LIQUOR LIABILITY OF SOCIAL HOSTS*

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1 Advancing the meetings, conventions and expositions industry Attorneys and Counselors at Law 1620 I (Eye) Street, NW 6 th Floor Washington, DC Pennsylvania Avenue, NW, Washington, DC Fax: / Fax LIQUOR LIABILITY OF SOCIAL HOSTS* By Jeffrey W. King, Esq. Crowell & Moring CIC General Counsel *Copyright by J.W. King,

2 LIQUOR LIABILITY OF SOCIAL HOSTS* By Jeffery W. King, Esq. There is an increasing concern about the effects of alcoholic beverages and intoxication on our society. Initially, a tavern or a bar that served alcohol to a drunk driver had been held liable for the accident that the intoxicated patron caused. The current trend is to extend liability beyond commercial vendors of liquor to encompass social hosts. In the past few years, state courts have extended liability to social hosts that knowingly furnish intoxicated persons alcoholic beverages at weddings, picnics, office parties, housewarmings, fraternity parties, and even social cocktail parties. Alcohol has long been a part of social and business functions. As a result of the extending liability to a social host, the sponsor of an event where alcohol is served ca no loner ignore a guest who becomes intoxicated. Rather, care must be taken to prevent a guest from becoming drunk and injuring himself or others. I. LIQOUR LIABILITY IS IMPOSED BY DRAM SHOP STATUES. A. Dram Shop Statues. Liquor liability statues, commonly called dram shop statutes, have been in existence sine the 1800 s. Forty states and the District of Columbia have dram shop statutes that impose liability on licensed alcohol sellers for injuries caused by an intoxicated customer. Liability is based on the selling of alcohol to a person who is obviously intoxicated or under the legal drinking age. The early dram shop statutes applied only to tavern owners and made it unlawful for them to serve alcohol to minors or intoxicated persons. They imposed liability on tavern owners who served alcohol to minors or intoxicated persons for the injuries resulting therefrom. B. Statutes in your state It is important that you know the statutory law if the state in which liquor is served. 1. Most dram shop statutes require knowledge or reason to know on the part of the alcohol seller that the alcohol consumer is intoxicated or under the legal drinking age. 2. Some statutes, however, provide strict liability that is, liability regardless of whether or not the patron was known to be intoxicated. 3. Certain statutes also restrict liability only to commercial establishments. Some courts, as a result, have interpreted the statutes as prohibiting imposition of liability on social hosts. Langle v. Kurkul, No (Vt. Sup. Ct. March 21, 1986). 2

3 C. Liability to the Intoxicated Patron. A number of courts have held that not only is an establishment liable for the injuries suffered by innocent third parties, but they may also be liable for the injuries suffered by the intoxicated patron. In fact, liability to the intoxicated person himself is a trend in liquor liability law. 1. In Massachusetts, a court found a restaurant liable to an intoxicated patron for injuries he suffered while intoxicated. The court found the applicable law prohibiting the sale of alcohol to an intoxicated person to be a safeguard for the general public and the intoxicated person himself. O Hanley v. Ninety-Nine, Inc., 421 N.E.2d 1217 (1981) 2. Similarly, a Pennsylvania court found an alcohol seller liable to an intoxicated customer for injuries he suffered. The statute in Pennsylvania made it unlawful for a liquor licensee to sell alcohol to an intoxicated person. Baker v. Sunken Cork, 512 A.2d 71 (1986). D. Absence of Dram Shop Statute 1. Liability without a Statute. A number of courts found that there need not be a specific dram shop statue to impose liability on commercial vendors of alcoholic beverages. The courts have recognized the clear trend nationally in favor of recognizing liability as a basis for extending liability. Walker v. Griffith, 626 F. Supp. 350 (1986); Brigance v. The Velvet Dove Restaurant, 725 P.2d. 300(1986); Poole v. El Chico Corporation, 713 S.W.2d 955 (19186). 2. No Liability without a Statute. Other courts have found, however, that there is no common law rule for liability of sellers of alcohol. As a result, the courts have held that liability will be imposed only if the state legislators enact a dram shop statute. Webb v. Reguna Limited Partnership, 624 F. supp. 471 (E.D. Va. 1985). II. LIABILITY OF SOCIAL HOST A. Expanding Liability. 1. The courts in a number of states have interpreted dram statutes to extend liability not only to commercial vendors but also to social hosts. Generally, the statutes are broadly written so as to cover dispensing, selling, or giving to any intoxicated person any alcoholic beverage. Clark v. Minicks, 365 N.W.2d 226 (Iowa 1985). 2. The courts in other states have held that social hosts 3

