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Individual Paper 2

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Individual Assignment 2: Case Study
Wardell Johnson
AMBA 610
Professor M. Frank

Introduction
It takes constant work to ensure that any given system maintains order. The universe has a natural tendency to lead to entropy “a process of degradation or running down or a trend to disorder” (Merrim-webster.com). What guides Humanity to function in a society in concert with their fellow man? It’s the ability to set up laws to govern the actions of the members of said society. According to researchers Kubasek, Brennan, & Browne (2011) great minds have always debated the purpose of laws. For instance, Plato expressed that law is a form of social control, and Aristotle posited that law is a rule conduct, an ideal of reason (Kubasek et al., 2011). No matter what ones philosophical views are in regards to legal systems whether good or bad, laws help societies maintain a sense of order, setting and maintaining a sense of normalcy, in efforts to prevent societal entropy. In America the foundation of our legal system is based on the U.S. Constitution created the nation’s founding fathers to ensure every citizen equal access to justice. Liebeck v. McDonalds and Pearson v. Chung are two highly publicize cases of Tort law. “The primary goal of tort law is to compensate the innocent persons who are injured or whose property as result of another conduct (Kubasel et al 2011, p.309). Both of these cases involve people who wanted to turn to the American legal system to obtain justice for civil wrong they felt incurred by a business. This paper will render an in depth analysis these two popular cases, exploring the facts, the issues and arguments pose in each case by asking eight critical questions that seek to evaluate the strength of both cases in comparison to one another.

What are the facts of the cases?
Liebeck v. McDonalds
In February 1992 , Stella Liebeck, a 79 year old woman from Albuquerque, New Mexico was driven through a McDonalds drive-through by her grandson. She purchased a coffee. After Liebeck received her coffee her grandson drove and parked the car so she could add the desired amount of cream and sugar to her coffee. She placed the cup between her knees and as she attempted to remove removed the lid the all of coffee spilled in her lap causing severe burns. According to the Journal of Consumer and Commercial Law’s article McDonald’s Coffee Lawsuit (2007) and the Consumer Attorneys of California website there are five salient facts present in this case. First she was not the one in the driver’s seat and the car was not in motion at the time of the incident. Secondly, it was estimated that at the time McDonald’s coffee was served at extremely hot estimated temperatures of 180-190 degrees (Cain, 2007) and when this scorching hot coffee was absorb by sweatpants Liebeck was wearing it caused severe burns to 16% of her body requiring her to have a number of surgeries and skin grafts that left her permanently disfigured and disable for two years. Thirdly, the injuries from incurred forced Liebeck to retire. The fourth fact is that this was not an isolated incident. “McDonald’s had received more than 700 previous reports of injury from its coffee, including reports of third-degree burns, and had paid settlements in some cases” (consumer attorneys of California website). Lastly, Liebeck reach out to McDonalds to settle for $20,000 to help with the medical expenses but they declined offering the plaintiff only $800, so the case went to trial.
Pearson v. Chung
Unlike the Liebeck case, the Pearson v. Chung case does not fall under personal injury but rather the damage of personal property. According to the case overview for Pearson v. Chung located on the Nexus academic search engine, the plaintiff Roy Pearson was a longtime customer of the defendants Soo Chung’s Business Custom Cleaners Located in Washington D.C. In May of 2005, Pearson dropped off a pair of pants off to Custom Cleaners to have the waist of the pants let out. When Pearson returned to retrieve the pants Custom Cleaners informed the plaintiff of a mix up. The pants were sent to another cleaners and would be ready the following morning. That following morning Pearson returned to pick up the alter pants alleging that Chung’s business tried to deceptively give him a pair of pants that were not the pair he previously dropped off. Chung was positive that those were the right pair of pants. Pearson filed charges against Custom Cleaners alleging they were in clear violation of the Consumer Protection act, stating that the satisfaction guaranteed and same day service signs in front of Custom Cleaners are misleading.
What are the issues?
In the Liebeck v. McDonald’s case the main issue was liability. Was McDonalds responsible for the injuries the plaintiff incurred or was Liebeck solely responsible for her own injuries? The other issue that was the temperature at which McDonald’s coffee was served. Was McDonald’s coffee’s temperature too hot and were they aware of the danger associated with the high temperature of the coffee being served? In the Pearson v Chung case the main issue was misrepresentation. Did Chung intentionally use advertisement signs to deceive Custom Clean customers? Another issue that arose was regarding the authenticity of the pants Chung tried to return to Pearson. Did Chung try to deceive Pearson by trying to pass off another pair of pants as Pearson?

