Like a zombie stubbornly shambling toward you, the McDonald’s coffee story refuses to go down, despite the fact that the real case is far different from what people have heard.  A respected journalism professor has called it one of the most misunderstood stories of our time.

79-year-old Stella Liebeck bought a cup of takeout coffee at a McDonald’s drive-thru in Albuquerque and spilled it on her lap. She sued McDonald’s and a jury awarded her nearly $3 million in punitive damages for the burns she suffered.

Typical reaction: Isn’t coffee supposed to be hot? And McDonald’s didn’t pour the coffee on her, she spilled it on herself! Besides, she was driving the car and wasn’t paying attention.

Now for the facts:

Mrs. Liebeck was not driving when her coffee spilled, nor was the car she was in moving. She was the passenger in her nephew’s car, that was stopped in the parking lot of the McDonald’s where she bought the coffee. She had the cup between her knees while removing the lid to add cream and sugar when the cup tipped over and spilled the entire contents on her lap.

The coffee was not just “hot,” but dangerously hot. McDonald’s corporate policy was to serve it at a temperature that could cause serious burns in seconds. Mrs. Liebeck’s injuries were far from frivolous. She was wearing sweatpants that absorbed the coffee and kept it against her skin. She suffered third-degree burns (the most serious kind) and required skin grafts on her inner thighs and elsewhere.

Liebeck’s case was far from an isolated event. 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.

Mrs. Liebeck offered to settle the case for $20,000 to cover her medical expenses and lost income. But McDonald’s never offered more than $800, so the case went to trial. The jury found Mrs. Liebeck to be partially at fault for her injuries, reducing the compensation for her injuries accordingly. But the jury’s punitive damages award made headlines — upset by McDonald’s unwillingness to correct a policy despite hundreds of people suffering injuries, they awarded Liebeck the equivalent of two days’ worth of revenue from coffee sales for the restaurant chain. That wasn’t, however, the end of it. The original punitive damage award was ultimately reduced by more than 80 percent by the judge. And, to avoid what likely would have been years of appeals, Mrs. Liebeck and McDonald’s later reached a confidential settlement.

Here is some of the evidence the jury heard during the trial: 

McDonald’s Operations Manual required the franchisee to hold its coffee at 180 to 190 degrees Fahrenheit;

Every one of McDonald’s competitors tested served their coffee between 30-40 degrees cooler.

Coffee as hot as McDonald’s, if spilled, causes third-degree burns (the worst kind of burn) in three to seven seconds;

Third-degree burns do not heal without skin grafting, debridement and whirlpool treatments that cost tens of thousands of dollars and result in permanent disfigurement, extreme pain and disability of the victim for many months, and in some cases, years;

The chairman of the department of mechanical engineering and bio-mechanical engineering at the University of Texas testified that this risk of harm is unacceptable, as did a widely recognized expert on burns, the editor in chief of the leading scholarly publication in the specialty, the Journal of Burn Care and Rehabilitation;

McDonald’s admitted that it has known about the risk of serious burns from its scalding hot coffee for more than 10 years — the risk was brought to its attention through numerous other claims and suits, to no avail;

In the 10 years prior to the case, McDonald’s coffee burned more than 700 people, many receiving severe burns to the genital area, perineum, inner thighs, and buttocks; 

Not only men and women, but also children and infants, have been burned by McDonald’s scalding hot coffee, in some instances due to inadvertent spillage by McDonald’s employees;

McDonald’s admitted at trial that its coffee is “not fit for consumption” at the time it’s sold because it causes severe scalds if spilled or drunk;

McDonald’s admitted at trial that consumers are unaware of the extent of the risk of serious burns from spilled coffee served at McDonald’s then required temperature;

McDonald’s admitted that it did not warn customers of the nature and extent of this risk and could offer no explanation as to why it did not;

Liebeck’s treating physician testified that her injury was one of the worst scald burns he had ever seen.

Moreover, the Shriner’s Burn Institute in Cincinnati had published warnings to the franchise food industry that its members were unnecessarily causing serious scald burns by serving beverages above 130 degrees Fahrenheit.

