What the Dram Shop Act Means to Sellers, Servers, and Bars

Dram Shop for Sellers and Bars

Dram Shop for Sellers and Bars

Accountability is an integral part of society and is meant to be attributed to us equally. However, sometimes the distribution of accountability is not as comprehensive as it should be.

Alcohol is liberally served in countless restaurants, taverns, and bars for relatively modest prices depending on the location. Yet, the actions of the individuals who have consumed too much alcohol can be dangerous or even lethal.

To combat this, the Dram Shop Act has been enforced in nearly every state to hold the patrons responsible and the establishment that served them. However, what all of this means can be somewhat tricky to understand.

We hope to provide a little insight into what these laws will mean for each party involved with this article.

What is the Dram Shop Act?

We first need to understand what precisely the Dram Shop Act entails before fully understanding how it affects the people involved.

The Dram Shop Act is simply a broad term that denotes states that maintain dram shop liability laws. Certain states enforce these laws to ensure that you can hold the actions of intoxicated patrons accountable against the establishments that enabled their reckless behavior.

For example, the liable party must be held responsible when an intoxicated person strikes another vehicle and causes grievous injury or even death.

A dram shop liability law means that when a patron is responsible for a collision or injures somebody while intoxicated, the establishment can be held accountable for its actions.

Essentially, dram shop liability laws make it so that establishments that continue serving alcohol to intoxicated patrons or fall below the age restriction for the consumption of alcohol can be punished.

Dram Shop Act

However, dram shop liability is not a federally mandated policy and is only present in specific states. Fortunately, states that lack these dram shop liability laws are in the minority.

The states that have some form of dram shop state laws are:

Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kentucky, Maine, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, Tennessee, Texas, Utah, Vermont, Washington, West Virginia, Wisconsin, Wyoming

Currently, the state statutes that lack (or do not enforce) the Dram Shop Act are:

  • Delaware
  • Kansas
  • Louisiana
  • Maryland
  • Nebraska
  • Nevada
  • South Dakota
  • Virginia

Aside from these few states, the rest of the country actively participates in the Dram Shop Act to maintain a higher degree of accountability for everyone involved in drunk driving accidents.

However, there are still distinct differences between how each state enforces these laws and what qualifies as violations. Specifically, the qualifiers for what denotes a patron whose continued consumption of alcohol under a vendor’s auspices presents a danger vary from state to state.

One of the mainstays of the Dram Shop Act is that an establishment must not serve alcohol if the patron is under the federal drinking age of 21. This invariable law is applicable across the country, even in states that do not enforce the Dram Shop Act.

Since intoxication of a minor is highly illegal, even establishments in states like Louisiana or Delaware risk losing their ability to serve alcohol if they are found to be serving underage customers. It’s the responsibility of these establishments to check IDs and verify their proof of age before the sale of alcohol takes place.

The other major qualifier is a little more open to interpretation. If an establishment serves a “visibly intoxicated patron,” they risk being subject to the Dram Shop Act. However, what qualifies as “visibly intoxicated” has slight variances on a state-by-state basis.

For example, in Missouri, the definition of being visibly intoxicated is a patron being:

“Inebriated to such an extent that the impairment is shown by significantly uncoordinated physical action or significant physical dysfunction.”

This definition means the bartender will determine if the patron is past the limit based on whether they are stumbling or slurring their speech.

Should an establishment patron meet any of these criteria, be served alcohol, and then cause a collision, the Dram Shop Act holds the establishment liable. The victims of drunk driving accidents can file personal injury claims against both the driver and the establishment to recover their medical costs and property damages.

However, in most states and jurisdictions, the injured person is not likely to get compensated for punitive damages, which is the case with Texas Dram Shop laws.

Granted, it will need to be proven that the establishment negligently served alcohol to the driver and was explicitly responsible for being intoxicated enough to cause the collision. However, the Dram Shop Act requires that negligence be proven to ensure false claims are not filed.

What the Dram Shop Act Means For Bars

A vendor of alcohol provides a service to consenting adults who wish to enjoy alcoholic beverages. However, since the human body cannot reliably function when exposed to an excess of alcohol, it is easy to lose control of faculties. The vendors of alcohol might be offering their services to consenting adults.

Still, drinking establishments have an unspoken understanding that some customers need to be cut off before they get too drunk. Since dram shop laws are designed to provide a legal basis for this unspoken rule, the vendors are more accountable than ever before. They must watch their customers for signs of intoxication, or they can lose their liquor license or run into trouble with the law.

The Dram Shop Act allows victims of motor vehicle collisions to seek legal restitution against the drunk driver and the establishment that produced their intoxicated state. This ability means that bars, taverns, at restaurants can face legal claims filed by the victims left behind by their patrons.

Dram Shop Act for Bars

This process makes it essential for these particular vendors to inform their staff to be aware of their clientele’s ages and level of intoxication. If their employees are found to negligently overserve a patron, then the victim of the collision’s claim against the establishment’s owners is more than likely to succeed.

That said, it is worth noting that the odds of a claim being successfully filed against a bar or restaurant are less likely if they made reasonable efforts to prevent the patron from operating a vehicle or from overserving.

Unfortunately, the reality is that short of refusing to continue serving an intoxicated client, the only thing the establishment has the power to do is contact law enforcement, especially since there is no law allowing them to confiscate keys from customers.

Additionally, the ability to file a claim is not possible if the patron was not intoxicated when they served the patron. The establishment can only be held liable if the patron was already drunk when service began. However, a bar or restaurant that offers alcohol is not the only one subject to this kind of claim.

