...Buy one coffee and get US $640,000 free Reported by: Violet Simbi, M984011056 Uyanga Purevjav, M984011053 Anh Le, M984011066 NSYSU Department of Management BRIEF CONTENTS Abstract 3 1. Introduction and issue identification of the case 4 2. Analysis 7 2.1. Stakeholder analysis 7 2.1.1. Consumers 8 2.1.2. Owners, executives, employee 8 2.1.3. Other groups of stakeholders 9 2.2. CSR Analysis 9 3. Evaluations 10 3.1. Who is to blame? 10 3.2. Root cause analysis 11 3.3. Recommendations 11 4. Implication of the case for future product related complaints 12 Conclusion 15 References 16 Appendix (Case: “The coffee spill heard round the world”) 17 Abstract The Stella Awards were inspired by the Stella Liebeck case in 1992. Stella purchases McDonald’s coffee from a drive through and later received US $ 640,000 for burning herself with this coffee. The lawsuit between Stella Liebeck and McDonald’s – a huge cooperation, was one of the most controversial court cases of its time. In this paper we defined the major ethical issues, analyzed who are the stakeholders and how the stakeholders influenced this case. Furthermore, we also mentioned other complain and lawsuits which McDonald’s had to face with before 2007, which means before and after Stella’s case. Finally, we have some references and comments form McDonalds in particularly. As well as general comments about how organizations and how they make final decisions in the future when...
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...Liebeck v McDonald’s Restaurants July 7th, 2014 Introduction Corporate giants are known for their strong legal defense teams, their shrewd business practices, and their strong presence in politics. In the United States, its adversarial court system allows corporate giants to have the upper hand when faced with litigation. In an adversarial court system, the stronger the defense (lawyers) is, the stronger the case. One extreme case in the American court system that deflects corporate giants’ upper hand in the United States’ adversarial system, is a 1994 “frivolous lawsuit,” Liebeck v. McDonald’s Restaurant. McDonald’s is known for its fast-food and joy that it brings to children with its Happy Meals. However, in the Liebeck v. McDonald’s Restaurant case, McDonald’s was known as an inconsiderate corporate giant whose nonchalance cost McDonald’s nearly $3 million. Liebeck v. McDonald’s Restaurant is a case that was a media train in the 1990s and misconceptions about the case filled the airways. Case Overview Why should your favorite quick service restaurant be responsible for serving your favorite breakfast beverage, coffee, just how you like it? Liebeck v. McDonald’s Restaurant involved a then 79 year-old, Stella Liebeck, who purchased a cup of coffee from a McDonald’s located in Albuquerque, New Mexico, in 1992 (“McDonald’s,” 2002). “Liebeck tried to hold the cup of coffee between her knees while removing the lid; however, the cup tipped over and the hot coffee burned her...
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...a cup of coffee at McDonald’s, they would expect to have a hot full flavor cup of coffee. However, that was not a case. On February 27, 1992, one of the McDonald’s customers ordered a cup of coffee for herself. Yet, that cup of coffee was not just hot, but it was extremely hot. As of result, she was hospitalized for eight days and suffered third degree burns over her inner thighs, perineum, buttocks, genitals, and groin areas. How could she get burned that bad from a cup of coffee? What was the temperature of the coffee at the time of this incident happened? What kind of cups and lids McDonald’s served their coffee in? Both the lady and McDonald’s have strong reasoning behind their respective cases but ultimately who is responsible for the incident that occurred? Her name is Stella Liebeck, she was seventy-nine-year-old. She was sitting in the passenger seat when her grandson drove his car through a McDonald’s drive-thru window for her to order a cup of coffee. After receiving the order, the grandson pulled his car forward and stopped for his grandmother to add sugar and cream to her coffee. While parked, Ms. Liebeck placed the cup between her knees and attempted to remove the lid from the cup. As she tried to remove the lid, the contents of the cup spilled onto her lap. The coffee was at 185 degrees Fahrenheit at that time of the incident since McDonald’s served its coffee far higher than the temperature of typical home-brewed coffee. The coffee was hot enough to...
