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It has been a while since we have shared the facts of the infamous “McDonald’s Hot Coffee” Law Suit, so we felt that it is time once again to share the facts about what really happened, how the case was settled and why the case was settled the way it was. Many of the details get lost over time as to what really happened. Here are the facts:

FACT SHEET: MCDONALD’S SCALDING COFFEE CASE

Stella Liebeck of Albuquerque, New Mexico, was in the passenger seat of her grandson’s car when she was severely burned by McDonald’s coffee in February 1992. Liebeck ordered coffee that was served in a Styrofoam cup at the drive-through window of a local McDonald’s.

After receiving the order, the grandson pulled his car forward and stopped momentarily so that Liebeck could add cream and sugar to her coffee. (Critics of civil justice, who have pounced on this case, often charge that Liebeck was driving the car or that the vehicle was in motion when she spilled the coffee; neither is true.) 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, sought to settle her claim for $20,000, but McDonald’s refused.

During discovery, McDonald’s produced documents showing more than 700 claims by people burned by its coffee between 1982 and 1992. Some claims involved third-degree burns substantially similar to Liebeck’s. This history documented McDonald’s knowledge about the extent and nature of this hazard.

McDonald’s also said during discovery that, based on a consultant’s advice, it held its coffee at between 180 and 190 degrees Fahrenheit to maintain optimum taste. Other establishments sell coffee at substantially lower temperatures, and coffee served at home is generally 135 to 140 degrees.

Further, McDonald’s quality assurance manager testified that the company actively enforces a requirement that coffee be held in the pot at 185 degrees, plus or minus five degrees. He also testified that a burn hazard exists with any food substance served at 140 degrees or above, and that McDonald’s coffee, at the temperature at which it was poured into Styrofoam cups, was not fit for consumption because it would burn the mouth and throat. The quality assurance manager admitted that burns would occur, but testified that McDonald’s had no intention of reducing the “holding temperature” of its coffee.

Plaintiff’s expert, a scholar in thermodynamics as applied to human skin burns, testified that liquids, at 180 degrees, will cause a full thickness burn to human skin in two to seven seconds. Other testimony showed that as the temperature decreases toward 155 degrees, the extent of the burn relative to that temperature decreases exponentially. Thus, if Liebeck’s spill had involved coffee at 155 degrees, the liquid would have cooled and given her time to avoid a serious burn.

McDonald’s asserted that customers buy coffee on their way to work or home, intending to consume it there. However, the company’s own research showed that customers intend to consume the coffee immediately while driving.

McDonald’s also argued that consumers know coffee is hot and that its customers want it that way. The company admitted its customers were unaware that they could suffer third-degree burns from the coffee and that a statement on the side of the cup was not a “warning” but a “reminder” since the location of the writing would not warn customers of the hazard.

The jury awarded Liebeck $200,000 in compensatory damages. This amount was reduced to $160,000 because the jury found Liebeck 20 percent at fault in the spill. The jury also awarded Liebeck $2.7 million in punitive damages, which equals about two days of McDonald’s coffee sales.

Post-verdict investigation found that the temperature of coffee at the local Albuquerque McDonald’s had dropped to 158 degrees Fahrenheit.

The trial court subsequently reduced the punitive award to $480,000 — or three times compensatory damages — even though the judge called McDonald’s conduct reckless, callous and willful. Subsequent to remittitur, the parties entered a post-verdict settlement.

 A variation on this question is also “Will I be harming the person I’m bringing a claim against if I make a personal injury claim?” In either situation, whether there is or is not litigation involved, the person who caused the accident has already had their record tarnished by the occurrence of the accident for which they are at fault. It does not matter whether or not any person injured in that event brings a claim or files a lawsuit. 

Whatever negative things come, if any, which may happen to the person who caused the accident has already happened as soon as the insurance company involved realizes that its insured caused an accident. Many insurance companies do not have anything negative happen to the person unless the accident is one too many. Some insurance companies allow “one free accident” without any adverse effects on the person’s insurance rating. If there is anything negative that happens to an individual who causes an accident, it will either be that his insurance rates or premiums increase somewhat or the insurance company may actually drop him as an insured. 

If the person who caused the accident also received a ticket from any law enforcement entity, he may also have to pay a fine for receiving the ticket. This is the way it should be. When someone causes an accident that causes injury or damage or harm to another individual, he needs to be accountable and responsible for whatever harm or injury he caused. Because of the existence of insurance, the person generally will not have to pay anything out of his own pocket for the damages caused to the party who was injured. However, if he has to pay a ticket, that will be out of his own pocket. Still, that is a fairly light responsibility for injuring another individual in our society. Nevertheless that is the way our system works. 

