Dram Shop

The term “dram shop” is a legal term that refers to a type of business where alcoholic beverages are served to the public. Examples of dram shops include bars or taverns, and a “dram” is a measurement of a small amount of liquid, namely spirits. Thirty-eight of the 50 states in the U.S. follow the Dram Shop Act.

The Dram Shop Act is a statute that ensures that businesses serving alcohol to customers who are already drunk are responsible for that person’s behavior. This means that the business is held responsible if a drunk person ends up injuring another person because of his intoxication. To explore this concept, consider the following dram shop definition.

Definition of Dram Shop

Noun

  1. A business that sells alcoholic beverages to the public, such as a bar, restaurant, or tavern.

Origin

1715-1725       English

What is a Dram Shop

The term “dram shop” is used to refer to any business that serves alcoholic beverages to the public. An example of a dram shop is a bar or tavern. Dram shop laws are those that make it illegal for businesses to sell alcohol to minors, or to customers who are already visibly drunk. Consider the following example of a dram shop case:

A restaurant sells an alcoholic beverage to Chad, who looks to be a minor, without checking his identification first. Chad becomes intoxicated and, despite being drunk, gets into his car at the end of the meal and drives off. Shortly after merging onto the highway, Chad causes a car accident, injuring the driver of the other car, and her passenger. The restaurant is now liable for Chad’s behavior under the Dram Shop Act, which means it may have to pay for the injured driver’s injuries and car damage.

Dram Shop Laws

Serving alcohol to minors is illegal throughout all 50 states. Most, but not all, states have dram shop laws that assign responsibility to businesses who sell alcohol to already-intoxicated people, or to minors, who go on to hurt themselves or others. These dram shop laws are put in place to hopefully deter bars from serving alcohol to minors. In certain states, such as Texas and New Jersey, minors can sue the business that served them the alcohol for the injuries they sustained while they were drunk.

Most states allow the customer to recover damages when it can be proven that the business knew, or should have known, that the customer was drunk before serving him more alcohol. Some states have clarified the requirements of their dram shop laws to better establish when someone should be cut off. This is because someone can appear to be fully functional, yet still be drunk. For instance, Missouri requires proof that the intoxicated person showed “significantly uncoordinated physical action or significant physical dysfunction.”

Plaintiffs in Illinois can recover damages under the dram shop law after proving that:

  • The defendant was the one who sold the alcohol to the plaintiff.
  • The plaintiff sustained damages because of the sale of that alcohol.
  • The sale of the alcohol was the proximate cause of the plaintiff’s intoxication.
  • Intoxication was at least one of the forces responsible for the plaintiff’s damages.

In Texas, dram shops can protect themselves from liability claims by requiring that their employees attend “seller training programs” to teach them proper conduct. Then the business can prove that the employee being accused of serving alcohol to someone who is already intoxicated knew better because of his having attended the program. It then becomes more difficult for the plaintiff to prove liability because he must show that the employer directly, or indirectly, encouraged the employee to do the wrong thing.

Dram Shop Liability

Dram shop liability is a term that refers to the set of laws that determine the liability of bars, restaurants, liquor stores, and other businesses that serve alcoholic beverages to the public. Dram shop liability is determined when a customer of one of these establishments goes on to cause death or injury to another person as a result of his intoxication.

Certain organizations, such as Mothers Against Drunk Driving (MADD), have lobbied for the enforcement of dram shop liability across the country, to ensure that businesses remain accountable for their actions.

Dram shop violations are liability torts, meaning that businesses that sell alcohol are prohibited from selling alcohol to people who are either already visibly drunk, or minors who are under the age of 21, can be sued in civil court. A person who wishes to pursue a dram shop case must be able to prove these three things:

  1. The person who caused his injury was intoxicated at the time of the incident.
  2. There was an illegal sale of alcohol to that person, meaning that the person was a minor or was already visibly intoxicated.
  3. The sale of the alcohol to that person is what caused or contributed to his intoxication, and therefore the incident.

Most difficult to prove in a dram shop case is the “visibly intoxicated” requirement. People in bars and pubs tend to be boisterous and unruly, and some people are drunk long before they show signs of being intoxicated. Therefore, it is not always clear to businesses when customers have “had enough” to drink, and when they should stop serving them.

Dram Shop Example Involving the Sale of Alcohol to Minors

In January 1995, Charles Shannon and Jarred Sparks, both 13 years old, were passengers in David Farmer’s pick-up truck. Farmer was 16 years old at the time. The three boys drove to City Liquor in Fayetteville, Arkansas, and an employee there sold them beer and malt liquor through the drive-through window, without asking for their identification.

The three boys began drinking in the truck, as they drove to a pool hall in St. Paul. Farmer got out, leaving the other two boys in the truck, where they continued to drink. Shortly thereafter, the two 13-year-old boys drove off, leaving him.

It wasn’t long before the Arkansas State Police were called to the scene of an accident in Madison County, in which the boys’ pickup had left the road, crashed through a fence, hit a telephone pole, and finally stopped after hitting a tree. Both Sparks, who was driving, and Shannon were pronounced dead at the scene. Blood tests later showed that Sparks’ blood alcohol level was .10 percent, and Shannon’s was .07 percent.

Marlan Dale Shannon, Charles’ father, filed a civil lawsuit against City Liquor, accusing the establishment of being negligent in their sale of alcohol to the three minor boys. In his complaint, Shannon argued that it was reasonable to assume that minors who purchased alcohol from a drive-through window would then go on to drive while drunk, endangering their safety and the safety of others on the road. City Liquor filed a motion to dismiss, claiming that Shannon had failed to state a claim upon which relief could be granted. This motion was granted by the trial court.

Shannon, of course, appealed and urged Arkansas to change its laws regarding a vendor’s potential liability in knowingly selling alcohol to minors. He also argued that the trial court erred by ruling that there was no proximate cause between City Liquor’s violation of the statute prohibiting the sale of alcohol to a minor and the accident.

The Supreme Court of the State of Arkansas agreed that the state’s laws needed to be amended. Specifically, the Court held:

“This Court has a duty to change the common law when it is no longer reflective of economic and social needs of society. We conclude, therefore, on the basis of past cases decided by this Court regarding our obligation to adapt our common law to an ever-changing society and as a matter of policy, we should recognize a common-law cause of action against a vendor of liquor who knowingly sells alcohol to a minor.”

The Court also agreed with Shannon’s claim that the City Liquor employee should have been aware of what could have resulted from his sale of alcohol to minors. Specifically, the Court held that “selling alcohol to minors can be a proximate cause because the consumption, resulting intoxication, and injury-producing behavior is reasonably foreseeable.”

Ultimately, the Court reversed the trial court’s decision and remanded the case back to the lower court. The Court wrote in its decision that “a licensed vendor’s violation of the statute prohibiting the sale of alcohol to minors is evidence of negligence to be submitted to a jury.”

Related Legal Terms and Issues

  • Civil Lawsuit – A lawsuit brought about in court when one person claims to have suffered a loss due to the actions of another person.
  • Defendant – A party against whom a lawsuit has been filed in civil court, or who has been accused of, or charged with, a crime or offense.
  • Liabilities – A company’s legal obligations or debts that come up during the course of business.
  • Negligence – Failure to exercise a degree of care that would be taken by another reasonable person in the same circumstances.
  • Plaintiff – A person who brings a legal action against another person or entity, such as in a civil lawsuit, or criminal proceedings.
  • Proximate Cause – An event sufficiently related to an injury to be considered the cause of that injury.
  • Tort – An intentional or negligent act, a civil wrong, as opposed to a criminal act, which causes harm to another.

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