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...you have probably heard of the fast food restaurant McDonald’s getting sued for their extremely hot coffee. In 1992, a 79-year-old women named Stella Liebeck spilled McDonald’s coffee on herself, causing her to be in the hospital for a week. After Stella wrote a letter to corporate, McDonald’s only wanted to give her $800 for her medical expenses. She took them to court and the jury ended up holding McDonald’s liable. The case received extensive media coverage. As a juror, I would have ruled in favor of Stella Liebeck. There were two main points on why I would have ruled in favor of Stella. They are because of the severity of her injuries and the claim that the coffee was too hot. Stella Liebeck’s...
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...A Frivolous Lawsuit is a case where people sue big corporations in the hopes of making a large sum of money. Many of these stories sound like absurd urban legends. Surprisingly, many of these ridiculous stories are true. In many cases, the person who is suing a corporation gets overly creative with their allegations and they create lawsuits which get thrown out. However, other cases such as Liebeck v. McDonald's go further. In February 1992, an 80 year old woman named Stella Liebeck ordered a cup of coffee from McDonald’s to go. When the incident occurred, she was sitting in her nephew's car, that was pulled over so she could add sugar to her coffee. When Liebeck removed the lid of the cup she spilled her hot coffee on herself. She suffered...
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...Case Analysis Liebeck v. McDonald’s Restaurants Pearson v. Chung Introduction Liebeck v. McDonald’s Restaurant, also referred to as the “McDonald coffee case”, was a well known case in the United States of America in 1994 because it was considered frivolous. The case involved a woman Stella Lieback, who spilled the hot coffee she purchased from McDonald onto her lap and sustained a series of third degree burns, and was awarded millions of dollars from her lawsuit against McDonalds. The coffee was not only hot, but it was scalding, capable of immediate damage to the skin, flesh and muscle (Letric Law, 2011). In addition to the above case, the Pearson v. Chung case, also known as the “pants lawsuit”, was also a well known case in America in 2005 (Lexis-Nexis, 2008). This is a case where an administrative law judge in the District of Columbia had taken a pair of pants to the cleaners for alteration and dry cleaning; and sued the cleaners for $67 million dollars for the loss of his pants. The case was considered frivolous and became a flashpoint in the debate in the United States over tort reform (Lexis-Nexis, 2008). The major focus of this paper will be to critically analyze these two cases on the stated facts, the issues, the applicable laws, and the decision of the judge and the jury. What are the facts? There are some facts associated with Liebeck v. McDonald’s case. The woman involved in this case was 79-year old Stella Liebeck of Albuquerque, New Mexico,...
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...2.7 million dollar lawsuit for spilling coffee in her lap. This article will reveal the facts, issues, laws, and affects about this case. Many believe that our legal system is out of control. What do you think about this news story? After reading this article you will be a more informed citizen about this case and you will think twice about judging someone based on a news headline. What are the Facts? In 1992, Stella Liebeck purchased a cup of hot coffee at a McDonald’s drive through in New Mexico while sitting in the passenger seat. She proceeded to take off the lid of the coffee cup in order to add cream and sugar. She then accidentally spilled the coffee into her lap where it soaked into her sweat pants that she was wearing. This caused third degree burns that resulted in a seven day stay in the hospital along with skin grafting to repair the damage that was done (Schostok, 2000). What are the Issues? The issue that is specific to this case is whether or not McDonald’s should be liable for selling coffee that is too hot? The broader issue is, should businesses be responsible for the safety of their customers? What Law Applies? The product liability law applies in this case, specifically the “implied warranty of fitness [that is] imposed by the Uniform Commercial Code” (Morgan, n.d.). What did the Jury decide? The jury decided to award Liebeck $200,000 for compensatory damages. They also penalized McDonald’s $2,700,000 as punishment (Fleisher-Black...
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...v. McDonald’s and Pearson v. Custom Cleaners Legal Case Analysis AMBA 610 9043 University of Maryland University College Introduction Frivolous lawsuits can be a determent to those who are really seeking justice through the court system. Lawsuits that are frivolous in nature are filed in the court systems that lack legal merit (Frivolous Lawsuit Law & Legal Definition, 2015). Plaintiffs and attorneys who decide to partake in meaningless claims against other parties can anger society by wasting tax payer’s money on cases that are filed and argued with loop holes in litigation (Frivolous Lawsuit Law & Legal Definition, 2015). Evaluating the product and service liability laws will give insight into the two cases that will be discussed in this paper. The two cases covers how product liability effects the consumer and company owners of each industry of businesses. Cases that are brought to courts for product liability is always initiated by the plaintiff who has to prove if the defendant is liable for alleged action claims (Jones, 2015). Two cases that have made an impact on the pursuit of filing frivolous lawsuits is the Liebeck v. McDonald’s and Pearson v. Custom Cleaners case, which will be discussed in further detail throughout this paper. If cases set precedence’s in the court systems, then these two cases show how people can obtain or attempt to collect monies from others that lacks in importance to bringing legal justice per society standards. Case 1:...
