
How a Lawsuit Over Hot Coffee Helped Erode the 7th Amendment (2014) - ryan_j_naughton
https://priceonomics.com/how-a-lawsuit-over-hot-coffee-helped-erode-the-7th/
======
desdiv
>Nurses, housekeepers, and lab techs crammed into a conference room where
hospital administrators presented a form and told them to sign. Signing meant
agreeing to submit any future employment-related complaints to an arbitrator
hired by the hospital and waiving the right to sue in court. Refusing to sign
meant they'd be fired.

Can you sue for wrongful termination if you get fired for refusing to sign
such a waiver?

~~~
emodendroket
> Can you sue for wrongful termination if you get fired for refusing to sign
> such a waiver?

It seems unlikely, because the Supreme Court has ruled it's permissible for
employers to compel employees to sign arbitration agreements as a condition of
employment.

~~~
spc476
How did the Supreme Court reason that? It seems to be a violation of Amendment
7.

~~~
emodendroket
The case is Circuit City Stores, Inc. v. Adams but it doesn't really turn on
constitutional issues like that from what I can tell. I suppose the reasoning
is you're both equal parties and you can just turn down the employment if you
don't like the provision (this argument is a ridiculous fiction since you need
to work to live but whatever).

I mean honestly I think this is ideologically motivated just like the rash of
decisions that have practically made it impossible to file a class action
lawsuit by letting companies require their customers to use arbitration.

~~~
awssailin
It sucks I agree, but, companies are not obligated to hire people or to not
fire them because people need to eat or else a company could be forced,
legally, to hire far more than they need or can afford. This would drive them
out of business and all their employees would be on the street.

~~~
emodendroket
Whether that's correct or not it's beside the point of what I'm saying. What I
mean to say is that the premise that an employee and and an employer are two
equals entering into an agreement on equal footing is divorced from reality.
That's the reason a minimum wage law and so on is needed in the first place.

~~~
loki49152
why should they be "on equal footing", and what could that possibly mean? They
are two sides of an equation who each want different things out of the
relationship. The employee wants to sell his services. The employer wants to
purchase services.

Unless you subscribe to the Marxist doctrine that every economic interaction
is "really" a question of one party having power over the other, which is
delusional like the rest of Marxism.

~~~
emodendroket
Why don't you go back and read the discussion again?

------
bluejekyll
> Businesses complaining about greedy Americans being overly litigious may
> want to look in a mirror.

This is excellent. In fact, the patent office should require arbitration
agreements which the patent office would oversee for any patent disputes.
Maybe it would be a small step forward over the patent mess that exists now.

~~~
desireco42
That is not a bad idea. Not at all.

------
pfarnsworth
This is a great example of how the modern media is a cancer to the truth. I
wish there was a media source that wasn't incentivized by clicks and ads. I
would pay monthly for a news source that doesn't lie to me.

~~~
matt4077
Great news! You should buy the New York Times. You can even do so monthly!

Their original article on this subject is at
[http://www.nytimes.com/1994/08/19/business/big-jury-award-
fo...](http://www.nytimes.com/1994/08/19/business/big-jury-award-for-coffee-
burn.html).

Note how it doesn't lie to you. It's the "just the facts" approach people
worship.

Arguably, if they had foreseen what that story would become in mainstream
folklore, they would have wanted to add some graphic images etc. But I doubt
anybody knew at the time how interested parties would instrumentalize this
story.

~~~
DrScump
The same New York Times that reported as late as November 16th that Clinton
won 50.4% of the popular vote (with _no qualification_ )?

~~~
matt4077
Wait, isn't that actually true? And doesn't she have plenty of qualifications?
I mean – she's passed the bar exam, right?

~~~
j1vms
I think what buddy means there (the grandparent post) is that the NYTimes
statement/claim in its article had not been qualified by reference (i.e.
attribution), rather than that Clinton herself was unqualified for the job.
That's how I read it.

~~~
matt4077
Yeah, I was joking.

Of course they meant a qualification to remind people that she lost the
election.

(...which I think is quite far 'out there' with regards to examples of lies
spread by the media. But maybe the NYT and I are wrong in assuming that
everybody knows about President-elect by now.)

~~~
comex
...She didn't win 50.4% of the popular vote. She won 48.2% to Trump's 46.3%,
as of the latest count. But I'd like a citation for New York Times reporting
that she did.

~~~
DrScump
The exact quote through at least the 16th, as pointed out on HN at the time:

"Popular vote For Clinton 50.4% ... For Trump 49.6%"

Check the Wayback Machine for this page:

[http://www.nytimes.com/interactive/2016/11/16/us/politics/10...](http://www.nytimes.com/interactive/2016/11/16/us/politics/100000004770186.mobile.html)

Then look at its accurate rewording now.

