United States: 2019 Liquor Liability Review

1. STATUTE

Alabama's Dram Shop Act, Ala. Code §6-5-71, provides as follows:

  1. Every wife, child, parent or other person who shall be injured in person, property or means of support by any intoxicated person or in consequence of the intoxication of any person shall have a right of action against any person who shall, by selling, giving or otherwise disposing of to another, contrary to the provisions of law, any liquors or beverages, cause the intoxication of such person for all damages actually sustained, as well as exemplary damages.
  2. Upon the death of any party, the action or right of action will survive to or against his executor or administrator.
  3. The party injured, or his legal representative, may commence a joint or separate action against the person intoxicated or the person who furnished the liquor, and all such claims shall be by civil action in any court having jurisdiction thereof. ALA. CODE §6-5-71 (2018).

The Civil Damages Act, Alabama Code §6-5-70, provides that a parent or guardian of a minor may bring a cause of action against someone who unlawfully provides alcoholic beverages to a minor child. The person selling or furnishing the liquor to the minor must have knowledge or be chargeable with notice of knowledge of the person's minor status.

In 1994, a new statute was enacted which provides for liability to third persons who unlawfully sell or furnish alcohol or a controlled substance to a minor who then causes injury to a third person if the injury was proximately caused by the consumption of alcohol. Conviction under a criminal law relating to an unlawful sale shall conclusively establish an unlawful sale for the purposes of this statute. ALA. CODE §6-5-72(c) (2018).

These statutory sections are commonly referred to as the Dram Shop Act (the "Act"). They provide for liability when alcohol is sold "contrary to the provisions of law" or "unlawfully." Title 28 of the Alabama code regulates intoxicating liquors, and therefore, any violation of a provision of Title 28 would constitute unlawfulness under the Dram Shop Act. In addition, rules and regulations of the Alabama Alcoholic Beverage Control Board and violations thereof would also support a cause of action under the Dram Shop Act. In order to show a violation of the Dram Shop Act, the plaintiff must prove three elements: The sale [or provision of alcohol] must have 1) been contrary to the provisions of law; 2) been the cause of the intoxication; and 3) resulted in the plaintiff's injury. Attalla Golf and Country Club, Inc. v. Harris, 601 So.2d 965, 967–68 (Ala. 1992).

The most frequently cited provision is Ala. Admin. Code 20-X-6-.02(4)1 which provides, "[n]o ABC Board on-premises licensee, employee or agent thereof shall serve any person alcoholic beverages if such person appears, considering the totality of the circumstances, to be intoxicated." In respect of minors, Alabama Code §28-3A-25(a)(3) makes it unlawful for any licensee, or their employees, to furnish alcoholic beverages to any person under the legal drinking age or to permit any person under the legal drinking age to consume or possess any alcoholic beverages on the licensee's premises. Finally, trial courts recognize violations of municipal codes regulating the sale of alcoholic beverages, happy hours, etc. as consistent with the provisions of the statutes, and allowing a civil cause of action under the Dram Shop Act.

It should be noted that the Alabama Supreme Court has repeatedly refused to hold a social host liable under the Dram Shop Act. See Runyans v. Littrell, 850 So.2d 244 (Ala. 2002); Williams v. Reasoner, 668 So.2d 541 (Ala. 1995); Gamble v. Neonatal Assoc., P.A., 688 So.2d 878 (Ala. Civ. App. 1997).

Regarding voluntary payment or mental anguish as injuries, the court held that a parent's voluntary payment of an adult child's funeral expenses do not constitute an injury to the parent's property in the context of the Dram Shop Act. Johnson v. Brunswick Riverview Club, Inc., 39 So.3d 132, 138 (Ala. 2009). Further, the court adopted the widely accepted general rule that mental anguish does not constitute an "injury in person" in the context of the Dram Shop Act. Id. at 139.

2. COMMON LAW CAUSE OF ACTION

Alabama no longer allows a common law cause of action for the negligent sale of alcohol to a person who is visibly intoxicated. Such a cause of action was previously recognized by the court. Buchanan v. Merger Enterprises, Inc., 463 So.2d 121 (Ala. 1984). In Buchanan, the court held the common law claim did not fall within the provisions of the Dram Shop Act because it was prior to the enactment of Regulation 20-X-6-.02 and, therefore, there was no law making it unlawful to serve alcohol to individuals who appeared intoxicated. The court also found a common law cause of action in Putnum v. Cromwell, 475 So.2d 524 (Ala. 1985), where the statutory language was not clear regarding selling versus providing liquor to a minor. These decisions, however, were followed by Ward v. Rhodes, Hammonds and Beck, Inc., supra, and Martin v. Watts, 508 So.2d 1136 (Ala. 1987), which held that there was no common law cause of action. The court in Ward rejected the notion that Buchanan created a new cause of action for negligently dispensing alcoholic beverages. 511 So.2d at 165. The Ward decision essentially held Buchanan and Putnum were limited to their facts. See also, Williams v. Reasoner, supra; Krupp Oil Co., Inc. v. Yeargan, et al., 665 So.2d 920, 924 (Ala. 1995).

3. STATUTE OF LIMITATIONS

All actions for negligence causing death or personal injury must be brought within two years. ALA. CODE §6-2-38 (2018).