 We have noticed an increasing number of challenges to Personal Injury Protection (PIP) payments by use of mere medical records reviewing companies. These companies are sometimes based in Arizona, Las Vegas, Florida or other places. They often hire individuals who purport to be DC’s or MD’s who, for a price, supposedly review the records produced by the treating DC and then write a report. The report usually determines that the volume of care is insufficiently documented and/or was unnecessary due to improper or insufficient diagnostic coding. Often, the reviewing agency will also suggest that the prices for the individually CPT-coded treatment modalities exceeds the “usual and customary” rate for such services. Many times we have seen no reference to the Relative Value Study in such a conclusion. When you discover one of these efforts being used to decline payment of Personal Injury Protection benefits, there are several things you need to remember.

First, remember that although the Utah Chiropractic Physicians Association has determined that paper reviewing is unethical, such an objection will not guarantee that the practice will either be stopped or used to allow the court to block the admissibility of the records reviewing physician from testifying in court. Rarely are these physicians members of the UCPA or licensed in Utah. Such lack of licensure and the fact that such practice might be unethical may go to the weight to be given to the testimony and used as a means of impeaching the value of such physician’s testimony. However, most judges will still allow the jury to hear the testimony if the matter were to be tried before a court. Most insurance companies know that these matters rarely go to court, and they are simply using the records reviewing position as a means of avoiding an allegation of bad faith against the insurance company itself. Under case law in Utah, bad faith does not exist if there is even a “fairly debatable” challenge to the actions of the insurance company. If the insurance company can rely upon the testimony of another “expert” to suggest that the care was unnecessary or unreasonable, then they have created a question of fact which they can use to say that the argument was at least “fairly debatable.”

Second, if you are unaware that Section 31A-22-307(2) UCA establishes the Relative Value Study as a means of determining the reasonableness of charge, then you will not be able to effectively battle with an insurance company’s allegation of unreasonableness. Get familiar with that code section and use the Relative Value Study to establish the prices for the codes you are charging.

Third, the biggest argument that most of these records review physicians use is the lack of sufficient documentation. Look at the following paragraph which was taken directly from one such reviewer’s letter:

The patient is a 31 year old female born on 10/27/80 and involved in a motor vehicle accident on October 22, 2011. She has been diagnosed with cervical and thoracic sprain/strain with lumbar and rib segmental dysfunction. Relevant objective findings are unremarkable.

The records have been provided and 67 pages were reviewed. I fee that treatment rendered is excessive. I feel that this injury does not warrant treatment beyond the initial 12 visits. The casual relationship is developed through daily chart notes. The patient stated that she was treated previously in this office, however there were no records to review. The daily chart notes do not contain sufficient objective documentation to support medical necessity for all care rendered to the patient. Treatments on the dates of service in question are not documented as medically necessary. The chiropractic treatment records in this case are quite abbreviated and provide little clinical information. To be considered medically necessary and to support continuation of the treatment plan, the clinical records should demonstrate progressive subjective and measurable objective improvement, with functional gains. Furthermore, the authoritative guidelines call for an interim exam to be performed every 12 visits or 30 days to develop medical necessity. To date and 2 months post injury, there have been no interim exams submitted nor any documented in the billing. These exams would include: orthopedic testing, neurologic testing that includes reflex, motor and sensation testing, nor range of motion testing. With proper interim exams the doctor can monitor progress and design a revised treatment plan. There are no positive orthopedic tests or neurological findings discussed. There are no continuing values for range of motion. I therefore feel that the date of service (12/30/11) with the accompanying CPT codes (98941, 97110, 97140, and 97035) is not medically necessary.

Is the above language really asking too much? Most physicians already do exactly what this records reviewing physician is asking to be done. If you are not doing this approach and are merely using SOAP notes to document your patient’s condition and progress, then you are asking for trouble and when you find it, will not be able to find it to defend yourself or justify your care very effectively. A far stronger approach is simply to improve the quality of your documentation. It really isn’t that difficult. Now, by my suggestion that the above records reviewing physician has a point doesn’t mean to suggest that I like or agree with what they do. These record reviewing “IME” physicians are merely wolves who are trying to prey upon the weakest of the herd. If your records make you look like you are weak, then you will be much more likely to have your billings challenged and your cash flow interrupted. 

 Nearly all doctors I work with have a sort of dichotomy they deal with every day.  It is that personality split between the altruistic, virtue-based, compassionate health care provider and the cold, hard business person who makes the tough decisions. Over-dominance by one or the other can kill your practice.  We all are in a service industry because, among other things, we get a personal, intangible satisfaction from helping people.  You probably don’t like to think with your wallet.  However, doing so in the right way will help you balance your practice in a logical, pragmatic approach that allows your business to thrive while staying rewarding in other ways.  This is a reality you likely know all too well, and one that has given birth to an entire seminar industry.  Lucky for you, I am not a psychologist, spiritual guru or philosopher.  I’m not going to tell you how to find the right balance.