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...McDonald’s Restaurants law case Introduction The famous 1994 Liebeck v. McDonald’s Restaurants law case, popularly known as “the hot coffee lawsuit” sparked a debate in the U.S on product liability. The case resulted from the severe burns Mrs. Liebeck got from her coffee spill. Having bought coffee from McDonald’s, Liebeck told her grandson to stop the car so that she could add sugar to her coffee. She placed the cup on her lap but it got spilled causing a third degree burn to six percent of her body and less serious burn to sixteen percent. She was hospitalized for eight days and had to undergo skin grafting. She also spent the next two years on medication. Liebeck filed a lawsuit against the fast food restaurant and was awarded $640,000 by the trial judges. The parties however, decided to settle for a confidential amount before an appeal could be decided. Many people saw the case as worthy as many people before had received burns from McDonald’s coffee but not much was done toward it. Laws and ethical principles violated The serving of very hot coffee by the McDonalds violates the product liability law (Allee 1984). Coffee at temperatures between 180-190 degrees is well known to burn when spilt. The fast food chain knew this very well and it still continued serving this very hot coffee even after over 700 previous cases of burnt reported to it. This demonstrated very well that the food chain was not ready to take any responsibility for any health effect its product...
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...Hot Coffee Documentary Paper Sharon 2014/12/01 The Hot coffee Documentary talked about some real cases about the success of the tort reform movement and its impact on average people in the form of mandatory arbitration contracts. Stella Liebeck, 79-years-old, was sitting in the passenger seat of her grandson’s car having purchased a cup of McDonald’s coffee. After the car stopped, she tried to hold the cup securely between her knees while removing the lid. However, the cup tipped over, pouring scalding hot coffee onto her lap. She received third-degree burns over 16 percent of her body, necessitating hospitalization for eight days, whirlpool treatment for debridement of her wounds, skin grafting, scarring, and disability for more than two years. Despite these extensive injuries, she offered to settle with McDonald’s for $20,000. However, McDonald’s refused to settle for this small amount and, in fact, never offered more than $800. The jury awarded Liebeck $200,000 in compensatory damages — reduced to $160,000 because the jury found her 20 percent at fault — and $2.7 million in punitive damages for McDonald’s callous conduct. (To put this in perspective, McDonald’s revenue from coffee sales alone was in excess of $1.3 million a day.) The trial judge reduced the punitive damages to $480,000, but did state that McDonald’s had engaged in “willful, wanton, and reckless” behavior. In Colin Gurley’s case. Colin was born with cerebral palsy because of medical malpractice...
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...Frivolous Lawsuits: A Comparison of the McDonalds Case and the Pearson Case Michelle DeWald University of Maryland University College Introduction “When there are too many policemen, there can be no liberty. When there are too many soldiers, there can be no peace. Where there are too many lawyers, there can be no justice.” - Lin Yu-Tang Chinese Writer and Inventor Suing companies in hopes of accumulating big money is popular in today’s society. However, many people get immensely creative with their claims, creating lawsuits over ludicrous motivations. Many cases endure for years or longer. Nevertheless, the costs involved in defending a claim can be exorbitant. Unfortunately, despite every precaution, we live in a society where anyone, any business can be sued for anything. Solely because a lawsuit has been filed, however, does not mean the case has merit. This paper discusses two legal cases related to frivolous lawsuits. The first lawsuit was filed against the McDonald’s Corporation by Stella Liebeck in 1994. The second lawsuit was filed against Custom Cleaners by Roy L. Pearson, an administrative judge, in 2007. Both cases are notable and played a major role in guiding small and large companies in their responsibilities to their customers, reducing the risk of litigation, and protecting their assets to avoid unnecessary liability. Both cases will be analyzed by comparing and contrasting the facts, law, and merit. In addition, this paper will examine ethical issues...