4. PROPER PLAINTIFFS

The intoxicated person does not have a cause of action under the Dram Shop Act against anyone who unlawfully serves him alcoholic beverages. Ward v. Rhoads, Hammonds and Beck, Inc., supra. This is also true if the intoxicated person is a minor. Maples v. Chinese Palace, Inc., 389 So.2d 120 (Ala. 1980). In Ward, the Alabama Supreme Court specifically held that only innocent third parties injured by an intoxicated person have a cause of action against the server of alcohol.

The minor also does not have a cause of action under the Civil Damages Act. The Civil Damages Act only grants a cause of action to the minor's parents or guardian. In Maples, the court held that in a case where a minor is furnished alcohol and dies in an accident proximately caused by the consumption of the alcohol, the parent is the proper party to bring the lawsuit and that lawsuit is brought under the Civil Damages Act and not under the wrongful death statute. 389 So.2d at 123–24.

With regard to the statutory language "every wife, child, parent or other person . . .," the court in Ward held that the legislature must have intended the wife, child and parent of the innocent party injured by the intoxicated person, to be the proper party plaintiff in such an action. Ward, 511 So.2d at 164. However, in Maples, a plurality opinion, the court had previously allowed the parents of the intoxicated minor to recover under the same language. The Alabama trial courts had conflicting cases on this issue of whether a spouse, parent or child of a deceased intoxicated person has a cause of action against the bar. This issue was addressed by the Alabama Supreme Court in James v. Brewton Motel Mgmt., 570 So.2d 1225 (Ala. 1990), which held the minor children of a deceased intoxicated person had a right of action even where the intoxication was voluntary. Id. at 1230. Following a thorough analysis of the preceding case law, the court found they were also in the class of protected persons. Id.

In respect of "other person(s)" who are able to bring civil claims under the Act, the court in Ward held that this includes anyone "who is proximately injured in person, property or liens of support by any intoxicated person or in the consequence of the intoxication of any person." 511 So.2d at 164. This is broad language and allows any innocent third party who is proximately injured by the intoxicated person to recover damages. In McIsaac v. Monte Carlo Club, Inc., 587 So.2d 320, 324 (Ala. 1991), the court held the phrase "other person" would not be limited only to innocent third parties because the purpose of the statute is to deter drunk driving and protect the public from tortious conduct. McIsaac involved a passenger who was at the bar with his friend who then became intoxicated and drove. Id. at 321.

5. AFFIRMATIVE DEFENSES

The court in Ward held the statute imposes strict liability on the seller of alcoholic beverages and, therefore, there can be no defense of contributory negligence. See also, McIsaac, supra. The defense of assumption of the risk is, however, available. Ward, 511 So.2d at 164. In order to raise assumption of the risk, it must be supported by the facts. Assumption of the risk disregards a party's innocence or fault and focuses on whether he knew there was a risk involved. McIsaac, 587 So.2d at 324.

6. DAMAGES

The court in Maples v. Chinese Palace, Inc., 389 So.2d 120, 128 (Ala. 1980), held that since the legislature did not enact a uniform statute for civil penalties, it was up to the jury to assess damages that they found were appropriate. The Dram Shop Act allows recovery for "all damages actually sustained, as well as exemplary [punitive] damages." The Courts have stated that the Act "is penal in nature and is intended to punish the owners of establishments that continue to serve customers after they have become intoxicated." Duckett v. Wilson Hotel Mgmt. Co., Inc., 669 So.2d 977 (Ala. Civ. App. 1995).

The Alabama Supreme Court directly addressed this provision in Life Ins. Co. v. Smith, 719 So.2d 797 (1998), where it held that a jury verdict specifically awarding either compensatory damages or nominal damages is required for an award of punitive damages to be upheld. Id. at 806. Under the Smith rule, the jury's verdict must include a monetary award of compensatory damages, or if appropriate, only an award of nominal damages. Big 3 Motors, Inc. v. Hawie, 895 So.2d 349, 354 (Ala. Civ. App. 2004) (citing Smith, supra).

If compensatory damages are no longer necessary by reason of payments already made or awarded, the plaintiff should be entitled to nominal damages pursuant to proper instructions from the trial court. Big 3 Motors, Inc., supra. Where the award of nominal damages "fully compensates the plaintiff to the extent that the defendant is, or could have been, liable," an award of punitive damages based on the nominal award must withstand scrutiny. Smith, 719 So.2d at 806. Punitive damages may be awarded in wrongful death actions. ALA. CODE §6-5-410 (2018). Pursuant to Ala. Code §6-11-21 (2018), in all civil actions in Alabama where an entitlement to punitive damages shall have been established under applicable laws, no award of punitive damages may exceed three times the compensatory damages of the party claiming punitive damages or $500,000, whichever is greater. If the defendant is a small business (defined as having a net worth of $2 million or less), no award of punitive damages may exceed $50,000 or 10 percent of the business's net worth, whichever is greater. §6-11-21 (b).

7. JURISDICTIONAL ISSUES

The United States District Court for the Northern District of Alabama, in Butler v. Beer Across America, 83 F.Supp.2d 1261 (N.D. Ala. 2000), held that a seller of alcoholic beverages over the internet was not immune from suit under the Civil Damages Act (where plaintiff had purchased beer over the internet from an out-of-state corporation).

Footnote

1 Regulation of the Alcoholic Beverage Control Board.

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