Dram Shop Law and Liability (Podcast)

In this podcast, Paul Kelley explains dram shop liabilities. He explains what dram shops are. Then, he outlines how they can be liable for injuries when they overserve a patron who gets into a drunk driving accident or causes certain other types of injuries.

John Maher: Hi, I’m John Maher. I’m here today with Paul Kelley. Paul is a partner with the Kentucky personal injury law firm, Satterley and Kelley, which has over 30 years of collective experience in handling personal injury and wrongful death claims. Today we’re talking about dram shop law and liability. Welcome, Paul.

Paul Kelley: Hey, John. How you doing today?

What Is a Dram Shop?

John: Good, thanks. Paul. What is a dram shop? Where can these cases originate?

Paul: Sure. A dram shop is essentially a bar or a restaurant. It could be a venue like a concert hall, a stadium. It’s a place that sells liquor to patrons. Those patrons occasionally can be overserved, can become intoxicated and cause injuries to others in a variety of ways. Many states, including the state of Kentucky, have dram shop laws that can allow people to hold a dram shop or the restaurant, bar, facility responsible for causing that injury.

Types of Liability Cases Related to Dram Shop Overserving

John: Okay. Do liquor liability cases like this only happen in the case of a car accident where somebody was overserved and then they get into a drunk driving accident afterwards? Or can it be for other reasons as well?

Paul: That’s certainly the most common, motor vehicle collisions. I mean, the classic dram shop case is one where someone goes to a bar or restaurant and consumes a considerable amount of alcohol over a period of time. That person becomes visibly intoxicated to the dram shop, to the bar, to the person serving them the alcohol.

That’s really the standard in Kentucky and in most states. It’s not that the bar contributed to the intoxication. It’s that the bar contributed to intoxication to the point that the bar knew, or should have known, that was occurring, and allowed the person to become overserved and then allowed the person to leave the bar, get into their car and cause an injury.

There have been dram shop cases for circumstances other than motor vehicle accidents. I mean, we’ve seen them in physical assaults, gun disputes, sexual assaults, things of that nature. I think the burden to prove a case in things other than motor vehicles can be a little heightened. Certainly, there’s always foreseeability issues and things like that, that a bar would say, “Well, guys, we didn’t know that we served somebody, that they would sexually assault a person in another location miles away.” Certainly, cases like that have been filed and successfully pursued.

But your most common case is going to be the situation where a person gets behind the wheel of their car after being overserved by that bar, restaurant. They didn’t even necessarily have to have all of the alcohol in that one location. You could have five drinks at your home or at another establishment. But it’s really what happened in that particular dram shop as to whether that dram shop can be held responsible for causing or contributing to an injury.

Again, the standard always is did they know, or should know, that this person was intoxicated to the point that they would be a danger behind the wheel of a car. There’s no hard and fast rule. I’m sure you’ve heard, all of the listeners have heard about the various drunk driving laws in all the states. Most states have a blood alcohol level of 0.08, which is presumptively intoxicated.

There’s nothing that says that if you get the person to 0.08, that’s going to be a presumptive liability for a dram shop. Everybody is different. Some people, for whatever reason, have a very high tolerance to alcohol, and 0.08, at least to the casual observer, is nothing for that person. Other people, a couple drinks, don’t get anywhere near the presumptive level, they may be visibly intoxicated at that point, and the dram shop should have taken some responsibilities to try to prevent that person from becoming more intoxicated, and in some situations, to prevent that person from getting by the wheel of a car.

Responsible Parties in a Dram Shop Case

John: Okay. Who are the responsible parties in a liquor liability or dram shop case?

Paul: Well, the obvious person who’s liable is the person that overconsumed alcohol and caused a collision, or committed a crime or assault or something like that. The individual is ultimately the one that’s responsible. Some states do it a little bit differently, but in Kentucky, the way we’ve handled it is we have a statute that says, “The driver is always the primarily responsible party for causing an injury or death as a result of drunken driving or some other substance.”

But we’ve carved out this little exception that enables us to also hold the dram shop or the bar, the restaurant, the concert hall, the football stadium, places like that, they become secondarily liable. That’s more legal stuff that our listeners don’t need to worry about, but for the purposes of somebody gets into a motor vehicle collision, you’re minding your own business and somebody slams in your vehicle and causes horrible physical injuries, a lot of folks may be thinking, “Well, the driver.”

