On February 27, 1992, Stella Liebeck, a 79-year-old woman from Albuquerque, New Mexico, ordered a 49-cent cup of coffee from the drive-through window of a local McDonald's restaurant. Liebeck was in the passenger's seat of her Ford Probe, and her nephew Chris parked the car so that Liebeck could add cream and sugar to her coffee. Liebeck placed the coffee cup between her knees and pulled the far side of the lid toward her to remove it. In the process, she spilled the entire cup of coffee on her lap. Liebeck was wearing cotton sweatpants; they absorbed the coffee and held it against her skin, scalding her thighs, buttocks, and groin. Liebeck was taken to the hospital, where it was determined that she had suffered third-degree burns on six percent of her skin and lesser burns over sixteen percent. She remained in the hospital for eight days while she underwent skin grafting. During this period, Liebeck lost 20 pounds (9 kg, nearly 20% of her body weight), reducing her down to 83 pounds (38 kg). Two years of medical treatment followed.
Liebeck sought to settle with McDonald's for $20,000 to cover her actual and anticipated expenses. Her past medical expenses were $10,500; her anticipated future medical expenses were approximately $2,500; and her loss of income was approximately $5,000 for a total of approximately $18,000. Instead, the company offered only $800. When McDonald's refused to raise its offer, Liebeck retained Texas attorney Reed Morgan. Morgan filed suit in New Mexico District Court accusing McDonald's of "gross negligence" for selling coffee that was "unreasonably dangerous" and "defectively manufactured". McDonald's refused Morgan's offer to settle for $90,000. Morgan offered to settle for $300,000, and a mediator suggested $225,000 just before trial, but McDonald's refused these final pre-trial attempts to settle.