In refusing to grant a new trial in the case, Judge Robert Scott called McDonald’s behavior “callous.”

In its ruling in the punitive damages phase, the Court found that McDonald’s had engaged in “willful, wanton, and reckless” behavior.

An expert witness for the company testified that the number of burns was insignificant compared to the billions of cups of coffee the company served each year.

At least one juror later told the Wall Street Journal she thought the company wasn’t taking the injuries seriously. To the corporate restaurant giant those 700 injury cases caused by hot coffee seemed relatively rare compared to the millions of cups of coffee served. But, the juror noted, “there was a person behind every number and I don’t think the corporation was attaching enough importance to that.”

In a story about the case published shortly after the verdict was delivered, one of the jurors said over the course of the trial he came to realize the case was about “callous disregard for the safety of the people.” Another juror said “the facts were so overwhelmingly against the company.”

That’s because those jurors were able to hear all the facts — including those presented by McDonald’s — and see the extent of Mrs. Liebeck’s injuries. Ask anyone who criticizes the case as a “frivolous lawsuit” that resulted in “jackpot justice” if they have done the same.

I consider trial by jury as the only anchor ever yet imagined by man, by which a government can be held to the principles of its constitution.  -Thomas Jefferson

Jury duty is a privilege and an obligation. If you are called, go serve with pride. Who knows when it may be you who needs a jury on your side.

When you go for medical treatment, the staff always asks for a copy of your health insurance information and then they bill your health insurance. If you are injured, the insurance process is very different. The medical facility not only wants to know who your health insurer is, they want to know about any other insurers: worker’s compensation, the insurer for the person who hit you, your automobile insurance. Why do the facilities ask for this information? The medical facility wants to figure out  if any other types of insurance may be applicable. For example, worker’s compensation, automobile insurance (yours or the person who injured you). They want to know all possible insurers to see who will pay the most on their bill. If you have ever looked at your explanation of benefits from your health insurer after a visit with your doctor, you will see that what you were billed and what was paid by your health insurer are often two different amounts. Health insurers and medical providers have negotiated amounts that they will pay and accept for various treatments/procedures. When an insured is injured and other insurers are involved, medical providers use that as an opportunity to try to get out of the negotiated reimbursement rate they agreed upon with the health insurer. The medical provider will attempt to bill insurers with whom they may not have agreements. The lengths to which these medical providers go in order to extract the largest payment continues to expand. For example, our office had a recent case in which a senior citizen who was riding in a car that was struck by a drunk driver was hospitalized for several weeks. Her bill from Summa was over $100,000. The lady was on Medicare and had a supplemental insurance policy with Medical Mutual. All of the doctors and various outsider medical providers involved in her care billed Medicare and Medical Mutual and were paid. 

Summa, however, elected not to bill Medicare and instead tracked down the responsible auto insurance company and sent their bill to an entity called American Medical Recovery and had them claim a lien on the proceeds from the insurance company of the person responsible for the collision. The responsible insurance company had a $100,000 policy limit. The responsible insurance company ultimately offered to settle their case for $100,000 (their policy limits). As there was no other insurance coverage available, the $100,000 limits were accepted. Then the responsible insurance company said, “Should we just send the check for $100,000 to American Medical Recovery since they claimed a lien in excess of $100,000?” Obviously, that would leave our client with nothing and would reward Summa for their creativity in refusing to accept the health insurance coverage that our client had at the time.

Let’s examine the legal issues here. Ohio has a statute that states healthcare providers must bill health insurers. You would think that statute would resolve the issue. By law Summa must bill the healthcare insurer, however, the Ohio Supreme Court in their own infinite wisdom has ruled otherwise. Thumbing their collective noses at the statute, the court recently held that a healthcare provider may bill whomever they like but can also collect from whomever they like. According to the Ohio Supreme Court, Summa’s action is perfectly legitimate. If our firm had adopted this position, our client would have received nothing. Summa would be paid $100,000, and our client the victim of a drunk driver who left her with some permanent injuries would get nothing. Well, that won’t happen on our watch. The thought of that prospect offends the common sense of justice. Decisions like this roll out of the Ohio Supreme Court on a regular basis and the average Ohio citizen has no idea of the implications of the rulings made by this court. Supreme Court decisions are set in the abstract and are frequently not easily grasped by voters.

