KEY LEGAL CASES IN TORT LAW: LIEBECK, HOLMES,
PALSGRAF, BYRNE & HERTZ LATEST UPDATE
2025/2026 WITH 100% ACCURATE QUESTIONS
AND ANSWERS
Court-CORRECT ANSWERSNew Mexico District Court, Bernalillo County (a state trial court of general
jurisdiction).
Plaintiff-CORRECT ANSWERSStella Liebeck, 79-year-old woman injured by spilled McDonald's coffee.
Defendant-CORRECT ANSWERSMcDonald's Restaurants (the local franchise and the McDonald's
Corporation).
Procedural History-CORRECT ANSWERS1992: Liebeck offered to settle for $20,000 → McDonald's
refused. 1994: Tried in New Mexico District Court. Jury awarded $200,000 compensatory (reduced to
$160,000 because Liebeck was found 20% at fault). Jury also awarded $2.7 million punitive damages →
trial judge reduced to $480,000. McDonald's appealed. * Case settled confidentially (reportedly under
$600,000) before appellate ruling.
Facts-CORRECT ANSWERSLiebeck spilled a cup of McDonald's coffee on her lap while in a parked car.
Coffee was served at 180-190°F, capable of causing third-degree burns within seconds. Liebeck suffered
third-degree burns on her thighs, groin, and buttocks, requiring skin grafts and extended medical care. *
Evidence showed McDonald's had over 700 prior reports of burns from hot coffee but continued the
practice.
Issue(s)-CORRECT ANSWERSWas McDonald's negligent in serving coffee at a dangerously high
temperature? * Should McDonald's be held liable for Liebeck's injuries and medical costs?
Decision-CORRECT ANSWERSJury found for Liebeck. McDonald's was found liable. Damages awarded as
above (compensatory + punitive).
Reasoning-CORRECT ANSWERSMcDonald's knew its coffee was unreasonably hot and had notice of
hundreds of prior injuries. Coffee at 180-190°F posed an unreasonable risk of harm to consumers.
, Liebeck was partly at fault (20%) for spilling the coffee, but McDonald's bore the greater responsibility. *
Punitive damages were meant to punish McDonald's and deter similar conduct.
Significance of Case-CORRECT ANSWERSCommonly cited (often misunderstood) as a symbol of frivolous
lawsuits, though it actually showed corporate negligence and consumer protection issues. Sparked
debate on tort reform in the U.S. Highlighted the role of punitive damages in deterring unsafe corporate
practices.
Ethical Implications-CORRECT ANSWERSCorporate responsibility vs. profit motives. Consumer safety vs.
business practices. Fair compensation for injury vs. public perception of lawsuits.
Primary Value of Court-CORRECT ANSWERSAccountability → holding corporations responsible for
known risks. Deterrence → encouraging safer business practices. Fairness/Justice → ensuring injured
parties receive compensation.
Court (Theranos Case)-CORRECT ANSWERSU.S. District Court for the Northern District of California
(federal trial court).
Plaintiff (Theranos Case)-CORRECT ANSWERSUnited States of America (federal prosecutors on behalf of
the government).
Defendant (Theranos Case)-CORRECT ANSWERSElizabeth Holmes, founder and former CEO of Theranos,
Inc.
Procedural History (Theranos Case)-CORRECT ANSWERS2018: Holmes and former COO Ramesh "Sunny"
Balwani indicted on federal wire fraud and conspiracy charges. 2021-2022: Holmes's trial held in U.S.
District Court (San Jose). January 2022: Jury found Holmes guilty on 4 counts (3 counts wire fraud, 1
count conspiracy to commit wire fraud) and not guilty on others. * November 2022: Holmes sentenced
to 11 years, 3 months in federal prison plus supervised release.
Elizabeth Holmes-CORRECT ANSWERSFounder of Theranos who claimed to have technology that could
run hundreds of medical tests on a single drop of blood.
PALSGRAF, BYRNE & HERTZ LATEST UPDATE
2025/2026 WITH 100% ACCURATE QUESTIONS
AND ANSWERS
Court-CORRECT ANSWERSNew Mexico District Court, Bernalillo County (a state trial court of general
jurisdiction).
Plaintiff-CORRECT ANSWERSStella Liebeck, 79-year-old woman injured by spilled McDonald's coffee.
Defendant-CORRECT ANSWERSMcDonald's Restaurants (the local franchise and the McDonald's
Corporation).
Procedural History-CORRECT ANSWERS1992: Liebeck offered to settle for $20,000 → McDonald's
refused. 1994: Tried in New Mexico District Court. Jury awarded $200,000 compensatory (reduced to
$160,000 because Liebeck was found 20% at fault). Jury also awarded $2.7 million punitive damages →
trial judge reduced to $480,000. McDonald's appealed. * Case settled confidentially (reportedly under
$600,000) before appellate ruling.
Facts-CORRECT ANSWERSLiebeck spilled a cup of McDonald's coffee on her lap while in a parked car.
Coffee was served at 180-190°F, capable of causing third-degree burns within seconds. Liebeck suffered
third-degree burns on her thighs, groin, and buttocks, requiring skin grafts and extended medical care. *
Evidence showed McDonald's had over 700 prior reports of burns from hot coffee but continued the
practice.
Issue(s)-CORRECT ANSWERSWas McDonald's negligent in serving coffee at a dangerously high
temperature? * Should McDonald's be held liable for Liebeck's injuries and medical costs?
Decision-CORRECT ANSWERSJury found for Liebeck. McDonald's was found liable. Damages awarded as
above (compensatory + punitive).
Reasoning-CORRECT ANSWERSMcDonald's knew its coffee was unreasonably hot and had notice of
hundreds of prior injuries. Coffee at 180-190°F posed an unreasonable risk of harm to consumers.
, Liebeck was partly at fault (20%) for spilling the coffee, but McDonald's bore the greater responsibility. *
Punitive damages were meant to punish McDonald's and deter similar conduct.
Significance of Case-CORRECT ANSWERSCommonly cited (often misunderstood) as a symbol of frivolous
lawsuits, though it actually showed corporate negligence and consumer protection issues. Sparked
debate on tort reform in the U.S. Highlighted the role of punitive damages in deterring unsafe corporate
practices.
Ethical Implications-CORRECT ANSWERSCorporate responsibility vs. profit motives. Consumer safety vs.
business practices. Fair compensation for injury vs. public perception of lawsuits.
Primary Value of Court-CORRECT ANSWERSAccountability → holding corporations responsible for
known risks. Deterrence → encouraging safer business practices. Fairness/Justice → ensuring injured
parties receive compensation.
Court (Theranos Case)-CORRECT ANSWERSU.S. District Court for the Northern District of California
(federal trial court).
Plaintiff (Theranos Case)-CORRECT ANSWERSUnited States of America (federal prosecutors on behalf of
the government).
Defendant (Theranos Case)-CORRECT ANSWERSElizabeth Holmes, founder and former CEO of Theranos,
Inc.
Procedural History (Theranos Case)-CORRECT ANSWERS2018: Holmes and former COO Ramesh "Sunny"
Balwani indicted on federal wire fraud and conspiracy charges. 2021-2022: Holmes's trial held in U.S.
District Court (San Jose). January 2022: Jury found Holmes guilty on 4 counts (3 counts wire fraud, 1
count conspiracy to commit wire fraud) and not guilty on others. * November 2022: Holmes sentenced
to 11 years, 3 months in federal prison plus supervised release.
Elizabeth Holmes-CORRECT ANSWERSFounder of Theranos who claimed to have technology that could
run hundreds of medical tests on a single drop of blood.
