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Puntive Damage and Struct Liability

Discussion Question One

A few years ago a New Mexico jury awarded Stella Liebeck $2.7 million in punitive damages after she received third degree burns from a cup of McDonald's coffee she spilled in her lap. Do you think it is appropriate to punish corporate wrongdoing by awarding punitive damages in a private lawsuit? Was the award appropriate in this case?

Discussion Question Two

In light of the legal policy discussed above, should the manufacturer be held strictly liable despite all the warnings if the hostess were injured? Having used the product despite the warnings, should the hostess be considered negligent? Should manufacturers be allowed to make and sell products they know are "POISONOUS" and "FLAMMABLE," in other words very, very dangerous?

Discussion Question Three

The last time I was in Nogales I was offered a $10 "Rolex" watch. Was the seller violating the Lanham Trademark Act? Is there any possibility a consumer paying $10 for a "Rolex" could be confused about the authenticity of his purchase? If not, why should the makers of genuine Rolex watches be upset?

Solution Preview

Please see response attached., also provided below. Good luck with your continued studies and take care.

RESPONSE:

Discussion Question One

A few years ago a New Mexico jury awarded Stella Liebeck $2.7 million in punitive damages after she received third degree burns from a cup of McDonald's coffee she spilled in her lap. Do you think it is appropriate to punish corporate wrongdoing by awarding punitive damages in a private lawsuit? Was the award appropriate in this case?

Response:

By law, the corporations should be held accountable for crimes and held accountable for wrongdoings and not be able to hide behind the corporate entity. However, in this case, the woman spilled her own coffee, but it must have been argued that McDonald's coffee was TOO hot, and therefore considered to be negligent in this sense and, thus, the fault of the corporation (e.g., third degree burns). The award seems to be high, though, since she spilled the coffee on her own lap, and in this sense was negligent as well.

However, in most product liability laws, the consumer may also seek punitive damages, as in our above example. However, depending on whether the victim's injuries were caused by negligence or by willful misconduct of the manufacturer or service provider, punitive damages may total one to three times the amount of actual damages. It seems that $2.7 million might be higher than the usual allotment in the average case. There could be other mitigating circumstances for the large award, however (http://library.findlaw.com/1999/Aug/1/129312.html).

See http://www.law.cornell.edu/topics/products_liability.html

The Consumer Protection Law also provides for a comprehensive network of private and government consumer protection groups. A consumer who is injured by a dangerous product (i.e, hot coffee) may directly contact the responsible party. The consumer can expect his or her complaint to be handled within 15 days. If a timely response is not given, the consumer may file a complaint with a government consumer protection official. If the consumer fails to get a satisfactory response from the official, he or she can petition for mediation before a consumer dispute mediation commission. If mediation is unsuccessful, the consumer may initiate a lawsuit in a district court. Private consumer protection organizations may also take action on behalf of injured consumers. For example, in cases involving more than 20 victims, a consumer protection group may bring a class action type lawsuit in its own name on behalf of the victims. To qualify as a consumer protection group and to be permitted to file such lawsuits, an organization must meet certain conditions and have the endorsement of government officials. http://library.findlaw.com/1999/Aug/1/129312.html

Discussion Question Two

In light of the legal policy discussed above, should the manufacturer be held strictly liable despite all the warnings if the hostess were injured? (What legal policy? Strict liability means that the product must be defective, so the manufacturer ...

Solution Summary

This solution discussion the three legal questions posed e.g. punitive damages, liability issues, and the likes.

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