Liquor Licensee Liability Laws

Most states in the US have some form of laws imposing liability on liquor licensees that serve liquor to clearly intoxicated persons who then go out to cause injury or wrongful death to a third party, usually by causing a car crash. The laws are known as “dram shop” acts. Organizations such as MADD (Mothers Against Drunk Driving) have been quite successful in campaigning and lobbying to get such laws passed in nearly every state except Nevada. A notable example involves a 1999 New Jersey case in which a man who had been at a Giants game hit and paralyzed a six-year-old girl on his drive home. This man had been served fourteen beers at the game. The parents of the girl, whose suit included the stadium, the team and the NFL, were awarded $135 million dollars.

The dram shop laws vary state to state. The central differences lie in the language which defines the alcohol purveyors’ standards of gauging patrons’ intoxication levels. In some states the person refused service must be visibly impaired in his physical actions or be manifestly intoxicated to the point of posing a danger to himself or others. Still other wording includes directives to withhold alcohol from persons who are known alcoholics, or the “habitually intoxicated.” In a 1981 Massachusetts appellate ruling, the Court held that evidence of “loud and vulgar” behavior on the part of the patron who leaves drunk and causes a car crash, is sufficient evidence to advance the case to a jury.

With the dram shop laws, state legislatures are trying to balance the practical difficulty faced by waiters, waitresses and bartenders in determining who has had too much to drink, with the need to force establishments that serve alcohol to do all they can to protect the public. Requirements such as the one in the Massachusetts dram shop act, that a jury find the conduct of the establishment “wilfull, wanton, or reckless” provide adequate protection to responsible bars and restaurants – though the owners might think otherwise. Opponents of the dram shop laws, generally owners of places that serve liquor, claim that it is impossible, especially in the noisy atmosphere of a bar, to separate the merely fun-loving animated patron from the dangerously drunk. Proponents of the laws and those who want them strengthened, argue that the privilege of owning a liquor license, which can be worth a great deal of money, should carry with it the obligation to insure that staff serving liquor are properly trained to recongize when someone has had enough.

Dram shop cases are not easy to win unless there is solid evidence, generally from witnesses, that the person who caused a serious motor vehicle accident was openly and obviously drunk when the establishment served him more alcohol. When juries make such findings, however, they often show their anger at the irresponsible establishment by awarding large verdicts to seriously injured plaintiffs.