However, it is against this backdrop that I inform you of an incident that happened recently to one good DC who was simply trying to help someone in acute pain.  This doctor had a new patient come into his office who had been experiencing severe low back pain.  After a thorough examination (where he determined this person, while legitimately in pain, had a poor attitude), the DC reluctantly offered the patient some minimal treatment on an intersegmental traction table, set on the lowest setting.  He then had her lay face down on a spinal distraction table, also at a minimal setting.  When there was no pain relief at this point, this DC, using his good judgment, decided that any further treatment would not be appropriate, and recommended that she follow-up with an MD to get some pain relief medicine.  He sent her on her way, and charged her an unremarkable, average fee for the exam and the minimal treatment.

This DC was later contacted by this patient who was unhappy about the charges.  The patient acknowledged that this DC’s time was worth something, but thought he had charged too much.  The DC disagreed, but compromised his charges and sent a partial refund check to the patient.  A few days later, this DC received a letter from an attorney at one of the largest downtown law firms in the state, demanding a full refund, and also threatening legal action in the form of a lawsuit and a complaint to DOPL.  The letter stated that this patient had gone straight to the emergency room following the treatment by this DC, and suggested that this DC had injured the patient (although the letter never said what was wrong with the patient or what additional injury was allegedly caused by this DC’s actions).

Lost in the facts of this story is one simple detail: the patient was an employee at that large downtown firm from whence the nasty letter was sent.  That firm is crawling with insurance defense attorneys itching to take a shot at a chiropractor.  This patient should have been turned away without the doctor touching her.  In hindsight, this DC knew it from the outset by her attitude in the exam room and from the employer listed on the intake forms.  However, this DC simply came out on the wrong side of the internal struggle between compassionate physician and hardened business professional.

The story has a happy ending.  This DC called Larson Law, and we were able to get the matter resolved quickly.  In exchange for a refund of the charges, this DC now has a signed release form from the patient, releasing him from any legal action or liability.  We recommended he not even offer the refund, but this DC wanted a quick and simple resolution, which is understandable.  The moral of the story is that while the claims against this doctor were without merit, the potential trouble could have been avoided by listening to his business self and turning this patient away.  The DC knew going in that this patient may be troublesome. Know who is sitting in your waiting room.  If there is potential for trouble, decline to treat that person.  There are plenty of others who need your help. 

 The recession was short-lived for Utah’s health insurance companies.
Despite halting economic recovery, all but one of the state’s five largest insurers posted robust profits last year.
Some paid fewer medical claims than they expected due to cost-conscious patients delaying or forgoing medical care. Others captured new customers. All benefitted from a rebounding stock market and higher returns on investments.

Yet the companies — including the nonprofits SelectHealth and Regence BlueCross BlueShield, Utah’s two largest insurers — continue to hike premiums while sitting on large reserves.

They defend double-digit increases in rates that they charge as a means to prepare for the unknowns of federal health reform and the likelihood that people will spend more on health care when family finances stabilize.

“It’s important to have modest operating margins so that we can meet our obligation to pay claims and reinvest in the community to help our members,” said Mark Brown, a vice president and CFO of SelectHealth, the insurance arm of Intermountain Healthcare.

But industry watchdogs say insurers are socking away far more than regulations require, begging the question: when will consumers catch a break?

BlueCross BlueShield of Utah netted $16.2 million last year, a sharp reversal from 2009, when the company reported a $25 million loss.

And it built up reserves by 13 percent for a total of $244 million. That’s more than the company had socked away before the recession in 2006, and nearly eight times the amount required by the state Department of Insurance.

SelectHealth is resting on $279.7 million, seven times more than required, and posted a second year of profits.

“This is classic nonprofit behavior,” said Avram Goldstein, communications and research director the pro-reform group Health Care for America Now. “They’re hoarding cash at same time that they’re inflicting massive premium hikes on customers.”

Brown called SelectHealth’s reserve levels “safe and appropriate,” and said,” We have not made an effort to accumulate additional reserves.”

Jake Garn, chief examiner at the state insurance department, agrees: “By and large, health insurers don’t have excessive surpluses.”

He cautions against using reserve requirements as a gauge to determine whether nonprofits are feathering their nests, noting they are just a bare minimum meant to alert regulators to financial weaknesses that put policyholders at risk.

At a time when Americans are losing patience with soaring health care costs, it’s easy to blame insurers, said Garn. “But in Utah the profit percentage for health insurers is at about 1 percent. That’s lower than grocery stores, oil companies, pharmaceutical companies and hospitals.”

Utahns have long enjoyed some of the lowest insurance rates in the nation, but they’re rising with no relief in sight.

