What Are Punitive Damages?

By Jedidiah McKeehan

A term you may have heard of is punitive damages.  But what exactly are punitive damages?  Punitive damages are those damages that go beyond just compensating a Plaintiff for their injuries, but are designed to punish the Defendant for their actions.  Even though punitive damages are designed to punish the Defendant, any punitive damages that are actually awarded, are given to the Plaintiff.

Most people have heard of a case that involved a big award of punitive damages without realizing it, and that is the McDonald’s hot coffee case.  While some media outlets and lobbyists have used the award in that case to decry the legal system and to show that juries will give individuals unreasonable amounts of money, let’s dive in to the actual facts of the case.

79-year-old Stella Liebeck pulled through the McDonald’s drive-thru and ordered a coffee and then pulled in to a parking space in the McDonald’s parking lot.  The coffee spilled in her lap which resulted in second and third-degree burns on her thighs, buttocks, groin and genitals. The burns were severe enough to require skin grafts and resulted in permanent injury to her genitals and groin requiring surgery.

Ms. Liebeck was willing to settle her case against McDonald’s for $20,000.00, which was the cost of her medical expenses related to this incident.  However, McDonald’s refused to settle for that amount.  Then it came out as the case progressed that McDonald’s had received hundreds of complaints from customers of their coffee causing burns.  At the trial, the jury decided that they would award punitive damages and punish McDonald’s for not listening to all of the complaints they had received about their coffee being too hot and it causing injuries.

The jury awarded Ms. Liebeck $2.7 million in punitive damages.  Not because Ms. Liebeck deserved it, but because they wanted to punish McDonald’s.  This amount equaled only two days of total coffee sales revenue for McDonald’s.  That’s how the jury came up with that number.

So the story of the McDonald’s coffee case is not the story of a jury running wild, but more of a jury taking advantage of the ability to award punitive damages to punish a Defendant for their behavior (or non-behavior).

Jedidiah McKeehan is an attorney practicing in Knox County and surrounding counties.  He works in many areas, including criminal, personal injury, landlord-tenant, probate, and estate planning. Visit attorney-knoxville.com for more information about this legal issue and other legal issues.

 

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