute phone call with Stella Liebeck, just describe to me what happened. Holy shit.
Sarah: There's your story. And like, why isn't anyone picking up on this opportunity for a story about McDonald's abusing this old woman?
Mike: So another thing that happens in these editorials is the details start to fudge. So the Cincinnati Inquire said, “Personal responsibility has been scrapped for the notion that someone can be made to pay for any mistake, including opening a cup of hot coffee between your legs while driving.”
Sarah: Okay. Yeah. And I remember when I gave you the summary a little while ago, I think I said that she was driving, and we all do this. When we tell anecdotes, we hold you to a higher standard if you're writing for a newspaper.
Mike: San Francisco Chronicle refers to it as a “surreal case, like the woman who recently won $2.7 million after spilling coffee on her leg in a McDonald's restaurant.”
Sarah: I always love when this sort of folk headline, mythology, like as stuff changes, you got to look at what remains consistent. And it's lots of money, spilled coffee on herself.
Mike: The authors of Distorting the Law talk about it as a folk tale. These urban legends of the razorblades and the Halloween candy. It's just a thing that sort of bounces around the culture. And we saw this with Kitty Genovese, too. The real danger of a story like this isn't stories that actually investigate what happened. The danger is when it becomes something that you just say in a one sentence aside about something else.
Sarah: I feel like at that point, that's when it's a meme.
Mike: Exactly. It's become a meme. Yeah. And this is the final stage of the story when it starts showing up in late night jokes and joke calendars and bathroom readers, and everywhere. This case, it shows up in Ann Landers. The people write in and be like, what about this lady? And Ann Landers will be like, that's ridiculous.
Sarah: And I feel like you should be like, this is an advice column. Please ask me for advice.
Mike: Exactly. Talk to me about problems. Apparently, Jay Leno made so many jokes about this case that Stella's lawyer contacted him and was like, “I am begging you, let me tell you what actually happened”, and didn't do anything. Last example of this. There's a Toby Keith song. This is the line. This is a fucking rich text. He says, ‘Plasma getting bigger. Jesus getting smaller. Spill a cup of coffee, make a million dollars.”
Sarah: Okay. I really feel like Jesus, not that I know a ton about the guy, but I feel like he was like pro medical care for old women.
Mike: What would you think about this case, Toby?
Sarah: I guess in a way I find it reassuring that Americans have always been horrible and mean and ignorant. Cause I've been really upset by how much of that I'm seeing lately. And I used to feel like in retrospect, my expectations were somehow too high.
Mike: So here is the point of the episode where we talk about what I really want to talk about, which is one of the worst periods of American journalism in our lifetimes. This demented moral panic about frivolous lawsuits that had been bubbling before Stella and then just explodes after 1995. So I am going to send you a New York Times article that is published about a year after Stella's verdict.
Sarah: Oh boy. Okay. This does have a great title. “Hey waiter, now there's a lawyer in my soup. How about a tort with that? Tort? Oh, that joke was begging to be made. Take the case of the young couple celebrating their honeymoon at the rainbow room last year, see them near the smoking section. They were from time to time subjected to drifting smoke during the evening. They finished their meal and left without incident. A few weeks later, they sued the restaurant for $1 million, maintaining that they were so upset by the smoke at dinner, that it “upset their expected right to conjugal happiness”. The restaurant ignored the case, and it never went to court. But what if it had? And what if the couple had won? America's restaurateurs argued that such a scenario is possible.” I feel like this is like the crawl and a 50s softball movie.
Mike: This is like a genre of journalism that we will get over and over again, over the next decade, a story that lawsuits are out of control. And then here's this anecdote that isn't a lawsuit. This opening anecdote is the legal system working as intended. These people filed a frivolous lawsuit, and it didn't go anywhere.
Sarah: It's like Alan Dershowitz’s classic book, where even if someone isn't acquitted, the fact that they even attempted defense is proof that America is going to hell in a handbasket. And it's not. Do you think this is true? Or did you just have to write a book this year?