Citizens receive a very rude awakening when they are confronted by an incident in which they find themselves injured and subsequently incur a large amount of medical bills. Ultimately, we must  blame ourselves, the Ohio electorate for electing politicians and this includes most judges or justices. Many of these politicians gained their positions with the financial backing of big business, the insurance industry and/or a special interest group. We as the electorate choose our judicial candidates by listening to sound bites on television created as advertising campaigns that are bought and paid for by a who’s who in the insurance industry.

Citizens who don’t vote, have no right to complain. Citizens who do vote need to look carefully at those seeking election. Who is financing their campaign? What is the agenda of those financing the campaign? What is the agenda of the candidate? It is our obligation as voters to pay attention to who we elect and what they do.

As Justice Warriors for our clients we are always looking for laws (tools) to use in our quest to seek justice for our clients. Help us help you. Vote for those who truly care about people.

The Ohio Legislature recently passed legislation beneficial for injury victims. If we represented you in the past, you may recall at the conclusion of the case, we discussed the various parties requiring payment. Health insurers, auto insurers and disability insurers all have their hand out to get any money back they paid to an injury victim. In the past insurance companies did not have the right to be reimbursed. Changes in insurance company contracts and legislation ushered in an era of subrogation, a right on behalf of insurers to “re-coop” their expenses, and obtain reimbursement, from their insured, when their insured recovered money for an injury. We think it’s unconscionable that insured’s have to pay for coverage for unforeseen events and then insurers on top of their hefty profits try to seek reimbursement for what they were obligated to pay.

Has anyone ever been refunded the premiums they paid for coverage when an insurance company gets reimbursed? Contact our office if an insurance company willingly refunded money. When subrogation and reimbursement policies started, the Ohio Supreme Court developed a Make Whole Doctrine.  Quite simply it states that before any insurance company can seek money the injured party has to be fully compensated. We think that only seems right.  The insurance companies, however, were not happy. They demanded the first dollar and every dollar until they were fully paid.  Then if any money remains, the injured party could retain what was left. 

The insurance industry poured a great deal of money into judicial and other political campaigns to assure their position carried the day. The Make Whole Doctrine was cast aside and the law of the land became: insurance companies first. This created scenarios where people who sustained severe injuries and huge medical bills recovered nothing because the health insurer took all of the available  recovery leaving the injured party with a shattered life, inability to work and no compensation. We are shocked that insurance companies could look at an injured party and take all the money even though the victim has to live with a horrible injury.  They argue that this policy helps keep premiums down.  Have any premiums gone down?

The unacknowledged problem with that approach is that society will pay the tab for the injured person to be on social security, welfare, Medicaid and Medicare while the health insurance industry executives pull down big salaries and donate big money into elections.

So what has our legislature done recently to ameliorate this problem?

They passed House Bill 64, which provides that insurance companies can only receive their proportionate share of the recovered funds available when the injured party is confronted with a less than full recovery.  The law went into effect this fall. It is not nearly as good as the Make Whole Doctrine, but it is a far sight better than what has been the law. After about a decade and a half of the law consistently and repeatedly diminishing the rights and recovery abilities of injured people there is finally a change for the good. The insurance industry has fought this bill. Several states have outright banned subrogation and reimbursement. Ohio is behind the curve but at least we have finally turned the corner.

A Letter to Our Clients

Dear Clients, Friends, and Family:

November 8, 2016 is Election Day and it is fast approaching. In addition to the high profile races saturating the airwaves, there are a number of judicial races that are important to our community here in Northeast Ohio. Every election cycle we are asked by clients, friends and family what our opinion is regarding judicial candidates as we deal with the judicial process on a daily basis. To that end, below this letter is a sample of the ballot with some of the judicial races that are before   us this year.