What Laws Apply?
The case of Liebeck v. McDonalds falls in the category of negligent Tort. A negligent tort is a “civil wrong, where there is a failure to live up to a standard of care that a reasonable person would meet to protect others from unreasonable risk or harm” (Kubasek et al, 2011 p.331). In the case Liebeck’s legal team argued that McDonald’s standard brewing procedures made coffee reaching temperatures between 180-190 degrees which is beyond industry standards of 130-149 degrees. Liebeck alleges that this carelessness is responsible for her injuries. (Journal of Consumer and commercial law). In the case of Pearson v. Chung the major laws that were assessed were the violation of District of Columbia Consumer Procedure Act. “Those provisions of the CPPA read that
Shall be a violation of this chapter, whether or not any consumer is in fact misled, deceived or damaged thereby, for any person to: (a) represent that goods or services have a source, sponsorship, approval, certification, accessories, characteristics, ingredients, uses, benefits, or quantities that they do not have;
(d) represent that goods or services are of particular standard, quality, grade, style, or model, if in fact they are of another”(LexisNexis, 2008). Pearson argues that by Custom Cleaners having both misleading signs they fail to live up to the standards advertised.
This case also argues elements of common law fraud claim. To establish fraud the plantiff must establish clearly “(1) a misrepresentation of a material (significant) fact, (2) made with intent to deceive the other party, (3) who reasonably relies upon the misrepresentation, (4) and as a result is injured” (Kubasek et al., 2011 p.275).

What did the Judge and/ or jury decide? In the case of Liebeck v. McDonald the jury ruled in favor of Stella Liebeck holding her only partially responsible (20%) for the injuries she incurred. The jury award her $160,000 in compensatory damages and 2.9 million in punitive damages (Cain, 2007). According Kubasek et al (2011), compensatory damages seek to help restore the victim of affected by the tort, and punitive damages are in place to punish the party responsible for the harm cause and prevent future infractions. The jury issued such high punitive damages because of the calloused disposition of the McDonald’s corporation. The presiding judge reduced the punitive damages to $650,000. The judge had the parties settle for an undisclosed amount privately. The judge Scott said “I think that there was evidence and argument about the Defendant’s knowledge that the coffee could cause serious, third degree, full tissue burns. The Defendant McDonald’s knew that the coffee, at the time it was served, was too hot for Human consumption” (Cain, 2007). On the other hand in the matter of Pearson v. Chung the judge ruled in the favor of the defendant, Chung. Pearson was not able to support his claim that the defendant violated the Consumer Protection Act. Also Pearson did not provide sufficient evidence that his pants were lost. The jury conferred that Pearson interpretation of satisfaction guaranteed extends outside the scope of a reasonable persons’. The claim of fraud was rejected on common sense basis of the reason of average person. The court’s judgement was that the CPPA act was not violated and that Pearson’s claim $54 million dollar compensation for his lost pants was dismissed. Pearson was ordered to pay Chung’s court fees.

Did the judge and/or jury make the appropriate decision? Why or why not?
In the case of Liebeck v McDonalds the jury and the judge made the best decision considering all the evidence presented in the trial. According to Kevin Cain author of McDonalds Coffee lawsuit “The evidence at trial was simply damning”. At trial McDonald’s own quality assurance manager testified that the coffee was routinely served at dangerous temperatures (180-190 degrees). Also Liebeck originally wanted to settle for McDonalds to cover her medical expenses, but they refuse to comply with her $20,000 medical bill claim, even though McDonalds had a prior record of paying out settlements to victims burned by their coffee. This fact evinced to the members of the court that multi-billion dollar corporation McDonalds were fully aware of the safety dangers of their product but chose to be negligent in protecting the customers they service every day. The fact that the jury acknowledge Liebeck had partial responsibility for the injuries incurred showed that the court objectively analyzed both sides of the argument. The judge also lowered the punitive damages in order to be fair to both sides. In the case of the Pearson v. Chung, unlike Liebeck, Pearson did not have the same strength of evidence against the plaintiff Chung. In the case over view Pearson mentions financial his financial troubles. This could showed the judge and the people of the court a possible ulterior motive for his lawsuit against Custom Cleaners. This coupled with fact he failed to have provide evidence to substantiate his claim that the cleaners violate the CPPA and that his pants were lost and worth $54 million, the court was appropriate in dismissing Pearson’s claim.

