In one of the most widely misreported and misunderstood cases in recent memory, a Albuquerque, New Mexico jury awarded 79 year-old Stella Liebeck $2.9 million for severe burns suffered after she spilled a cup of McDonald's coffee, which she had placed between her knees.

The jury's award was for $200,000 in compensatory damages and $2.7 million for punitive damages (because of McDonald's callous conduct). The jury also found Mrs. Liebeck 20% negligent, reducing the compensatory damages to $160,000. The trial judge also reduced the punitive damages to $480,000. Mrs. Liebeck did not receive $2.9 million, or $2.86 million, or $740,000. The parties entered a post-verdict settlement for a undisclosed amount.

(States have different legal standards with respect to negligence. New Mexico uses a comparative negligence rule, which assigns blame and, therefore, judgments proportionally. Other states such as North Carolina use a contributory negligence standard, which bars a plaintiff from recovery if their actions contributed even 1% to the accident!)

THE FACTS OF THE CASE

Mrs. Liebeck, while a passenger in her grandson's car, purchased a cup of coffee at the drive-thru window at McDonalds. While the car was stopped, she placed the cup securely between her knees and attempted to remove the lid. The cup accidentally tipped over and poured the scalding (180-190