4 could be liable for the injuries inflicted as a result of its intoxicated guests because it was negligent in serving the intoxicated patron. Kelly v. Swinell, 96 N. L. 538, 479 A.2d 1219 (1986); Otis Engineering Corp. v. Clark, 668 S. W.2d 307 (Tex. Sup. Ct. 1986). B. Standard Liability. The courts have generally held a host liable only when it had an opportunity to prevent the person from becoming intoxicated or from driving but failed to do so. As a result, most courts will not hold a social host liable unless it has failed to take any precautions to prevent their guests from becoming intoxicated or from engaging in dangerous activities (e.g., driving, swimming, etc.) 1. The New Jersey Supreme Court ruled that a host who serves liquor at a party, knowing that a guest is becoming intoxicated and will be operating a motor vehicle, is liable for injuries inflicted on a third party as a result of the negligent operation of the vehicle by the guest. Kelly v. Swinell, 96 N. L. 538, 476 A.2d 1219 (1984). 2. Similarly, the Texas Supreme Court ruled that a company, who sent an employee home because he was drunk, was liable for an accident caused by the intoxicated employee. The court found that the company had told the intoxicated employee to go home and actually has him escorted to his car. Otis Engineering Corp. v. Clark, 668 S.W.2d 307 (Tex. Sup. Ct. 1964). 3. An Indiana court, in what a may be the first case of its kind, imposed civil liability on an ordinary bar patron, who, with misplaced hospitality, had gratuitously furnished free liquor to an intoxicated friend who then drove while drunk and injured an innocent victim. Ashlock v. Norris, 475 N. E.2d 1167 (1985). C. Liability to the Intoxicated Guest The liability of social hosts has usually been restricted to third parties who have been injured as a result of the intoxicated guest s negligence. Recently, however, at least one court has extended the liability of an association that served liquor to include the intoxicated guest. The South Dakota Supreme Court held an American Legion post liable for over serving a member who became intoxicated, passed out and died of carbon monoxide poisoning. Employees of the post served the decedent alcoholic beverages throughout the course of an evening and into the early morning hours. As a result, the patron became extremely inebriated. Although the bartenders were fully aware of his condition, they continued to serve him alcohol in violation of the state s liquor control act which state that: No licensee shall sell any alcoholic beverage, except low-point beer (1) to any person under the age of twenty-one years; (2) to any person who is intoxicated at the time, or who is known to the seller to 4

5 be a habitual drunkard. The decedent drove himself home, parked his car in the garage, and closed the garage door by remote control. He remained in the car and died of carbon monoxide poisoning. Selchert v. Lien, 371 N.W.2d 791 (S.D. 1985). 2. The courts have extended liability to social hosts who serve liquor to minors even where the courts have previously held that social hosts are not generally liable for serving liquor to adults. Fasset v. Delta Kappa Epsilon, Nos , 1653; (3d Cir. Dec. 5, 1986). III. PRECAUTIONS TO PROTECT YOURSELF AGAINST LIQUOR LIABILITY. A. Instruct and Train your Staff. Staff guidance on how to recognize and deal with minors and intoxicated persons is essential to alcohol servers. Such training provides proof of adherence to responsible serving practices, a defense provided in some modern liquor liability statutes. B. Verify Age of Guests. An aggressive program of verification of age of consumers can preclude liability. Some statues provide absolute immunity of good faith efforts were made to verify the age of the consumer. C. Adequate Staffing and Lighting. Adequate lighting will assist the staff in recognizing age or intoxicated state of patrons. Such measures also provide evidence of responsible serving practices. D. Use Properly Trained Bartenders. There are training courses for bartenders to help them identify intoxicated patrons and to deal diplomatically with this problem. The caterer should be required to provide only bartenders so trained. E. Instructions to Bartenders Bartenders should be instructed not to serve intoxicated persons and can be told to weaken drinks of customers who have ordered several drinks. This is particularly important for caterers who are generally paid by the number of bottles sold. F. Restrict Drinking at Certain Activities. Provision of certain activities, such as swimming pools or boat outings, in conjunction with drinking can increase the danger of the activity provided and 5

6 provide a basis for liability of the provider. Special caution needs to be applied here. G. Avoid Self-Service Bars. The lack of any control or ability to monitor consumption increases the chance of liability. H. Serve Food and Have Non-Alcoholic Beverages Available. The availability of food and non-alcoholic beverages may reduce consumption. I. Arrange for Transportation. Arrangements should be made to provide transportation for intoxicated guests. An intoxicated guest at a hotel should be escorted to his room. J. Limit Length of Reception By limiting the length of the reception, the chances of a guest becoming intoxicated are reduced. Also, do not announce a last call. K. Liquor Liability Insurance Such insurance is readily available and relatively inexpensive. The coverage should be obtained by all associations that have social events when liquor is supplied. While these measures may not prevent lawsuits, they can provide defenses to liability. IV. CONCLUSION The courts have been expansive in their interpretation of statutory and common law liability and litigation concerning liquor liability is growing rapidly. To date, most courts have imposed liability only where the sponsor of a function has failed to take reasonable precautions to ensure that guests do not become intoxicated or drive while intoxicated. As a result, social hosts are well advised to take measures to protect themselves against liquor liability. 6

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