The next chapter..

1. You acknowledge your first four distinctions are invalid, so you suggest a fifth: an admission supposedly made by McDonald's.

I never made such an acknowledgement.  The first distinction, about the defective cup, is valid.  You questioned whether a jury could have apportioned fault between Bunn and the cupmaker - I believe it could have, if the facts support a theory that the coffee contributed to the collapse of the cup.  The second and third distinctions I made are valid only if Bunn isn't in the shoes of Mobil.  (I'm completely befuddled by the strategic decisions of both parties in Bunn.  This case looks like a great example of what not to do in court.) 

I seriously doubt McDonald's admitted that their coffee was unfit for human consumption.  Why would they even litigate the case if they believed that?  (I know the plaintiff's lawyer said that McDonald's said that.  I suspect he's taking a misleading deposition question out of context.  It's certainly not true in the legal sense.)

I wish someone would donate the cost of getting copies of everything from that case, including deposition transcripts and court transcripts so I could scan them and put them on the site.  Having the entirety of the case available would make analysis much more enlightening.

There's no point in arguing about what someone may have said; neither of us knows for certain.  Assuming arguendo that a McDonald's representative testified "The cup of coffee we sold Mrs. Liebeck was unfit for human consumption," doesn't that firmly establish that McDonald's at least breached the implied warranty of merchantability and of fitness for a particular purpose?

But let's go back to your distinction: are you admitting that McMahon v. Bunn-O-Matic was correctly decided?  If Liebeck had spilled equally hot Starbucks coffee on herself, with the same injuries, and Starbucks refused to make the admission you allege happened, should the case be thrown out before trial?

I don't think I've ever tried to imply that Bunn wasn't correctly decided - it was, for several reasons:

• The defective cup was the proximate cause of the injuries.
• The plaintiffs admitted knowing the coffee was "scalding," "too hot," and "very hot" prior to purchasing it. 
• The plaintiffs had firsthand knowledge that the coffee was extremely hot, as they served it themselves.
• But most importantly, the Bunn plaintiffs had the burden of proving the coffee was unreasonably dangerous.  They didn't.

2. To recover for personal injury from a "defective" product design, most states require the design to be unreasonably dangerous.  The New Mexico statute (13-1406) says "unreasonable risk of injury."  Your acknowledgment that McDonald's coffee was not unreasonably dangerous demonstrates you agree that McDonald's coffee was not "defective."  So we're one third of the way there. 

Unreasonably dangerous and unreasonable risk of injury are two different things.  Unreasonable risk of injury in New Mexico means, "An unreasonable risk of injury is a risk which a reasonably prudent person having full knowledge of the risk would find unacceptable. UJI 13-1407; Fernandez, 118 N.M. at 112, 879 P.2d at 113." 

I now have full knowledge that Liebeck's coffee was served between 180 and 190 degrees, a temperature capable of causing 3rd-degree burns in a few seconds of contact with skin.  I think that's an unacceptable risk for two reasons: First, the Specialty Coffee Association of America recommends serving drip coffee between 155 and 175 degrees.  Second, if McDonald's had served the coffee at 170 degrees, it would have greatly reduced the chances of severely burning their customers, and that reduction would have come with little or no change to the quality of the coffee.

The second point is important, because under New Mexico law, an important factor in determing whether a product poses an unreasonable risk of injury is whether the risk can be eliminated without seriously impairing the usefullness of the product.

Of course, if the coffee wasn't unreasonably dangerous, it can hardly be said to have breached its warranties--the same coffee Liebeck purchased was sold billions of times without incident, and there was no difference between that coffee and what Liebeck purchased.  Coffee is supposed to be hot.

That analysis ignores what I said about the bucket earlier: A bucket with a hole in it breaches its warranty without being unreasonably dangerous.

3. Please e-mail me links to the studies you're talking about.

You've Got Mail!

5. You seem to be saying that caps are not inherently unreasonable.  I certainly would find $250k problematic in certain situations, though not the case of minor negligence in medical malpractice.  I think the correct number is worthy of societal debate.  Better we do it uniformly across the board (at least, in any particular state) through the democratic process than have one jury decide it should be $50 million and another decide it should be $100,000. (Emphasis added.)

The problem is that the figure wouldn't be decided through the democratic process.  It would be decided upon by an interest group that most likely has profit as a motive, not social justice.

Massachusetts has a damage cap I'm ok with - $500k in med mal cases except in cases of death or disfigurement, in which case there are no caps.  I wholeheartedly agree that few, if any, injuries that aren't disfiguring are worth $500k in noneconomic damages.  What's your take on that?

6. Why don't principles of supply and demand apply to insurers?  It's clear that they do--lots of medical malpractice insurers have stopped writing new insurance because they can't charge rates high enough to cover their costs.  Lots of medical malpractice insurers have entered the Texas market, because they think they can win customers by charging less than the incumbents.

But insurers don't just take in premiums, put them in a pot, and pay claims from them.  They invest the premiums and use the profits from those investments to pay claims.  Maybe it's just post hoc reasoning, but I see a pattern: The stock market takes a dive in the late 80's, and then there's a malpractice crisis.  The dot-com bubble bursts, and then there's another malpractice crisis. 

Much of my knowledge of how the insurance industry operates comes from "Premium Deceit."  If you've got another source besides Tillinghast, I'd love to take a look.

