In a world of get-rich-quick schemes, few are mentioned more frequently than lawsuits. One of the reasons is the infamous McDonalds coffee case (Liebeck v. McDonalds Restaurants). This is what happened in 1992 in Albuquerque, New Mexico. Stella Liebeck, seventy-nine, was riding in a car driven by her grandson. They stopped at a McDonalds drive-through, where she purchased a Styrofoam cup of coffee. Wanting to add cream and sugar, she squeezed the cup between her knees and pulled off the plastic lid. The entire thing spilled back into her lap. The searing liquid left her with extensive third-degree burns. Eight days of hospitalizationwhich included skin graftswere required. Initially, she sought $20,000 from McDonalds, which was more or less the cost of her medical bills. McDonalds refused. They went to court. There it came to light that about seven hundred claims had been made by consumers between 1982 and 1992 for similar incidents. This seems to indicate that McDonalds knewor at least should have knownthat the hot coffee was a problem. Most of the rest of the case turned around temperature questions. McDonalds admitted that they served their coffee at 185 degrees, which will burn the mouth and throat and is about 50 degrees higher than typical homemade coffee. More importantly, coffee served at temperatures up to 155 degrees wont cause burns, but the danger rises abruptly with each degree above that limit. So why did McDonalds serve it so hot? Most customers, the company claimed, bought on the way to work or home and would drink it on arrival. The high temperature would keep it fresh until then. Unfortunately, internal documents showed that McDonalds knew their customers intended to drink the coffee in the car immediately after purchase. Next, McDonalds asserted that their customers wanted their coffee hot. The restaurant conceded, however, that customers were unaware of the serious burn danger and that no adequate warning of the threats severity was provided. Finally, the jury awarded Liebeck $160,000 in compensatory damages and $2.7 million in punitive damages (about two days worth of McDonalds coffee sales). The judge, however, reduced the $2.7 million to $480,000. McDonalds threatened to appeal, and the two sides eventually came to a private settlement agreement.

In ethical terms, justify the original jury award to Liebeck: $160,000 in compensatory damages and $2.7 million in punitive damages (about two days of McDonalds coffee sales).

Of these three ethical structures for conceiving of the coffee-buying consumer and her protectionscaveat emptor, the implicit contract, and manufacturer liabilitywhich do you believe is best? Why?