reducing liability from dram shop laws and dui update american beverage licensees 10 th annual...
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Reducing Liability FromDram Shop Laws and DUI Update
American Beverage Licensees10th Annual Convention
June 12, 2012
Common Law
At common law, establishments were not liable for selling or providing alcoholic beverages to individuals who became intoxicated and injured themselves or others
Courts recognized that the problem wasn’t the drink, but the drinker
Dram Shop Laws
Dram Shop Laws
Impose liability on commercial establishments that provide alcoholic beverages to certain adults or underage customers for on-premise consumption
In some jurisdictions, may also apply to retailors under certain circumstances
DS Laws: Service to Adults
35 states and DC hold licensees accountable for serving a visibly intoxicated person or knowingly serving a habitual drunkard
Other states are likely to join them
DS Laws: Service to Adults
The burden of proof varies Some states require plaintiffs to prove
proximate cause by clear and convincing evidence
Some states provide for special defenses Engaging in responsible business
practices
DS Laws: Service to “Minors”
42 states and DC hold licensees accountable for serving “minors”
Most states use 21 as a cutoff; remember, it is illegal to serve those under 21 under Federal law A small minority of states limit liability to
patrons under 19 or 18
DS Laws: Service to “Minors”
Some states hold vendors responsible for “serving” a minor if they sell alcohol to a person who provides alcohol to a minor if they knew or should have known the person would do so
DS Laws in the Real World
Researchers from Washington State University examined 167 cases tried to verdict between 1992 and 1998 where licensees were sued for improper service
Most involved car crashes Verdicts routinely exceeded $100,000 and
many were well above $1,000,000
Additional Risks
Additional Risks
Proprietors may have a duty to safeguard customers from “extreme danger” while on the premises
Some states may recognize a cause of action for negligence per se when hosts violate criminal statutes
Additional Risks: Improper Supervision
Do licensees have an obligation to monitor patrons? Bauer v. Nesbitt (NJ Ct App 2008)
Held that an establishment had a duty to ensure that a visibly intoxicated patron was driven home by a sober companion and/or to protect the person from hurting himself or others!
Reversed by NJ Supreme Court
Additional Risks: Improper Eviction
Licensees typically evict patrons who are underage, become belligerent or endanger others
Is there risk? Not in most jurisdictions Exceptions:
Facilitation of tortious conduct Outrageous conduct
Additional Risks: “Improper” Refusal
Improper refusal of service Example: What happens when a server
refuses to serve a patron who has a speech impediment because the server thinks he or she is drunk?
Licensees can minimize the risk by training staff to ask questions about prior drinking and watching for changes in behavior
Insurance and Indemnification
Because you can’t prevent someone from suing you
In December 2011, a Texas woman sued a bar when she was raped by a pair of police officers after leaving a local club She claimed that employees served her until
she became drunk Continued to sell to her after she became
drunk Allowed her to leave when she was obviously
intoxicated and posed a clear danger to herself and others
Insurance and Indemnification
General liability policies Generally exclude coverage for negligent service Generally apply to on-premises harms only
Liquor liability policies should be sought that cover Assaults and batteries Suits brought be third parties injured off-premises
by a patron served at the establishment All types of damages (ie. mental) Employee drinking Defense costs
Insurance and Indemnification
Some states provide licensees and hosts with a right of indemnification In the real world, this often is of little value
Hotels and other venues that allow patrons to host parties should consider requiring the hosts to obtain insurance and indemnify them if someone is hurt
Reducing Risk
Reducing Risk
Develop relationships with state and local regulators Obtain state certification as a responsible vendor
where available Draft written policies and follow them Provide training to staff by certified trainers from
third party vendors Audit/monitor staff Prohibit employees from drinking on duty Require anyone who appears to be under 30 to
produce identification
Reducing Risk
Maintain appropriate staffing Publicize responsible business practices Remove customers in appropriate cases Avoid engaging in behaviors that encourage
overconsumption or overservice Encourage designated drivers Document and track incidents Obtain and maintain insurance Refuse service to habitual drunkards or visibly
intoxicated patrons
What’s happening nationally?
Attacks on the Industry
Responsibility Is the problem the product or the drinker?
Some advocates suggest that “You caused the problem”
The truth is that the vast majority of Americans use alcohol responsibly and that the industry is part of the solution
DUI Update: Industry Contributions
Several national organizations are working hard to reduce drunk driving and underage drinking Supporting change
STOP Act Legislation addressing hardcore drunk drivers
(Federal and state) Resources for judges, prosecutors and probation
officers Funding for national non-profits organizations
and working groups (Beam Global, Anheuser-Busch and others)
DUI Update: Industry Contributions
Providing resources ABL toolkits TCC guides Funding conferences Funding publications
Underage Drinking
Marketing and youth Criticism remains high despite industry efforts Many seem to be ignoring the realities
The government’s ability to regulate advertising is limited by the First Amendment
Most in the industry follow voluntary standards Underage drinking has dropped significantly
during the past 10 years Among underage drinkers, less than 10% purchase
the alcohol themselves
DUI Update
Federal legislation SAFETEA-LU expired two years ago The current bill is unlikely to be passed this year
NTSB Forum “Friends don’t let friends drive drunk” versus
“Don’t drink and drive” Interlock First offender interlock is becoming a reality 15 states already have legislation and the number
is growing quickly
Bonus Discussion: Drugged Driving
Drugged driving Drugged driving appears to be as significant as
alcohol impaired driving About 1/3 of drivers killed in motor vehicle
crashes have a drug or drugs in their systems Over 16% of weekend nighttime drivers have
a drug or drugs in their systems One of the key components of the President’s
drug control strategy