Mike: Exactly. What's amazing is this article of course uses the McDonald's hot coffee case like this could happen to anybody. And then the reporter interviews, what he says is a dozen restaurateurs in New York city, none of them have ever actually had a lawsuit filed against them. The closest thing to a lawsuit in the entire story is one guy who owns a restaurant, has a customer who fell down the stairs and knocked out a tooth. And they ask the restaurant to pay for his medical bills. And it went through the insurance company and the guy got his medical bills paid.
Sarah: The fact that we're upset about these stories suggests that we want to be living in just this frontier, where even if you injure yourself in a way that an entity with more money than you could ever possibly dream of could easily take care of, why do they because you're both comparable individuals.
Mike: There was some question about the handrail or whatever, but it's not a lawsuit and it's not clear that any injustice actually took place. This is why businesses have insurance to deal with things like this.
Sarah: I haven't heard any of these articles mention insurance because that also fouled up the story that they're trying to tell here.
Mike: Exactly. And then the story ends with the case of this couple who went out to a fancy restaurant and the valet brought the wrong car. There was some concern about the car or something, something. And these people complained, and they demanded for their $700 to be refunded by the restaurant. Not a lawsuit.
Sarah: I feel like it's because people love to gossip about other human beings and it's that's fine. But that doesn't make it news.
Mike: So what's amazing to me is that like the actual story here is debunking the panic that you're feeding. If somebody says Seattle is bowing under an epidemic of snake bites, and I talked to park rangers, they've never seen a snake bite. I look at poison control, no records of any snake bites. The story then is well, the people saying they're snake bites are lying, but I'm not just going to write a story, Seattle snake bite epidemic and John almost saw a snake. No, you have to at least include one example of the thing that you are saying is happening.
Sarah: Once again, we had nothing better to do, you know, we weren't yet freaking out about Y2K. We were just like, what are we going to freak out about? We have to freak out about something.
Mike: There's a time magazine cover story called Busy Bodies and Crybabies: What's happening to the American Character. There's a Newsweek story called Lawsuit Hell, there's a bunch more of these like conservative that come out. One of them is called the Death of Common Sense. It's a mass hysteria event. Most of the stories you read in these articles and these books are exactly like the one we've got here where someone thought about filing a lawsuit. This is really awful. This is a case that gets called the Humping Hobos.
Sarah: Oh God. I'm not excited at all for where this is going.
Mike: It's bad. It's two homeless people who are in the New York subway system. There's a track that is disused. They pull out a mattress, they put it on the tracks. They start having sex. And then a train comes. It turns out this was like some maintenance tunnel, something, something it's only used like once every couple of months or something, and this is wild. They get hit by the train, but they don't have severe injuries.
Mike: The dude loses like a part of a toe. And I think the woman has like her pelvis dislocated or something, but not super-duper severe injuries.
Sarah: I was expecting this to be much sadder.
Mike: They find a lawyer and a lawyer puts out a press release saying we're suing the New York subway for $10 million, but then nothing. They never filed the lawsuit. Also in this infamous Newsweek story called Lawsuit Hell they, again had no details, we’re not given the time or the date or any specifics about this case, but apparently there's a convicted sex offender. That's all the information we get about this person, who is running from police in Maine. And he hides in the woods for three days and he loses three toes to frostbites. This is the sentence from the Newsweek story. “Incredibly, police say, the man threatened to sue the police for not catching him sooner. He couldn't find a lawyer, but his sheer chutzpah did not surprise the county sheriff.”
Sarah: Headline: People have chutzpah somewhere in America.
Mike: The thesis of the story is that lawsuits are out of control. And we have a case of the legal system working exactly as intended. Right? This is very clearly a frivolous case. Lawyers look at it and they're like, eh, that's fine.
Sarah: I know we say this all the time, but it must be said again and again. The point of this story and stories like it is not that it's true or even that the people writing it necessarily are doing so in good faith, but that they know people will read it.