What are the ethical issues in the cases? Do the ethical issues differ from the legal issues? If so how?
Ethics in its purest form is the study of right and wrong. The above cases brought up issues of business ethics, “the study of the moral practices of the firms that play such an important role in shaping that better world” (Kubasek 2011, p.203). In the case of Liebeck v. McDonalds the ethical issues present in this case is social responsibility, a business’s ownership of the impact their profit and nonprofit activities have on society. McDonalds did not want to take responsibility for the impact that the dangerous coffee temperatures had on members of society. McDonalds brewing coffee temperatures at 180-190 degrees also violates the industry code of ethics. McDonalds violates the code that calls for honest and fair treatment when the food chain did not fully disclose the danger of the coffee temperature. In that same breath McDonald’s negligence violates the industry ethic codes that enforces acceptable levels of safety. In this case the ethical and legal issues are similar. Similarly the ethical issues and legal in the Pearson v. Chung case bring up industry of code of ethics, but falls under false advertisement. The industry code of ethics prohibits deceptive advertisement. Pearson’s Allegation that Custom Cleaners practice false advertisement was dismissed because lack of evidence also voiding his claim that the cleaners violated the legal CPPA (Kubasek, 2011).

Both of these cases have been described as “frivolous lawsuits” based on your research what do you think?
It is my opinion the Liebeck v. McDonalds case was not frivolous based on the fact that the evidence presented at trial was solid and consistent. McDonalds did not mind endangering their customers with their coffee temperatures. The record showed that they were knowledgeable of the dangers from prior injuries incurred by customers handling their coffee prior to the Liebeck’s case. If they showed any social responsibility in these early incidents they would have lowered the coffee temperature to a safer temperature, or put visible caution signs on the cup in order to keep the customer informed. Everyone knows coffee is “hot”, but no one expects coffee be so hazardous that it can cause 3rd degree burns. Just imagine if the coffee temperatures were lower when Liebeck spilled her coffee then maybe her injuries would not have been so severe. This lawsuit served as an industry warning to always consider social responsibility of big business to protect or informed them of adverse dangers of their products.
In the other hand in the case of Pearson v. Chung lack clear motive and sufficient evidence making this indeed a frivolous case. Pearson’s claim for a $54 million dollar law suit did not match the alleged violation of Chung and Custom cleaners. The problem did not lie in him trying to get restitution for his alleged lost pants. I believe he was trying to exploit the law for his own personal gain, but in the end justice prevailed

Regardless of what you think of the lawsuits, how the businesses could prevented them?
McDonalds could have prevented Liebeck’s lawsuit by to two effective strategies. The first strategy that would have prevented this particular incident would have been a proactive overhaul of their brewing process to make coffee safer. The quality assurance team could tested different brewing. Methods that would retain a great quality at a lower temperature. Also, they could have placed caution warning on the cups so customers can be remind to handle with care. As a result of the lawsuit McDonalds have made many improvements to their coffee brewing and packaging. The second strategy that would have been agreeing to settle Stella Liebeck’s medical bills. Liebeck was not on a mission of greed, she just want compensation to recuperate what she had lost. I know in retrospect McDonalds wish they had settled with her and paid her $20,000 in medical bills. Now Custom Cleaners could have prevented this debacle by not misplacing the pants, with that, the company should improve the efficiency of their organization system. If Custom Cleaners never initially sent Pearson’s pants to the wrong store he then would not have the suspicion that they lost his pants. Also Custom Cleaners should be clearer in their advertisement, so in the future, consumers will not to take advantage of them.

Conclusion
In closing, the above two cases Liebeck v McDonalds and Pearson v Chung were highly publicized examples of tort law. They both received a lot of media attention as a result of the large sums of money involve in their litigation. At first glance, a case about a lady on spilled coffee on herself and then suing the store or a man suing for millions for the cleaners losing his pants seem very frivolous. The truth is that a responsible individual must evaluate all facts before coming to an opinion regarding a case. Once I set my personal ideas aside and analyzed the facts it was apparent that Liebeck case against McDonalds was far from frivolous. While Pearson’s claim against Chung turned out to be very frivolous because he lacked evidence to support the claim. It is critical as scholars we look beyond the service to find the embers of justice within our legal system

References
Cain, Kevin. (2007)Journal of Consumer & Commercial Law - pp. 14-19 - Journal of Consumer & Commercial Law
Consumer Attorneys of California. The McDonald’s Hot Coffee Case. Retrieved from https://www.caoc.org/?pg=facts
Kubsek, N. K., Bartley, B. A., Brown, M. N. (2011) The Legal Environment of Business: A
Critical Thinking Approach 6th Edition. Pearson Education, Inc., Upper Saddle River, New Jersey
MerriamWebster.com. (2015). Entropy. Retrieved from http://www.merriam- webster.com/dictionary/entropy
Pearson v. Soo Chung. 961 A.2d 1067 (2008). Retrieved from LexisNexis Academic database

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