~~~
comex
I see. The earliest copy of that page on the Wayback Machine includes the
label about only counting Clinton and Trump, but I'll take your word for it
that it was originally missing. It seems like a pretty minor error given that
it was a small part of an article primarily focused on comparing the counties
won by Clinton and Trump, and was apparently promptly corrected, but eh. (And
of course their main election results page has the right numbers.)

------
sjg007
This story has been highly politicized and is proof that even in the 90s
everybody was like tl;dr. It is the perfect example of lies and inneuendo
trumping the facts and reality. And it is a perfect illustration of why we are
in the mess we are in today.

------
pacaro
So next time I buy a car, if I put a line through paragraphs that I don't
agree with in the contract are they going to walk away from the deal? I'm sure
that the dealership doesn't want this to happen, but the sales personnel are
more deal focused than anything else. I'm bloody minded enough to try this
half a dozen times.

~~~
mark212
I tried it twice, asking the manager flat out "what happens if I don't agree
to arbitration?" And he said "Then we can't sell you a car."

------
gkafkg8y8
> Businesses complaining about greedy Americans being overly litigious may
> want to look in a mirror.

Sure, but it goes both ways.

On one hand, companies are overly litigious for reasons described in the post.
I've been frustrated at least once that I couldn't be part of a class action
suit because there wasn't a recall for a design flaw costing me thousands; I
knew however that a class action suit probably would've resulting in a small
check at most.

On the other hand, there are law firms that advertise on television to get
people to claim malpractice, etc. and "get money." And there are patent trolls
that are purely exploiting.

I think it's fair to say there is a lot that could be done for reform.

------
wahern
The article is wrong in one very important detail regarding the Federal
Arbitration Act. The author states,

    
    
      The legal basis for outsourcing legal proceedings is a 1925
      law passed by Congress specifying arbitration as an option
      for “merchants” who agree to a private alternative.
    

Actually, nowhere in the statute is the word merchant or merchants used. That
word is used in the legislative history (i.e. the debates and arguments). But
from the plain text of the statute, a layman reading would have it apply to
all commerce that would otherwise be governed by federal law. You have to rely
on some presently out of favor legal interpretative devices to believe that
the law should only apply between merchants.

The _real_ issues are,

1) What kinds of commerce are reachable? This bill passed in a time when the
Federal Courts held a substantially narrower interpretation of Congress'
powers over commerce. And even proponents of modern, so-called plain text
interpretation usually admit that in some circumstances, especially involving
constitutional issues of powers, you want to see a more clear articulation of
an intent to extend power so broadly.

2) SCOTUS upended over half a century of settled precedent. First when it held
that the FAA was enforceable in state courts applying state law, and again
when it decided that state law defenses to enforceability (i.e. state-specific
definitions of unconscionability) could not be used.

3) Deciding that state law defenses are not useable is ironic give the plain
text limitation that arbitration agreements are enforceable "save upon any
grounds that exist at law or in equity for the revocation of any contract".
There's a sound argument that this exclusion doesn't capture state-based
grounds. But that argument necessarily depends on the historical legal context
--at the time the law couldn't have reached nearly as much commerce as SCOTUS
allows today. And it wasn't until 1938 until Erie Railroad v. Tompkins exalted
state law in choice of law matters.

These details matter because if you try to debate the Federal Arbitration Act
with knowledgeable defenders you lose all credibility by repeating falsehoods
like the author did. We really need change in this regard: 1) stop so-called
tort reform, and 2) fix SCOTUS' error in applying the FAA so broadly. It helps
if people stick to facts.

Many conservatives love the FAA; and many conservatives love so-called tort
reform. But the inevitable outcome of both these things will be centralization
of consumer protection in federal government agencies. A modern democracy
simply won't stand-by while corporations cheat and injure people. The question
is, which system do you want:

1) One that is decentralized, relatively equitable (1000 years of careful
balancing of interests between plaintiff and defendant), and with more freedom
for states to experiment, or

2) One that is centralized in a few government regulatory bodies, where the
little guy will almost always get screwed, and businesses are subject to the
whims of each passing administration on major issues, turning every major
business dispute into a political issue.

The latter is what you get when you take away the ability for people to seek
out individualized justice in the courts. And the outcome will not (and is
not) good for anybody.

~~~
pessimizer
> A modern democracy simply won't stand-by while corporations cheat and injure
> people.