Our higher courts, and in particular our Ohio Supreme Court, have become severely off-balance.   In the last decade Ohio became a national story as the insurance industry poured millions of dollars into a high-stakes takeover. In the midst of this feeding frenzy, one of our most respected justices stated to a national news organization:

“I never felt so much like a hooker down by the bus station in any race I’ve ever been in as I did in a judicial race.”

That’s Justice Paul E. Pfeifer, who had previously served as a state senator and representative. He had been through at least six elections before his first judicial campaign, so he knows what he’s talking about. Traditionally these had been ‘sleepy’ races, but no longer.  Accordingly the current Court is 6-1 and many of its justices were the beneficiaries of this massive spending. (This was supposed to somehow lower your insurance rates. Please call us if that worked out for you.) The candidates we have endorsed are underfunded, outgunned, disrespected by boardrooms and Wall Street, but the sort of folks who have repeatedly said no to the powerful and will remember that   the courts are there to serve the people.

At the trial court level, we have focused on the general division races, as these are the courts that hear general civil and criminal cases (as opposed to the specialized courts such as probate, juvenile, and domestic relations). General division courts have the busiest and varied dockets in Ohio, and it is crucial to have judges who can manage these complicated, heavy workloads.

As the majority of our clients reside in Summit, Stark, Portage, and Medina counties, we have limited our county-level races to these counties. As it happens, there are no general division contested races in Portage and Stark counties this year. When you read the next article, you will understand why.

Our recommendations are in bold. We urge you to take this with you to the polls and share this with your friends and families. While these races may not be as high profile as the presidential election, they are very important. We strongly encourage you to vote and make your voice heard.

Early voting has already begun in Ohio. For further information please visit the Secretary of State at www.sos.state.oh.us or your local board of elections. If you have any questions about the judicial candidates or if you need assistance getting to the polls, please let us know.

The politics of the Judiciary 

Below is a list of judges who come to mind that have served as a judge in Summit County since 2010 but are no longer sitting as a judge:

1) Jane M. Davis

2) Clair E. Dickinson

3) Eve Belfance *  

4) Judith L. Hunter *   

5) Patricia Cosgrove

6) Bill Spicer

7) Brenda Burnham Unruh

8) Thomas Parker *

9) Thomas M. McCarty

10) John Holcomb

11) Todd McKenney *

12) Christine Croce *

13) Greg Macko

     *   Multiple courts

A few have retired. Most however have been either moved to another location through the political process or defeated in a race for the seat they held.

In Summit County there are 29 state judicial seats including Municipal Court, The Court of Common Pleas and The Ninth District Court of Appeals which happens to sit in Summit County.  Elected Judges serve a 6 year term. As you can see by the list of judges who’ve come and gone in the last six years, there is a high attrition rate in being a judge in Summit County. By comparison in Portage and Medina Counties we have the following statistics. There are 12 state court judicial seats in Portage County and 11 judicial seats in Medina County. Since 2010 the judges who have   left the bench in Portage County are Judge Thomas Carnes, Judge John A. Enlow, Judge John Plough and Judge Joseph Giulitto and they left due to retirement after many years of service as a judge.

Since 2010 the judges who have left the bench in Medina County are Judge James Kimbler and Judge John J. Lohn and they left due to retirement after many years of service as a judge. So why   is it in Summit County that we have such a turnover of judges? The answer is simple: politics. When there is a vacancy on the bench, a judge is appointed by the governor. As the current governor is a republican, all of the appointments since Governor Kasich came to office have been republican. Likewise his predecessor Governor Strickland, a democrat, only appointed democrats. Usually whenever a  judicial seat is up for election, it is a contested race with someone running from the opposite party in Summit County. What that brings us to is many of the judges are more politician than they are lawyer. We have judges with little or no experience coming on to the bench. We have one sitting judge right now that one of us has never met despite having cases in her court and hearings set before her. Magically she’s never been there at any of these. The point being that we represent clients in these courts and we have a good feel for the judges who actually work.

Our recommendations in this newsletter do not show a judge’s political affiliation. A judge’s political affiliation means nothing to us. We have good and bad judges who are both democrats and republicans. We are more interested in a judge who has a good work ethic and their experience; work ethic being the more important factor. Thus we take the recommendations we make in this newsletter seriously and we ask that you urge every member of your family to vote and urge you to have your friends, neighbors, and relatives vote as well and share this guide with them.

