Adults enjoy very hot beverages, close to 95°C (over 200°F), but we know how to sip them very slowly with lots of cooling air, and even we occasionally burn our tongues. When we spill such beverages on our skin, we know to wave the affected area around to cool it rapidly, or run it under cold water ASAP. Children and senior citizens have more sensitive and thinner skin, and just one second of hot coffee on a child's arm can cause a full-penetration third-degree burn. Lots of organizations warn about the dangers of hot liquid around children.
In the famous McDonald's case, a 79-year-old woman was served 180°F to 190°F coffee (82°C to 89°C) in a thin cup in a drive-thru. She put the cup between her legs to stabilize it -- trying to be careful -- and removed the lid to add cream and sugar. The coffee sloshed out upon removing the lid, quickly giving her third-degree burns across her groin, inner thighs, and buttocks. She spent eight days in a hospital, had to go through skin grafts, and was disabled for more than two years -- all for a 49-cent cup of coffee in a flimsy cup that McDonald's served way, way too hot for a drive-in window.
And the company knew, too. The company had received "at least 700" scalding coffee reports in the previous ten years, some involving children ("Go get Daddy a refill" shouldn't be a dangerous statement). It settled some of these claims for up to $500,000. In this case, the woman's medical bills totalled over $11,000. McDonald's offered her $800 to go away. A court-appointed mediator recommended that McDonald's settle for $225,000, but the company refused, went to trial -- and was hit with $200,000 in compensatory damages (reduced to $160,000 as the jury attributed 20% of the fault to the woman for having the coffee in her lap), and $2.7 million in punitive damages, based on the fact that at that time, McDonald's earned $1.35 million per day in coffee revenues. The damage award was two days' worth of McDonald's corporate coffee income. Even that was later reduced to $480,000, but before the appeals could be decided, the woman and McDonald's settled privately with undisclosed and confidential terms.
$480,000 is the money McDonald's takes in for coffee sales in 8.5 hours, and that was eight years ago.
Now comes the fun part: not jumping to conclusions. Insisting that all coffee be served no hotter than 120°F (50°C) is just as much a kid-proofing of the world as insisting that all Internet content be censored unless its suitable for 12-year-olds. However, given a ten-year history of complaints about physical injuries from coffee burns, what should McDonald's have done? Served the coffee in more spill-proof cups? Provided better containers for adding cream and sugar without the risk of a spill in a car? Lowered the temperature some?
Each of these actions would have cost McDonald's money and reduced profit, but they would have spared people from physical injury, including the horribly debilitating one experienced by the woman in this case. This woman took a cup of coffee given from a drive-thru (allegedly designed for car drinking), added the cream and sugar from the provided receptacles (as designed), and wound up with burns that required skin grafts -- and McDonald's corporate offices knew the designs were injuring people combined with the temperature of the coffee.
Punitive damages are designed to change a company's behavior, to make it start behaving more responsibly instead of hurting people in the name of profit. They're punishment -- hence the name "punitive." Juries that find irresponsibility undeserving of punishment can compensate victims without awarding punitive damages. Within days of this verdict, the corporate spinmeisters that want no oversight of any business action had made this into a joke about a woman too dumb to drink coffee. The jury, who heard the facts, found that the woman was doing exactly what she was supposed to do with the coffee and suffered for two years because of it -- and that McDonald's could have prevented it because the company knew these injuries were happening. It was just cheaper to pay off the people who actually sued than stop the injuries.
Those are the kinds of issues juries are supposed to decide.