Crippling Bigness

10.21.13

Supersize Me, Your Honor: Liebeck v. McDonald’s and Our Era of Ambition

It was the case that seemed to inflate every American’s sense of ambition. As a new Retro Report revisits the McDonald’s hot coffee lawsuit, James Poulos looks at the lesson we failed to learn.

Of all the public perceptions of the Tea Party, perhaps the most damaging is the feeling that its leaders are in on the joke. People suspicious of Sen. Ted Cruz (R-TX) and Sarah Palin often detect more than a hint of personal ambition—enough to eclipse the sense of proportion that’s necessary for “responsible” politics and the good stewardship of the rule of law.

The fear of unbridled ambition is nothing new in American politics. Andrew Jackson’s foes raised the alarm that the White House had been taken over by a wannabe Napoleon Bonaparte. But not until the final decades of the 20th century did everyday Americans infect the legal system with the same opportunist lust for aggrandizement they had long complained of in their officeholders.

Yes, with the right lawyers, litigation could move your piece on the national Monopoly board well ahead of millions of others just like you. Fame, fortune, an identity all your own—just sue the right corporation, and all this would be yours.

Partly real, partly imagined, the get-rich-quick lawsuit was perfect fodder for the big media landscape of the ’80s and ’90s. It was only a matter of time before a sensational enough case captured the public consciousness. And on August 18, 1994, less than three months before the swearing-in for the O.J. Simpson murder trial, a jury in New Mexico awarded Stella Liebeck, an elderly woman badly burned by a cup of McDonald’s coffee, $2.86 million.

Today, the lesson of Liebeck is clear. If absolute power corrupts absolutely, we might now understand that bigness works in a similar way.

In the hands of the media, Liebeck’s eye-popping sum became a political football, driving a high-stakes game of tort reform that continues to this day. Grasping ambition, we suddenly wondered, might not be the province of plaintiffs alone. We had a whole new cast of characters to fear, including egomaniacal lawyers, diva-esque judges, and juries thirsty for 15 minutes of power and attention. Perhaps the deep-pocketed corporation was the real victim, some grotesque combination of sitting duck and cash cow?

Today, virtually every ’90s-era attitude about lawsuits seems sadly naïve. To many Americans, every player in what amounts to our national ambition industry is deserving of distrust and disgust—calculating attorneys, crafty politicians, and corrupt corporations alike. Plaintiffs and jurors seem mostly like rubes shoehorned into the show. Who cares what the facts are, when the whole thing plays out the same way regardless?

This kind of cultural moment merits a careful warning: never go full cynic. And as luck would have it, in the latest Retro Report, Taegan Goddard of Political Wire revisits the Liebeck case to remind us why.

In brief, that seemingly cavalier jury didn’t just conjure that huge award out of thin air. After handing Liebeck a rather modest sum to compensate for her medical expenses, the jurors made a simple calculation: McDonald’s cleared about $1.33 million dollars a day in coffee sales. Knocking a couple days of earnings out of that revenue stream would be retaliatory, all right, but hardly crippling, putting the mega-corporation on notice that even a small fraction of sales that ended in painful harm was unacceptable.

Of course, the final twist in the Liebeck case hardly received the obsessive focus reserved for that $2.7 million in punitive damages. As is now de rigueur for corporations facing trial, an out-of-court settlement was reached, with McDonald’s ponying up more than it hoped but less than it feared.

Nevertheless, the damage was done. Instead of being a chance for America to focus on how crazy our ambitions were making us, the Liebeck case helped inflate everyone’s sense of ambition—culminating, we might say, in the John Edwards era, which appears to have outlasted Edwards himself.

Today, the lesson of Liebeck is clear. If absolute power corrupts absolutely, we might now understand that bigness works in a similar way. The power of bigness corrupts by spreading the twisted logic of bigness. McDonald’s insisted that only the 180- to 190-degree temperature range could satisfy its business need for a flavorful coffee that wouldn’t go cold. But the implicit logic of its reasoning was more straightforward still. Very hot coffee scalded. For an operation as huge as McDonald’s, bigness itself dictated those dangerously hot temperatures, which after all only injured a relative few customers who should have been more careful.

The Liebeck jury intuited that the only way to punish this logic of bigness was to partake of it. The reasoning wasn’t just about calculating punitive damages based on the enormous revenues McDonald’s coffee brought in. It was about “making a statement” or “sending a message”: an impossible task without a figurative megaphone big enough to vibrate the Golden Arches and, crucially, to make the evening news. In a world of big corporations, big food, and big media, big damages and big litigation are inevitable.

It’s a vicious cycle that encompasses more of American life with every passing day. The pathological bigness of Obamacare begets gigantic system errors in the program’s online exchanges. The ideology of too big to fail begets behemoth banks even bigger now than they were before the financial crisis. The global war on terror may be officially over, but the government’s quest for total information awareness continues unabated.

Railing against bigness is the easy part, as the Tea Party is now uncomfortably aware. Doing something about it is hard. Liebeck reminds us that even though there’s often more than meets the eye with sensational cases, the real root of our bigness problem isn’t to be found inside the courtroom or inside the Beltway. In today’s age of anxiety and ambition, we’re better off searching our own psychological back rooms.