Mike: Yes. There's a story of a Boston university professor who gets hired. And then within his first year sexually harassing students, he sexually assaults a colleague. He gives students alcohol, the guy's just a mess. The university fires him. And then he sued under the Americans with Disabilities Act because he says he has a mental illness that causes disinhibition, and he can't control his behavior. And of course this bounces around, you'll never guess what the disabled people want now. This is the lobbying used for frivolousness. And then I found the case, you can read it. The judge looks at that and is like yeah, this was frivolous. And the judge tosses it out. The judge says he's clearly unfit for this role, regardless of any reasonable accommodation.
Sarah: It also feels like a story, you know, or a series of stories where legal literacy is an issue. Because if people had more of an understanding of just well, there's filing a lawsuit and then there's all the other things that have to happen before you have a snowball's chance getting any money. And then after you get money, they can still take it all back, actually.
Mike: Exactly. So there's no distinction between things that people tried to do and things that happened. The other category of lawsuits are quote-unquote frivolous lawsuits that show up in these stories that aren't frivolous. So this is in the Newsweek story. It says “School boards now fear that parents will sue for anything. In Kentucky, a mother sued her daughter's school after the girl had performed oral sex on a boy during a school bus ride, returning from a marching band contest. The woman blamed adult supervision saying her daughter had been forced. If the case goes badly for the school system, such trips could be jeopardized.”
Sarah: What was happening in the country that you could just say that and have people be like, oh, sounds, sounds good. Sounds like solid reporting there. Because the story itself is saying that the mother is alleging that this wasn't a consensual sexual experience. So blaming a lack of supervision from the school. Again, isn't it a core American value that the proxy parental unit that you're giving your child to during the daytime should protect them from sexual assault.
Mike: Another thing that really bugs me about this is this is a real case. I could only find one actual story about what happened and there's no follow up. So another one of the problems with plucking these random anecdotes out of obscurity is that it requires journalists and resources to actually investigate them. But we know that she gave oral sex to this boy on the school bus, on this field trip. The principal “investigated”. I have no idea what that means. The principal decided that it was consensual and suspended her for 10 days.
Mike: We don't know what happened. The boy might've been suspended, might not have, we don't know. Her mother then complains and says no, she was forced to give him oral sex. The school board investigates and finds, yes, he forced her to have oral sex. Then the principal suspends her for two more days for not reporting it earlier. Okay. She's still the bad guy out of this somehow. And then the mother files a lawsuit, this is fucking ridiculous. And the mother in the lawsuit, very clearly, she's not asking for any money. She is suing the school to demand sexual harassment training for higher level staff.
Sarah: How dare she, how dare she give a damn.
Mike: This poor woman shows up in fucking Newsweek as like, you'll never guess.
Sarah: And it's so fucking dark that the only motive we can ascribe to anyone in these stories is financial gain. Not protecting your child, not healing from an injury, not trying to enforce some kind of limitations on corporate power. It has to be greed. This is the same thing with the classic nineties maligned women's stories that were for me, a lot of the impetus of starting to do the show again, there's such a theme of well, she's on TV and made money in some capacity after we dragged her entire life through the mud and traumatized her horribly. So in the end, didn't she gain? And you're like, no, what?
Mike: Yeah. Another one that goes around is a guy who was working on a construction site, and he put up a ladder and he didn't know that the ground that he put the ladder on was like frozen manure, like frozen poo. And then he went for lunch or something and came back and the poo had melted, and he climbed the ladder again. And the ladder fell over and he sued the ladder company and got rich. But then people investigated this and there was no manure. It was a guy who climbed a ladder, the ladder was weighted for a thousand pounds. It said that this can safely hold a thousand pounds. The guy weighs 250 and the ladder, one of the rungs of the ladder that the guy is standing on, brakes and he falls down and injures himself.
Sarah: So where did this phantom manure come from?
Mike: This one originated on 60 Minutes. So not like a fly by night, random calendar.
Sarah: Come on, 60 minutes. I expected more of you. I expected morally of you.
Mike: But then also a lot of these cases seem weird at a glance, but they're actually just product liability cases. So somebody suing for falling off a ladder sounds silly, but again, this is how we enforce things like being honest on your label, about how many pounds your ladder can hold.
Sarah: Right? Because otherwise you can kind of say anything and it turns out a lot of companies do that. Did you hear about the hugging cousin case?