This is essentially a religious belief.

~~~
wahern
No, it just follows from the definition of democracy. If McDonalds starts
shooting every fifth customer in the head, no matter how deeply in the pockets
the police and legislators are, in a functional democracy representatives will
be responsive to the electorate to some substantial degree.

But note that what change the electorate gets might not be very effective. It
might be just barely adequate, or it might just obscure the problem. And
that's my point: conservatives are taking away the tools to seek out justice.
Liberals are replacing some of those tools, but the newer tools suck. They'll
not only be less effective in protecting consumers, but they're likely to be
even more stifling to business. Everybody will be worse off.

Regulatory agencies are worse for business because unlike courts, regulatory
agencies can _prevent_ businesses from innovating on the pretense of consumer
protection. While as a general matter courts can only respond to manifest
harm.

Because regulatory agencies don't and cannot provide individualized justice,
when they work well to protect consumers they do so by being overly
protective. Usually it's beneficial to society to let businesses take more
risk as long as they can compensate those people who are harmed. I'm not
saying regulatory agencies are always a bad idea, just that vesting the power
in consumers to sue on their own behalf, and relying on them to do so, is a
much more powerful mechanism for correcting bad behavior than people think.
It's administratively inefficient in many respects, but at least it's
uncoupled from politics and more directly tied to manifest harms. I think in
real economic terms it's less costly for society.

~~~
emodendroket
The problem with this line of thinking is that McDonald's has a team of people
to lobby tirelessly on their behalf and individual voters don't really know or
care about these issues until they're affected personally. So by one small
change after another the court system can become less and less favorable to
individuals by very small steps. The idea that regulation is becoming more
stringent is simply not borne out by reality.

------
Rapzid
It's pretty amazing that her initial week in the hospital only racked up 10k
in bills. I had a hernia repair recently and it was ~7k for a few hours in-
and-out. Wouldn't want to see the bill for spending a week in the hospital
these days.

------
bluesign
Is there any statistics about the performance of jury trial?

I am from Europe and to be honest I don't have much experience with US legal
system. But what I watch from news and stuff, it is a utility to force people,
out of court settlements or guilty pleas. What I see is going on a jury trial
is a probabilistic decision. You would most likely settle out of court for
your Expected Value at jury trial.

I strongly feel this should not be what justice should be.

------
aichi
Point of view from Europe: doesn't matter that Coffee sue wasn't about
millions just thousands, the main issue is that she won. That is what we laugh
about. You can act as brainless and won money. If you order hot coffee you can
pay your own bill when you spill it on you. So thanks to her and only her
Gourleys got limited money.

~~~
icebraining
As an European myself, I fully disagree; getting a cup of coffee at 82ºC is
not reasonable, and spilling it on yourself should never cause 2nd degree
burns. The payout was completely justified. And the fact that it was standard
policy and not an error further solidifies the point.

------
harry8
Still seems totally ridiculous that it would go to court. 180F is 82C. If
you're stupid enough to burn yourself with it (and _I_ am) blaming someone
else for your stupidity and suing is not moronic, it's amoral. The problem of
medical bills is one to take up with your elected representatives rather than
blaming coffee for being coffee ffs.

~~~
nickpsecurity
I'm upvoting you since this is a common mistake. We think people should use
common sense when dealing with hot coffee. I've spilled coffee I made on
myself plenty of times. It burned and made my skin a bit red. That's all.
Since that's what hot coffee usually does.

Then, to cut costs, McDonalds raised the temperature of their coffee without
telling people what it could do. I personally lost the ability to taste
anything after taking one sip. Came back after a day or two but no coffee has
ever done that. Then, this woman gets _third degree burns_ from something she
expects to hurt and make her skin red at worst.

That's nothing even a smart person or coffee junkie should expect to happen.
It's unusual. That's because it was a dangerous thing McDonalds did to squeeze
more money out of their operation. The danger damaged people who couldn't see
it coming. They should pay for it.

~~~
steveeq1
> Then, to cut costs, McDonalds raised the temperature of their coffee without
> telling people what it could do.

How does raising the temperature of coffee cut costs?

~~~
nickpsecurity
It was a combination of things in the legal text I read a while back. For one,
they were having to brew coffee more often to keep it at the desired, sane
temperature. Two, the coffee quickly turned to a mild temperature on the road
for some customers that drove a lot. They dramatically increased the
temperature to reduce number of pots brewed & attract that one demographic
more. They also didn't tell anyone the new temperature could cause 3rd degree
burns.

Profit went up with most people taking damage thinking they couldn't win
against legal team of a giant. They just put in complaints instead of
lawsuits. The suit that won got watered down a lot on appeal. The marketing
team combined with the media, which makes a fortune on McDonalds ads, turned
her into a laughing stock. McDonalds added a warning or something afterward
but the cost-benefit analysis was good enough to justify all of it.