What the Dram Shop Act Means For Sellers

Eateries and bars are far from the only types of establishments that offer alcohol. There are also countless liquor stores across the country. Unlike bars, which need to ensure that they cut off their customers who are actively imbibing alcohol, liquor stores only vend closed containers and do not allow the consumption of their products within the store itself.

These retailers are also subject to a degree of liability under the Dram Shop Act, albeit to a much lesser extent than bars or restaurants would be.

Dram Shop for Sellers

This lack of in-house drinking means that there is no way for a liquor store to monitor the rate of consumption for their customers.

The only thing a liquor store can effectively monitor is their customers’ level of intoxication and ages before selling them any bottles of alcohol.

Therefore, if a customer comes in who is visibly intoxicated or below the legal age, and they sell alcohol to them, which they consume and then cause a collision, dram shop liability is a factor.

Like bars and restaurants, it needs to be proven that the alcohol sold by the particular store was the product that put the driver over the edge and made them a threat to those around them.

Without proof of fault and negligence, there is no basis for the claim. However, if you can prove it, the suit has a greater chance of success.

In summation, the only difference is that the Dram Shop Act only applies to customers who became intoxicated or further intoxicated outside the borders of the establishment rather than within it.

What the Dram Shop Act Means For Servers

Let us start by examining the role of a server in a commercial establishment. This particular detail has a two-pronged meaning depending on the specific circumstances of the server.

In commercial establishments like bars and restaurants, servers like bartenders and waiters are responsible for determining if a patron is too intoxicated or too young to consume alcohol safely. They are also expected to prevent an intoxicated patron from operating a motor vehicle if they present a clear danger.

However, they have limited power and can only contact the authorities to prevent a patron from driving under the influence forcibly.

Dram Shop Servers

In commercial establishments, the server cannot be sued under the Dram Shop Act by the victim. The victim can only file suit against the establishment the server works for. However, this does not mean that the server is free from responsibility or accountability.

For example, suppose a server is found to have neglected their duties of evaluating a customer. In that case, they will likely face disciplinary action from their employer, which can be a legally allowed consequence for their negligence. For the most part, that is the extent of the implications of the server’s role in the Dram Shop Act. This limitation is only applicable to commercial employees, though.

Another type of server does not have to answer an employer when serving alcohol. This type of server is the one you find in the privacy of domestic residences like apartments and houses.

However, these servers do not directly fall under the Dram Shop Act and fall under the auspices of social host liability. The laws regarding social host liability are similar to those that regulate the dram shop liability laws. The critical difference is that you would file a civil liability claim against the homeowner who served the alcohol.

Like the Dram Shop Act, social host liability is equally limited by state legislation, so not every state will enable you to file a claim against a homeowner negligently serving alcohol. However, those that do will likely also be enforcing the Dram Shop Act in earnest.

Closing Statements

Unfortunately, the Dram Shop Act is not an all-encompassing legal principle across the country. While most states enforce it, others do not, and some, like Louisiana, even actively fight it.

However, those states that actively implement the Dram Shop Act enable victims of drunk drivers responsible for those car accidents. They can hold vendors accountable for the negligence that allowed their patrons to operate a vehicle while intoxicated.

These particular laws were designed to discourage establishments from enabling intoxicated individuals while allowing enhanced restitution for the victims. If you live in one of the states that enforce Dram Shop laws, you will have an easier time recouping your losses. Regardless of the exact details, the best thing anyone can do following a drunk driving accident is to get legal advice from a Dram Shop lawyer.

Closing Statements

Whether your state enforces the Dram Shop Act, personal injury claims involving drunk drivers are extremely costly endeavors. You are placed in a position where you must pay for your medical costs, prescribed medicines, and the increasing cost of daily living. This burden can quickly become financially overwhelming, depending on your circumstances.

Fortunately, plaintiffs can apply for financial resources to make the costs a little more manageable. Legal funding involves a company providing you with funds to use for essentials while waiting on your Dram Shop claim.

These funds make paying for rent, groceries, and utility bills easier. You are not responsible for repaying the funds advanced to you personally. Instead, the funds are repaid from a portion of your final lawsuit settlement or trial award. The best part is that you are not expected to repay the lawsuit funding advanced to you if you go to court and lose. If you do not have a recovery on your Dram Shop case, neither do we.

If legal funding sounds like a financial resource that you want to learn more about and use to your advantage, contact The team at Express Legal Funding. Because if you require a risk-free cash advance on your Dram Shop claim, we are the legal funding company to call. So give us a call or apply online anytime. There are no obligations, just a free consultation to see if you can get approved for pre-settlement funding.

About the Author

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Strategy Director at Express Legal Funding | Website

Aaron R. Winston is the Strategy Director of Express Legal Funding. As "The Legal Funding Expert," Aaron has more than ten years of experience in the consumer finance industry. Most of which was as a consultant to a top financial advisory firm, managing 400+ million USD in client wealth. 

As Strategy Director of Express Legal Funding, he has devoted thousands of hours to advocating for the consumer. Aaron's "it factor" is that he is a tireless and inventive thought leader who has made great strides by conveying his legal knowledge and diverse expertise to the public. More clients and lawyers understand the facts about pre-settlement funding because of Aaron's legal and financial service SEO mastery. 

Aaron has a scholarly approach to business. In early 2022, Aaron Winston gained the Search Engine Optimization and the Google Ads LinkedIn skills assessment badges. He placed in the top 5% of those who took the SEO skills test assessment. 

Aaron's work has been granted copyright protection by the United States Copyright Office. He has gained positive notoriety via interviews and case studies, which are a byproduct of his successes. Aaron R. Winston was featured in a smith.ai interview (2021) and company growth case study (2022).

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