Mike: No, this is from like 2015, but I'm including it just because it's a wild story. There's this woman who goes to her 12 year old nephew's birthday party. He sees her, runs into her arms to give her a hug, he accidentally knocks her over and she breaks her wrist in the fall. And this shows up in the sort of New York Post circuit as, aunt sues nephew for hugging her.
Sarah: I know this story. I think I've heard of it and it, yeah. And it's like she had to sue him because that was the only way to get his family's insurance to pay her insurance for medical costs, I assume.
Mike: So much of the stories about the dastardliness of insurance companies, her insurance would not cover her injury and offered her $1. The only way for her to get her medical bills paid was to sue the family and get their homeowner liability insurance to cover it because it covers injuries that take place on the property. And you have to name somebody in the lawsuit, so she had to name her nephew and her nephew was fine with this. Her sister was fine with this. The whole family knew exactly what was going on. It was just this legal formality, and it didn't work. The case was thrown out.
Sarah: Yeah. It's like we're recycling cases that are legally unusable and turning them into news.
Mike: Yes. So the last category of cases that show up in these stories, and I really could not believe this is, straight up fake cases. I heard this one in high school and I didn't realize until I was researching this, that it was fake. Did you hear the one about the guy who was driving an RV and put on the cruise control and sort of took his hands off the wheel and was like, oh, this is fine. He's driving through Idaho or something. And he's like, okay, this is safe. And then he goes to the back to go to the bathroom and then the RV veers off the road. And either he dies, or he's injured, depending on the version of the story, did you hear this?
Sarah: No, I never heard that one.
Mike: So I didn't hear it with this edition, but apparently the epilogue to the story, or one of the other versions of the story was that he then sues Winnebago, and they give him $1.75 million and a new Winnebago.
Sarah: So he's probably not dead.
Mike: So this is from a fucking email forward.
Sarah: Oh my God. Email forwards. Major news source.
Mike: It's not clear who wrote these originally, but in 2002, this is fucked, somebody wrote something called the Stella Awards after the most frivolous lawsuits in America. I want to fight somebody on Stella's behalf.
Sarah: I know man, Jesus.
Mike: This Stella awards thing goes around. This Winnebago story is on there. There are these other ridiculous stories, one of them is a woman who sued a department store for tripping over her own toddler in the store. There's one of a guy who's trying to steal a hubcap and the driver doesn't know, and he backs over the dude's hand, and then he sues and he gets $74,000.
So I guess this entire email runs verbatim in the New York Daily News. There's even this thing, I think this is so typical at the time, USA Today runs one of these like standard, lawsuits are out of control, generic stories. And they include most of these stories.
And then Howard Kurtz at the Washington Post writes a debunking article. He's like, USA today just printed a bunch of fake stories from an email forward that I got too. And USA today doesn't take any responsibility. They basically say just ‘ah, but still’. Yeah, those ones might be fake, but we all know the frivolous lawsuits panic. We all know Americans are suing each other.
Sarah: There's this unspoken acknowledgement that this isn't ‘news’ news, this is like entertainment news.
Mike: They even say in their sort of public letter, few Americans would disagree with the proposition that there are far too many frivolous lawsuits filed in America. ‘Few Americans’ just means that something is widely believed. That doesn't mean it's true.
Sarah: So you can say anything in the opening sentence of something of a trend piece and someone who has never thought of that thing in their life will be like, oh yeah, I guess that's true.
Mike: It really is remarkable the extent to which it's all anecdotes all the way down. So in Distorting the Law, they do a content analysis of one of these books that came out in the nineties called The Litigation Explosion, and they find the book consists of 272 short anecdotes, one case study, and six statistics.
Sarah: Six statistics? That’s like you having me over for dinner, you're going to make me chicken. And then I come over and you serve me like a big bowl of spices. And you're like, here you go. And then you bring out like one nugget, one chicken nugget, and I'm supposed to eat that whole bowl of seasoning in front of you.