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...customers. Though the savvy manager cannot stop people from having the intention and grievances to sue the organization, they can reduce the motive of prospective plaintiffs and in event of a lawsuit happens; effective product liability management mitigates the negative effects on the organization. Management has the duty of making sure the product liability policies and programs of the organization is clear, concise and precise so that the interpretation thereof cannot be turned to work against the organization. Most lawsuits that are directed at organizations arise in the area of torts. The case of Liebeck vs. McDonalds: Relentlessly controversial in nature, this case continued to be the answer to the journalists’ prayer until it was settled. Liebeck vs. McDonalds aroused the interest of both the media and legal community and held public attention for its lifetime. Initially, the case took off like most frivolous lawsuits in which the...
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...Week 7: Case Studies Research Michael Abernathy 11/24/15 AMBA 610 The Facts The circumstances in the case of Stella Lieback v McDonald’s Restaurant consist of a hot coffee burn incident. Stella Lieback a 79- year old woman from Albuquerque, New Mexico visited a drive-through McDonalds. The incident took place on February 27, 1992 as a passenger in her grandsons ’89 ford probe, a vehicle with no cup holders. The case of Roy L. Pearson V Chung better known as the “pants lawsuit” which was a civil case filed in ‘2005. Pearson sued a D.C. dry cleaning establishment by the name of Custom Cleaners, for over $67 million for the loss of a pair of pants. The facts in the case state that the plaintiff left a pair of gray pants that probably could be extricated by a trio of belt loops on both sides of the front waist band. It appears there was a delay in providing the clothing due to plaintiff stating that the pants returned to him weren’t those submitted for service. As a result of the dispute the recourse taken by Custom Cleaners was to provide records and tags with proper documentation belonging to Pearson to resolve the issue at hand. Monetary play of $1,000.00 was the move Pearson made to Mr. Chung in order to rectify the dispute with the cleaners. This led to a refusal by the cleaner owner and Pearson filing a suit in the District of Columbia’s Superior Court. The Issues Presented The issues identified in case are third -degree medical burns from the coffee...
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...mentioned with their case study in operations management. In spite of the fact that McDonalds provides a bank of successful studies in business, there exist several deficiencies in this giant fast-food company’s operations management strategy. This paper will discuss some deficiencies in the decisions of operations management i.e. product design and managing quality as detailed in McDonalds’ Hot Coffee Case. Products design: Among thousands of competitors on the increasingly saturate fast-food market, it is product strategy that mainly contributes to the competitive ability of a company like McDonalds. The core of product strategy is product development system. Therefore, it is reasonable to say: “The product development system may well determine not only product success but also the firm’s failure” (Heizer and Render, 2011, p.190). Going through product development stages figured as follows will help evaluate product options of McDonalds in developing the hot coffee product. Figure 1: Product development stages According to Figure 1 (adapted from Heizer and Render, 2011, Figure 5.3), initially ideas from many sources had been gathered and the ability of the company to carry out the ideas had been considered. The specific idea in McDonalds’ project was serving coffee at drive-thru windows. Then, the product development team started their work with identifying customer requirements i.e. quickly being served with no need to park the car, coffee with delicious taste...
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...ECO 4751 Spring 2013 D. Butterfield Assignment 3 Stella Liebeck v. McDonalds Corporation Facts of the Case Stella Liebeck of Albuquerque, New Mexico, was in the passenger seat of her grandson's car when she was severely burned by McDonalds' coffee in February 1992. Liebeck, 79 at the time, ordered coffee that was served in a styrofoam cup at the drivethrough window of a local McDonalds. After receiving the order, the grandson pulled his car forward and stopped momentarily so that Liebeck could add cream and sugar to her coffee. Liebeck placed the cup between her knees and attempted to remove the plastic lid from the cup. As she removed the lid, the entire contents of the cup spilled into her lap. The sweatpants Liebeck was wearing absorbed the coffee and held it next to her skin. A vascular surgeon determined that Liebeck suffered full thickness burns (or third-degree burns) over 6 percent of her body, including her inner thighs, perineum, buttocks, and genital and groin areas. She was hospitalized for eight days, during which time she underwent skin grafting. Liebeck, who also underwent debridement treatments [removal of dead skin], sought...
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