BY KIRSTEN STEWART
The Salt Lake Tribune
First published Jul 03 2011 11:08PM 
Updated Jul 7, 2011 08:28AM 

However, these cases are difficult to bring in Utah. Some people believe that all that is necessary for someone to have a lawsuit is for an injury to occur on someone else’s premises. That is not true! Utah law explains that a victim of a slip-and-fall event can recover only with one of three options:

First, the business, homeowner or landlord has a permanently unsafe condition due to having chosen a mode of operation that foreseeably could result in an inherently dangerous condition, or if the premises violate some aspect of the building code that directly led to the unsafe condition.

Second, if there is a temporary unsafe condition created by a business, one of its employees, a homeowner or landlord. Even if the creators did not “know” of the unsafe condition.

Third, the temporary unsafe condition was created by a third party but the business owner, landlord or a homeowner has actual notice of the unsafe condition and has had a reasonable time to fix or correct the condition but has failed to do so. See Jex v. JRA, Inc. dba Hickory Kist Deli, 196 P.3d 576 (Utah 2008).

The most common fact pattern we hear or see is where a customer in a store slips and falls on water or something wet or slippery in the store and injures himself. This might be a good set of facts if the store owner knew of the wet spot and failed to clean it up, or the wet spot was caused or created by one of its own employees. However, if that is not the case, then we probably would decline the opportunity to represent the injured person. It is necessary for us to be able to prove knowledge or notice of the condition or participation by an employee or agent of the store or business before there is a case. The mere occurrence of someone slipping and falling does not automatically allow a claim to be made.

Another common fact pattern is where someone slips on snow or ice on the sidewalk, steps or walkway leading to a home or business establishment. Even if the business owner or homeowner knew of the snow and ice out there, if they can demonstrate that they took “reasonable” precautions to eliminate the snow or ice, there generally is no cause of action. Even if there is some question about this fact, Utah juries are still often very forgiving of the homeowner, business or landlord because, after all, we are located in the Rocky Mountains and snow and ice are a fact of life here. Juries are usually not quick to lay blame at the checkbook of the homeowner or business owner in this kind of case. I have actually had jurors say things like, “Hey, this is Utah. It happens!”

We are currently handling slip and fall cases under a variety of circumstances, and we have been successful with those kinds of cases in the past. However, we are cautious about which kinds of such cases we take. If you have a question about a slip-and-fall case or would like to know whether a condition is something that could lead to a lawsuit, give us a call. We’ll be glad to talk to you about it.

The title “slip-and-fall” is simply a generic reference to what could be labeled “premises liability.” Premises liability takes all forms from drownings in swimming pools to legs being broken due to sticky asphalt crack seal being left in a parking lot. We encourage all homeowners and business owners to take precautions, be careful, and think  “safety!” at every turn. We also encourage everyone to be cautious, watch where you’re going, and watch your step everywhere you go. Most of the time we all go on auto pilot  when we walk through the aisles of a store forgetting that the very nature of the displays are designed to keep our eyes off of the floor and on the goods being sold. So be careful when you shop and as you go about your daily affairs. 

 People love Facebook, Twitter and other social-networking websites to share information about their lives with their “friends.” Twitter will help members “share and discover what’s happening, right now anywhere in the world.”

However, many have learned to be careful with what they share online. Opposing lawyers for disputants in personal injury and divorce cases, for instance, are searching the “social landscape” for evidence.

What Kinds?

Diamond jewelry for a girlfriend of a separated husband who claims he has limited marital assets.
Resumes and job applications from a divorcing wife who requested substantial alimony because she was unemployable.
Photos of a mother in a child-custody case who swore she stopped consuming alcohol, holding a beer at a family get-together.
If someone is in an auto accident and is making the claim that they are hurt, insurance companies will search that person’s Facebook page or Twitter feed to see if there are any pictures of them participating in activities that are not typical of someone who is in pain. For instance if someone is undergoing treatment for neck and back pain but has pictures of themselves playing volleyball on vacation, it will severely damage their credibility.

Others watch social networking sites, too. For instance, law enforcement officials scan them to capture wrongdoers who brag about crimes they have committed. Employers scan job applicants’ pages for embarrassing or even incriminating information and photographs. Therefore, always be mindful of what you post on Facebook, especially if involved in litigation.

Even if you are not involved in litigation it is wise to be mindful of what other ramifications the things you put online may have. Frequently employers will monitor employees’ or prospective employees’ Facebook pages. If an employee rants about their coworkers or bosses online, they may have reason to fire them. If they badmouth a former employer, it may be reason enough not to hire them in the first place.

Also on Facebook, check out the Larson Law page for recent news and helpful information. We will try not to post anything that will embarrass or incriminate us later.