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In: Operations Management

Eighty-one-year-old Stella Liebeck was a passenger in a parked car, when she accidentally spilled scalding-hot McDonald's...

Eighty-one-year-old Stella Liebeck was a passenger in a parked car, when she accidentally spilled scalding-hot McDonald's coffee on herself. (McDonald's allegedly kept its coffee at 180 degrees, 40 degrees hotter than most people serve coffee, to maintain peak flavor). The spill caused second and third degree burns that required skin graphs and left scars.

When McDonald's offered Liebeck $800 of the $2000 medical expenses she had asked for, Liebeck sued. After hearing that there had been 700 complaints about scalding coffee, the jury found for Stella and awarded her $160,000 compensatory damages and another $2.7 million in punitive. The latter were reduced on appeal to $480,000.
How might you use the above scenario to argue for/against tort reform and what do you think should happen if the case were appealed?

Phil Parent purchased a new car from Major Car Company. Two weeks later, he was in a serious car accident when a four-wheel drive drove into the side of his car while he was driving his four-year-old daughter home from school. The driver-side airbag did not open up, and Phil was thrown through the windshield - causing the car to spin around and hit a tree. At that point, the air bag on the passenger side, where his daughter was sitting, opened -- injuring the young girl.

The driver who caused the accident was uninsured and has no money, and little chance of ever having any. Parent and his daughter have both suffered serious injuries. Parent was out of work for six months and lost his job -- his daugher nearly died. Expert testimony established that airbags cannot normally be expected to open when a car is struck from the side. There has been extensive publicity about the risk to small children seated in the front passenger seat.

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