Mike: And what drives me nuts is all of the statistics that were running around, you come across the same statistics and all these articles, and they're all fake. One of the numbers that goes around is that Americans payout $130 billion in like punitive damages or like civil tort damages, $130 billion, you see this number everywhere. And the $130 billion includes every insurance claim paid out to everyone in America. If your bike gets stolen and your insurance gives you $800 bucks, that's included, these aren't even lawsuits, they're certainly not frivolous lawsuits. It's just like a big number.
Sarah: This feels like a reinscription of all American attacks for financial justice, or using insurance for what it is for. It's rebranding all of that under the label of scamming, which is really insidious.
Mike: Another number that goes around is that Americans file 18 million lawsuits a year, which is technically true, but that also includes custody claims.
Sarah: It's funny how the legal problems of divorcing parents are often used to beef up unrelated statistics. Because we talked about this too, in terms of kidnapping.
Mike: It also includes minor contractual disputes, landlord, tenant disputes, most cases filed in the US or like really boring contract stuff. And only 7% of lawsuits are really about torts at all or you know, you damaged me, and I want compensation. That's a very small percentage and that percentage was not particularly changing at the time. And also, I cannot get over this, it's true that the number of lawsuits was roughly 18 million in the 1990s. It's now 15 million. So as we have this panic about like lawsuits are out of control, lawsuits were falling.
Sarah: Right? Well, we do the same thing with murder. The less murder there is, the more we like to freak out about it.
Mike: It's the same with punitive damages. If you look at the actual numbers, only 3% of cases actually result in punitive damages. And in 1996 at the height of this panic over frivolous lawsuits, the median punitive damage was $38,000.
Sarah: Again, we create a system where Americans have to use the legal system in order to get kind of basic compensation. And then we stigmatize them using a system that is really their only option.
Mike: It's like the frivolous lawsuits moral panic was this weird work around genuine problems in the legal system. There's a lot of articles written about the judicialization of the United States, because so many standard government processes have essentially broken down at this point. So if you want to get environmental relief, you have to sue. It's not fair to blame the people that are using the remedies that are available.
Sarah: Right. And I think when we feel hopelessly enmeshed in a system and there's no way out, we rationalize that by attacking people who show us how awful that actually is for us, or it could be.
Mike: What we want as a society is we want victims to be made whole again. And we want corporations to behave differently. I want McDonald's to not serve its coffee that hot again and I want Stella to be fine.
Mike: We've linked these two things, but you can also imagine a situation where just like the government steps in and does both of those things separately. We don’t need Stella and McDonald's to have a fight with each other.
Sarah: It's also weird how we're acting like Stella's taking that money away from us somehow, or that normal people would otherwise have it. And it's do you think that that money was going to trickle down to you?
Mike: One of the main, another bogus statistic that goes around is the quote unquote torque tax. That companies are spending 10% of their profits on lawsuits. And that's actually true, but they were spending it on like other corporations suing them. It's like Samsung suing Apple for some patent thing. And it spends years in the courts, and they have to compensate each other. Movie studios famously sue each other over basically every movie that gets released. The only form of lawsuit that was actually increasing during this time was corporate lawsuits. Corporate law has expanded significantly.
Sarah: And it's so funny that we don't like to have histrionic stories about that. Listen, look at what Samsung is doing. That jerk.
Mike: The last thing to say about this is that it resulted in a wave of legislation as well. The Republicans took this up, the tort reform thing, this became a big part of the contract for America, Newt Gingrich's thing. 45 states have passed some sort of tort reform measures. A lot of them limit medical malpractice lawsuits. Florida has a cap on damages for a wrongful death of $500,000.
Sarah: And they have a lot of theme parks there. So, you know, you do the math.
Mike: This is a reaction to a problem that didn't exist, and we've created a much worse problem. Yeah. So can I end with the only actual frivolous lawsuit that I came across?
Sarah: Oh my gosh. Yes.
Mike: So whenever you come across these little one sentence descriptions of cases in these abysmal articles, after like two seconds of Googling and you're like, oh yeah, like there, there never was a cat scan or whatever. This is the only one that I looked into, and it was exactly as described. So there's a high school in Queens, there's two students, one is named Paige and one is named Lisa.