GE Medical Protective's request for a rate increase was denied.  I don't think their rate request shows anything other than that, in a regulated market where a public agency, rather than competition, sets prices, insurance companies have an incentive to make high rate requests.  If they're poorly run (as their recent S&P ratings decline perhaps indicates--they're down to A- from AA- in late 2003), the ten new medical malpractice insurers who have entered Texas since reforms have been passed will take their customers.  Also, the 19% was a lot less than the 90% it raised rates in Connecticut.

The main point I wanted to make about GE was that they said damage caps gave them a 1% savings.  That's proof that damage caps aren't the answer to rising malpractice premiums.

http://www.insurancejournal.com/news/southcentral/2004/04/16/41290.htm

Note that Texas is facing a backlog of medical malpractice suits, because lawyers rushed to file many before the tort reforms took place to take advantage of the old laws.

Tell me about it.  When I was there, I saw lawyers literally racing to the courthouse on the last day to file.  Hell, I even saw one woman try to protect her rights by filing a "lawsuit" that said, "I sue Dr. So-and-So for malpractice."

Again, in 2003, medical malpractice costs with $1.375 for every $1.00 in premiums collected across all insurers: Hunter is simply wrong when he claims that the current crisis is the fault of insurers.  (Indeed, his reasoning is that insurers charged TOO LITTLE a few years ago, and are now doing a better job of classifying high-risk professions.  This is small solace to doctors.)  Most medical malpractice insurers are mutual societies consisting of the insured doctors.  Are the doctors conspiring to charge themselves too much?

If doctors are conspiring to do anything, it's to keep the quacks practicing medicine: The National Practitioner Data Bank shows that less than 1/3rd of doctors with ten or more malpractice payouts have been disciplined. 

Take Texas, for example: From January of 2001 to May of 2002, 6,038 claims of malpractice were reported to the state medical board.  How many doctors were disciplined?  None.  How many of the claims were even investigated?  NONE.  That's a broken system.  Doesn't the NPDB also show that around 50% of malpractice payouts come from about 5% of doctors? 

Comments

[Ted]

1. Again, the cup had nothing to do with the court's decision, and the intervening cause of the cup does not distinguish McMahon from Liebeck, because there was an intervening cause in the Liebeck case, also. I'm pleased to see that you have the honesty to acknowledge that Bunn's status as a manufacturer was not the reason for their victory in the case; I've been frustrated by more disingenuous debaters who have refused to admit this.

But are you really attempting to distinguish McMahon from Liebeck by claiming that Liebeck didn't know that coffee was hot? Because she certainly did know that--as McMahon notes, the McMahon plaintiffs' admissions weren't anything more than what every adult coffee drinker knows.

As for "proof", the McMahon proof was the same as Liebeck's: a claim that any temperature above 140 is "unfit for human consumption." http://laws.lp.findlaw.com/7th/974131.html

Plaintiffs know better than to reinvent the wheel, and trade roadmaps to successful verdicts. Go to the ATLA website, where litigation strategy packets for all sorts of types of cases are sold. McMahon didn't lose because they used a different strategy than Liebeck. McMahon lost because the court threw the case out, just as the Liebeck judge should have done.

2. I've looked at the Specialty Coffee Association website, www.scaa.org, and the only thing I can find there relating to the temperature of coffee is an espresso brewing competition where it's supposed to be brewed at 198-202 degrees. Where does one find this 155-175 degree temperature? And why does Starbucks serve their coffee hotter than that?

Note that ATLA and the plaintiff in Liebeck claimed that coffee should be served at 140 degrees. You're also confusing the "hold" temperature of coffee with the "serve" temperature of coffee.

3. As we discussed, the studies do not support the claims you make for them.

5. Interest groups don't get votes in Congress. Elected representatives do, and they are also better situated to make global rules.

6. The fact that the stock market can subsidize insurer losses in flush years doesn't change the underlying economics elsewhere. Medical malpractice insurers only have a small fraction (around 4% for most of the insurers I've looked at) of their assets in the stock market.

I am skeptical that the malpractice crisis is a function of quacks: the vast majority of doctors in high-risk professions such as neurology and ob/gyn have been sued. States with more aggressive medical boards, to my knowledge, don't have lower rates of malpractice costs--mostly because malpractice suits have very little to do with actual malpractice, as the famous Harvard Medical School study showed. See also the discussion at . It would be a good question for study, however.

[Aaron]

Ted, do you have actual statistics based on hard data on malpractice suits against obstetricians and neurologists? I've heard some buzz about voluntary responses to a survey, but as I'm sure you know there's a world of difference between the two. Perhaps you and your friends at Overlawyered can press some of your friends in the insurance industry to release the actual data?

[Ted]

According to publicly available information published by insurer The Doctors' Company, "One in every two neurosurgeons is sued each year, along with one-third of obstetricians, emergency room physicians, trauma surgeons, and orthopedists." I don't have any more weight with insurance companies than you do.

[Aaron]

Hey - no fat jokes. I'm self-conscious. ;-)

I would still like to see actual data, and would still like to know how representative such claims are. But, as you know, insurance companies simply won't release it. Which seems funny, assuming the type of figure you recite is accurate, given that it would seem that they would have the most to gain from public awareness of the actual figures.