Official Publication of the Minnesota State Bar Association

Vol. 61, No. 10 | November 2004
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Frivolous Lawsuits
By David Stowman

In the American lexicon, “frivolous lawsuit” is rapidly becoming the term of choice for any civil dispute that ends up in court. There are claims with merit and those without.  But if you believe the political rhetoric, they are all frivolous.  Personally, I don’t want to see claims without merit filed, and I don’t know anyone who does. 

Based on my informal research, most people know about the topic, but very few really care. When pressed for specifics, people most often recall the case of a woman who spilled coffee and received a multimillion dollar verdict.  At least, that’s the legend.

In reality, that’s only half the story. Stella Liebeck suffered third-degree burns over 6 percent of her body, including her genital and groin area, when she spilled a cup of coffee.  She was hospitalized and her injuries required painful skin grafts and debridement.

Evidence indicates that McDonald’s was well-aware that its coffee caused burns:  Company documents showed more than 700 claims by customers who had been burned by the coffee over a ten-year period.  Some of those burns were substantially similar to Liebeck’s.

McDonald’s policy specifically required that coffee be kept at 180 to 190 degrees Fahrenheit, and the company’s quality assurance manager testified that the company knew a burn hazard existed with any food substance served over 140 degrees.  He admitted that when the coffee was poured it was not fit for consumption because it would burn the mouth and throat. Nevertheless, he said, McDonald’s had no intention of reducing the temperature of its coffee.

Many people focus on the size of the award: $2.86 million including $2.7 million in punitive damages.  The punitive award, which equaled about two days of McDonald’s coffee sales, was subsequently reduced to $480,000 and later settled for an undisclosed amount.  But the misconception remains that millions were paid for a “frivolous claim.”

Are greedy lawyers running rampant in the courts filing nonmeritorious claims?  Many lawyers handle cases on a contingent fee and don’t get paid unless recovery is achieved.  Cases without merit are dismissed; the lawyers will lose time and expenses involved in preparation and may be assessed sanctions.  There is also a financial disincentive: the contingent fee acts to screen out frivolous matters.

Are judges not being effective gatekeepers? Judges don’t want the court’s docket clogged with junk lawsuits.  They monitor cases filed in their courts at every step and they can — and do — dismiss baseless claims.

Does the profession see a major problem here? Normally, the ABA forms a task force on major challenges to the profession, but has not formed one to address frivolous lawsuits, nor do law journals or appellate decisions that address nearly every other legal issue or dispute give the matter much attention. One must question whether it is a significant issue within the profession, because otherwise one of us would have picked up on it.

Perhaps the concern is not about the judicial system, whose currency is ideas, but rather about political campaigns, whose currency is — currency.  Contributors buy advertising to influence elections. More money means greater influence, and the donors want a return on investment.  Their concern is to quantify damages as a risk of doing business and conduct their affairs without fear of destabilizing losses.

The political fix for the generous contributor is a proposal for sweeping statutory modification of the common law, which developed with the wisdom and experience of hundreds of years. Proposed changes focus on methods of reducing economic damages for those who willfully or unintentionally cause harm. Major proposals call for limiting punitive damages and noneconomic damages.

It has been suggested that punitive damages be limited to $250,000, but real world examples illustrate the unfairness of the proposition. The government of Libya sponsored terrorists who blew up an airplane over Lockerbie, Scotland.  Enron executives profited handsomely from the sale of stock of a company that reported a profit every quarter until it filed bankruptcy, while the retirement accounts of employees were frozen and decimated.  Various companies have knowingly sold products that adversely affect the health of millions.  The concept of limiting damages is simple, but imagine trying to convince an electorate that Moammar Khadafi deserves cover or Ken Lay merits protection. 

Similarly, the reason for limiting noneconomic loss is difficult to explain.  Medical bills are economic loss, while pain and suffering are noneconomic.  If one loses one’s eye, the surgeon’s bill is economic, while blindness is noneconomic.  Limiting those damages is extremely attractive to the insurance industry, but punishes those with the greatest loss.  No rational person would give up their sight, limbs, or hearing in return for a set price. Nor will anyone sell their health; but when it is taken from them, there is a forced sale.  Limits are unconstitutional in land condemnation cases because dirt has great value; but if one values health, it is considered sentimental.  The suggested constraints on noneconomic loss are not very complimentary to the value of human life.

The bottom line is that those who take risks with others’ well-being want limited damages and they need cover from politicians. No one wants “frivolous lawsuits” and the campaign against them is a smoke screen that hides the real issue. Limiting damages for Enron executives and other wrongdoers doesn’t sell.  We need to clear away the smoke screen.  If limits are necessary to save the corporate bottom line, a $250,000 cap on executive pay may be a more appropriate solution.

DAVID STOWMAN of Detroit Lakes is president of the MSBA, a certified civil trial specialist, and a top 100 SuperLawyer.  He concentrates his practice in products liability and personal injury law and related litigation.