A big problem that I think everybody has in every state, and we certainly have in Kentucky, there are insurance requirements for drivers of motor vehicles, but the minimum limits are $25,000 per person, $50,000 per incident. What that means is that if it’s just one person in the vehicle that’s hurt, it doesn’t matter what the injuries are. The insurance could literally be limited to $25,000. You could have two broken arms and seven broken ribs and a multitude of other injuries that incur tens of thousands, hundreds of thousands of dollars of medical expenses. So you’re limited to that insurance.

Now, fortunately, not everybody carries the minimum limits, but a lot of people do. So folks are thinking, “Well, my gosh, what am I going to do?” Well, that’s where we come in. I have no idea when a case comes in the door, for the most part, whether the defendant driver was consuming alcohol or if that is part of the police record. We don’t know where and the circumstances.

Other Responsible Parties in Liquor Liability Cases

John: Right. They could have been consuming the alcohol at home and then gone out and driven.

Paul: That’s right. There’s not going to be a dram shop in that circumstance. There typically is not a dram shop case if somebody just goes to a private person’s party and is served alcohol there. It’s generally limited to establishments, places that serve alcohol for money or have liquor licenses and things like that.

Now, there’s always some carve-outs. If a minor’s involved in a drunk driving accident, you can hold either parents accountable, or you can hold the venue where they were drinking, even if that was a private situation.

John: If there was maybe underage drinking involved where there were adults present or something like that.

Paul: Yeah. That’s absolutely right. I mean, we obviously have a huge public policy against drinking and driving in general. We definitely have a huge policy against drinking and driving by minors. If a minor was served alcohol by their parents or served alcohol at some other adult’s home, that’s a big problem for everybody.

You can hold the adults responsible, in addition to the kid. That’s a bit of a digression, but when we get a case like that, the first thing that we do is try to figure out where the person consumed alcohol and see where that leads. Frequently, it leads to a bar or a restaurant. Over a period of time, we’re able to conduct discovery and figure out that they were either served a lot of alcohol there, where it would’ve been obvious.

Again, I told you there’s not really a hard line as to, well, 0.08 for one person is different than for another person. 0.15, I mean, that’s almost twice the legal limit, that doesn’t establish a bright line, either. It depends on the person. A lot of it is subjective, but there certainly gets to a point where anybody could know that they likely overserved somebody.

I mean, think about your common experience everywhere in America. The Super Bowl is coming up here in a couple weeks. People sit in a bar for four hours, and they’re served by the same person for that four-hour period of time, and drink after drink after drink. They know at some point that this person probably is unfit to drive a vehicle. You don’t necessarily have to exhibit signs of slurring and stumbling and things like that. If you’ve served somebody 12 drinks in a three-hour period of time, they’re probably beyond the capacity to safely drive a vehicle, and you should know that.

Then, certainly, in the situation where the person is not being served by the same person the entire time, or again, they went to another establishment, it becomes more difficult. It’s a little bit more subjective. But all these places either have policies in place to prevent alcohol intoxication or overservice, or they should have policies in place. I mean, that’s really how we end up proving those cases. Either you’ve failed to put a policy together, period, which is a big problem because it’s a tremendous privilege that a bar or restaurant or any drinking establishment gets to be able to serve alcohol. I mean, every state, every city requires a license. You hear all the time, “Oh, this new place opened up. They got a liquor license, but it’s limited. They can only sell beer.” Or whatever the case, or that liquor license.

Responsibilities for Liquor License Holders

John: Right. Or there’s only a certain number of licenses available for that town, and one just opened up, and this new place got it. Something like that.

Paul: Absolutely. With that privilege comes tremendous responsibility, of course. Your big franchises, you know who they are. They’re all over the country. They typically have policies in place. The best ones actually follow the policies and limit alcohol consumption and monitor and implement all of the things that you would do to try to prevent overservice.

What my experience, unfortunately, has been is that the policy exists, but the policy is not followed. They want to sell as much alcohol, food, and whatever they can to a particular person. Most of the waitstaff and bartenders and whatnot are not trained properly. They’re not monitored to determine whether they’re following the policy. That’s always a big problem because it creates a standard of care.

These policies will even go so far as to give them charts that’ll say, “If you serve somebody so much alcohol over a period of time, there’s a burn-off rate.” It sounds complicated, but it’s real easy for somebody to say, “You need to cut somebody off at four drinks in an hour and a half,” or whatever the policy happens to be.

The bigger problem always is, “Well, we don’t have a policy.” That just means it’s essentially the wild west in that facility, and whatever goes. I’d say that that’s probably more common at your smaller-type venues or places that aren’t franchised and that sort of thing. But to get back to your question, typically speaking, the driver of the vehicle is always going to be primarily at fault and will never be able to avoid liability.