We currently represent a young married couple and their case just took a bizarre turn.  They had been visiting the wife’s parents on Easter Sunday, and around 7pm were driving home with their 5 children in their minivan. They had traveled less than 2 miles up the road when a drunk driver blew a stop sign, T-Boned their minivan, and sent both vehicles rolling into a corn field.   The at fault driver refused to be tested for alcohol, but given his severe injuries he had to be life flighted, and as a result his blood was taken. His blood alcohol level was well above the legal limit. The impact was so devastating that two life flights were scrambled to the scene and six local fire departments sent squads.  The injuries to the family ranged from minor cuts and bruises to several fractured bones. 

The insurance company for the drunk driver has refused to adequately compensate the family.  And startlingly, it has now filed a counterclaim against the family seeking money damages from them for the drunk driver in the event that a verdict is returned against him.  This cockeyed theory is based on the idea that somehow, if it turns out in the course of the case that any of the children were not properly secured in a seat, the victims of this incident owe the drunk driver money.  Again, suit has just been filed and no testimony has been taken.  There is no evidence of any child being improperly restrained; this is just a “Hail Mary” the Defendant has heaved into the courthouse.

Defendants have many rights under the law.  They can raise various defenses, and these range from “you have the wrong person” to “you ran out of time to file your claim” to things like “you failed to mitigate your damages by not wearing a seatbelt.”  That’s all well and good.  But to have a Defendant– a drunk driver no less– seek money damages from the family whose lives he hurt; that’s a new low.  Stay tuned for the outcome of this case.

Insurance, at its heart, is a bet by both sides. You are paying money out of your budget for protection from large losses: a totaled vehicle, a house fire, being off work for months due to an injury.  The insurance companies are betting that all of the premiums they take in will total more than all of the claims they pay out. Every month you pay your premiums without a claim is like a little side-bet that they win.  Whenever a claim occurs, you are asking them to honor their end of the bet, step up, and deliver the protection they promised.  Whenever they can squelch on that bet, they will.

You are not part of the claims process very often (if ever).  Insurance companies live and breathe it and are always looking for ways to minimize claims. 

One particularly insulting insurance tactic is to give themselves credit for money you have been paid by other companies.  The harmless-sounding term they use for this is “set-off.”  To illustrate this, let’s switch gears for a moment to a different kind of bet: scratch-off lottery tickets.  Say you have the good fortune to purchase two winning tickets; one for $3,000 and one for $5,000. Sounds like you won $8,000, right?  Not in the insurance world.  In their tortured thinking, you get the $3,000 ticket, and then they get to “set off,” or in other words, take away, those winnings from the $5,000 ticket, magically transforming it into a $2,000 ticket.  $3,000 plus $2,000 = $5,000 total to you, not $8,000.  When the dust settles, it’s like the $3,000 ticket never happened.  And to add insult to injury, let’s say they deducted the $4 you spent for the tickets from your winnings.

Obviously the Ohio Lottery does not work this way.  But insurance companies are constantly pushing for changes to the law that can infect the claims process with twisted math like this. What’s worse is that this hurts injured friends and family members, not scratch-off ticket buyers.  For a real world example, if you paid them to cover your injuries caused by an uninsured motorist, they owe you for any medical bills you accumulate as a result.  Sometimes they will sell you and you will pay an additional premium for medical payments coverage as well.  This also pays for medical bills. If your medical bills exceed one coverage or the other, you purchased extra protection through the additional coverage, but insurance companies usually do not see it that way and will set the one off from the other. They may set off the coverage from the other driver, or health insurance, or all of these.  To add insult to injury, they have refused to lower their premiums after making all of these coverage ever more fantasy than reality.

The insurance industry counts on no one paying attention to  these issues.  In a future issue we will discuss why a clear and consistent rule requiring them to honor every coverage they have been paid for is better.