So after six semesters of high school, Lisa has the highest grades and a school administrator tells her Lisa, you're going to be the valedictorian. You're going to give the speech. You can start putting that on your college applications. That's after six semesters, after one more semester, Lisa's grades falter a little bit and Paige, her grades are 0.05 points higher than Lisa's. So all of a sudden Paige should actually rightfully be the valedictorian, by a hair, but because the school has already told Lisa that she's going to be the valedictorian and she's put it on her college transcripts, the school goes to page and is like, do you mind sharing this? We're just going to have co-valedictorians. You can both put this on your applications.
Both girls get into good schools, they're on their way. Paige's parents appeal this decision to the school board and basically say our daughter should be the only valedictorian. There's never been two valedictorians before, the person with the higher grades gets to be valedictorian. That's really straightforward. School board comes back and says, we looked into it, you're going to share it. There basically there's some debate over rounding, we're rounding one up and one down and they're the same something, something. So Paige’s parents sued the school board over, why isn't our daughter the valedictorian? And this winds its way to the state Supreme Court. And they eventually agree with the school board that, guys shut up. You're just both going to be valedictorians. You both got into college. This ultimately doesn't matter.
Sarah: And also it makes total sense that the one actual frivolous lawsuit is parents acting on behalf of what they perceive as the welfare of their children, but what is really their own ego.
Sarah: And also the light bulb that went off in my head as I was looking into this was that the threats of the legal system to people are from rich people. Rich people have the power to use the legal system to get what they want and throw a tantrum. And one of the things you find in so many of these Newsweek-ish stories of frivolous lawsuits are out of control. It's almost always a poor person who slips and falls off in grocery stores, which are basically an urban legend, those effectively never go through. It's almost always poor people. They are swimming in the same intellectual waters as everybody else, so they probably think that it's an easy ticket to get money if they do one of these slip and fall things.
Sarah: Yeah. And also maybe if you threaten somebody, maybe they'll settle with you and give you a few hundred dollars or something like that.
Mike: Yeah. There's a woman who tries to sue McCormick and Schmick's for finding a condom in her clam chowder, allegedly. She becomes one of these people that sort of shows up in the local news. She kind of does this over and over again and it seems, at least in my estimation, that she's probably faking this. And she does a hot coffee thing with Taco Bell. She says Taco Bells’ hot coffee burned me. And there's a very brief local media report about it that says that she entered into negotiations with Taco Bell, and they gave her $2,000.
I think the only reason that they did that was because it was getting media attention. I don't think this is happening all that often. Even when we have cases of, you know, somebody making what appears to be a straightforwardly frivolous claim, these are not huge payouts. This is not the problem with the legal system. So many of these moral panics fall into the category of things that are true, but who cares?
Sarah: Yeah. Yes. That's one of your themes for sure.
Mike: Some number of people probably get a couple thousand bucks from companies. More accurately from their insurance companies.
Sarah: These companies are built to have a margin of error that can afford that scale of stuff happening.
Mike: I think that it's so telling that this entire panic, if you step away from the anecdotes and you think, okay, 1990s America, is it too easy to sue corporations. Think about that for two seconds.
Sarah: What are corporations doing at this time? Are they acting really unable to do what they want to because the public is controlling them so much?
Mike: Suing a company isn't a year’s long humiliating ordeal. The success rate is minuscule. It is wildly disruptive to your entire life to try to sue an entity like McDonald's, who can drag you down into arcane technical opinion until you die of old age. This is what happened in the Exxon case, right? It took 14 years. The whole panic was based on a lie.
Sarah: Think of the energy companies in Houston destroyed by excessive oversight. And also not to sound too much like a conspiracy theorist, but apparently that works for people. If someone is seeking to anger you and get you into a state of frustration, such that your logical faculties are compromised and you want to side with whoever is against this person who you're mad at, ask yourself, who is seeking to anger me and how might it benefit them? Because it is going to profit somebody for you to be buying that story. So where's the money going? That's my question for you.
Mike: And if the money is going to joke calendars or Jay Leno, maybe Google it first.