If they crashed into somebody and caused an injury or death, they’re on the hook. The dram shop is not automatically on the hook. We still have to prove these things. We have to prove that they either contributed, in whole or in part, to the intoxication that they knew, or should have known, that the person who ultimately caused the collision was overserved, and more likely to cause whatever ultimately occurred.

Establishing Dram Shop Negligence

John: How do you end up showing negligence of a dram shop in a liquor liability case? Again, you go back to the policy. You could point to the bar or restaurant maybe exceeding the limit of what they had set up in their policy, or if they don’t have a policy to begin with, that’s an issue.

Are there other ways that you can show negligence? Do you end up having to do interviews with the owner or the servers at the bar to try to figure out exactly what happened? How does that all work?

Paul: Sure. Again, it all depends on the access that you have to various people, but the driver of the vehicle who caused the collision frequently can be the best source of information. It’s an unspoken issue out there. I mean, if they’ve caused a collision like that, they want the bar to be on the hook as much as them. I mean, they’re in big trouble no matter what.

John: Right. It doesn’t eliminate their responsibility, but at least it puts some of the onus on the bar instead.

Paul: We’ve certainly seen this happen. Sometimes the at-fault driver dies in the collision, and you have no access to that person. Sometimes they are so intoxicated, they black out, and all they can tell you is, “I don’t remember anything.” Or they’re so injured that they don’t remember anything. We go through the process. It takes a long time to try to figure it out out because sometimes we’re starting at ground zero.

We have no clue as to who could have been involved. Ultimately, you want to talk to anyone that was consuming or present when the driver consumed alcohol. I mean, that’s a big factor. You want to get information concerning this person’s demeanor before and after entering the bar, how long they’d been there, what they drank, as much as you can recall, quickly, they drank the alcohol. You want to get information like that. That can certainly be key.

Then, yes, you absolutely have to talk to the bartenders and the waitstaff, the people that actually serve the alcohol. Now, typically, we wouldn’t be able to interview those people. I mean, you have to file a lawsuit against the entity. You have to take a deposition and get their testimony under oath. Lots of times, as you can probably imagine, the waitstaff and bartenders, they just can’t recall what happened. It could be intentional. It could be that they work for such a place that there’s so many people coming through that they couldn’t possibly remember.

You want to find out how people pay. I mean, we’ve almost gotten to the point today where hardly anybody takes cash. I mean, you can’t go to a ballgame. You can’t go to any event anymore. It’s irritating. It’s irritating to me when I have to use a credit card for a $5 purchase. But credit cards are great for creating histories. Most of these places have electronic systems now. They maintain those systems for a period of time, and they can access what they served or what they sold to somebody. Obviously, somebody could have paid for 12 people, and it looks more than what it was. But you get the point. That is a way to objectively recreate the alcohol consumption by finding out what they bought.

A lot of these places have video surveillance systems. We’ve seen that before. It takes time and effort to do, but you can literally track a person when they walk into a bar, and you can cover every minute that they’re there and at least get some idea what they’re drinking during the period of time.

John: Right. How many times they went up to the bar and got another drink or something like that. Yeah.

Paul: That’s right. Maybe they just sat at the bar, and we got to see them the entire time that they were there. But it can be a challenge. It can be a challenge for sure, and it requires a lot of time, effort, energy, sometimes a lot of money to do. It doesn’t always work out. If you’re able to establish that the at-fault driver was intoxicated, and everybody should have known that person was intoxicated, and they got behind the wheel of the car, and they injured somebody, or they did something else that’s terrible, typically speaking, you’ve got a pretty good case.

Obviously, whenever there’s a DUI-type accident or collision, I mean, the injuries are almost always terrible and catastrophic, and the damages are high. This gives people an opportunity to be properly compensated for their injuries as opposed to those little insurance limits that, for some reason, most of the people who get involved in these kinds of things tend to have the lower limits.

It’s another way for people to get proper recovery. It’s also another way to hold these businesses accountable and make sure that they understand and appreciate the responsibility that they have that comes with this privilege that they’ve been granted.

Contact Satterley and Kelley for Personal Injury Law Needs

John: All right. Well, that’s really great information, Paul. Thanks again for speaking with me today.

Paul: Thanks, John, I appreciate it.

John: For more information about dram shop liability or mesothelioma and asbestos exposure, visit the law firm of Satterley and Kelley at satterleylaw.com, or call 855-385-9532.