We all know that automobile dealers want to sell cars. But did you know that if a customer leases an automobile, the end result is the dealership sells the car. In a lease deal, the car gets sold to some financial institution that in turn is going to finance the lease. Generally customers are savvy enough to know how to negotiate the price of a car. There are plenty of services online that can provide the true value of an automobile. A lease however gives automobile dealers the opportunity to introduce multiple variables into the equation. How many miles a year are you allowed to drive before you have to pay for excess mileage? What is the residual value of the car at the end of the lease term? What is the value of the car that is being leased? What interest rate is being used? All of these numbers can vary and can change the outcome of the monthly lease payment. It is not uncommon for a dealership to be involved in hours-long negotiations in the showroom over the purchase amount and the associated monthly payments on the purchase. After an impasse is reached, many hours later, the dealership introduces a lease with numbers that are favorable to what the customer was seeking in terms of the monthly payment. If the customer is only focused on the monthly payment amount, the lease suddenly looks attractive. Buried in that formula however is the value of the vehicle. We often see leases where the number used by the dealership for the value of the vehicle is a number higher than what the customer could have purchased the vehicle for outright at the time. For example, the vehicle has a window sticker price of $24,000. The vehicle can be purchased for $21,500. The car ultimately ends up being leased and  the value of the vehicle is listed at $26,000. The customer may be happy with the payment numbers but the dealership is really happy because they just sold a car for $2,000 more than the sticker price and $4,500 more than what they would’ve sold it for to someone who came in to just buy the vehicle. The agreed upon value of the car in the lease agreement is the amount the dealership gets paid for selling the car to the finance company who in turn is going to accept payments over time from the customer. The bonus to the dealership is then at the end of the lease term the customer will return a car to them that they get to sell (again) and they have the customer back in the showroom in need of another vehicle. The attorneys at Willis & Willis have reviewed many auto leases. We would be happy to take a look at your lease for you prior to your signing it to help you understand the lease.

When I first started representing injured people 30 years ago, the rule was that whatever the medical provider billed was legally presumed to be the reasonable amount for the medical services provided. Back then, if you had health insurance coverage, your medical bills would be paid by your health insurance.  You did not have to pay your health insurer back if you recovered the cost of your medical bills back in an injury claim.  After all, you paid for or worked to obtain the health coverage. That is not the case now. The law now allows the health insurer to get their money back from you, if you collect it from the responsible party for your injury. With the pay to play politics in Ohio the insurance companies bought their way to changes in the law that dramatically favor them at the expense of the injured person and their treating physicians.

Insurance companies ratchet down the reimbursement rate to health care providers. Insurance companies control these reimbursement rates. Changes in the law sought by the insurance industry allow these same insurers to argue that the discounted amount that they decide and then pay to medical providers is the reasonable value of the medical services as opposed to the amount that was originally billed by the medical provider. Not satisfied with control of what they pay out by setting reimbursement rates to medical providers; the insurance industry demands that they be reimbursed for all amounts they have paid toward medical bills for an injured person. Even if that leaves no funds for the injured person. There are a couple of problems with that process. First, insurance companies will not do any of the work to go collect money from the responsible party for injuring someone. They want the injured party to do all the work. Second, if the injured party’s medical bills exceed the amount of insurance coverage available, the health insurer wants all the money and the injured party ends up getting nothing. As best as we can see, Ohio is in a unique position in all the states.  We are the only state where an insurance company can unilaterally reduce the “reasonable value” of medical care by controlling what they pay medical providers and in the end demand they be paid back all money they paid toward medical care, regardless if the injured  person ends up with any money to compensate them for their injuries and damages. We are aware of no other state in the union that allows insurance companies such an advantage on both offense and defense, so to speak. It is a double standard and stacks the deck in favor of the insurance industry. 

I am not a fan of Governor Kasich because some of this has come about on his watch. But I must give him credit for signing into law a bill recently that addresses this problem. This new statute says in essence that when there is not enough money to pay back the insurance companies and to pay the injured party a “fair” amount for their injuries, then there must be some equitable division of the funds between the injured party and the insurance company. This statute is a shift, albeit a small one, in the path to do away with the right of injured parties.