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self-study / Torts

Liability for serving alcohol

Johnson lars web

Lars C. Johnson

Mediator, Signature Resolution

Fax: (818) 348-7921

Lars was a litigator for 20 years before joining Signature as a full-time mediator. He has extensive experience handling high-stakes catastrophic injury and wrongful death cases, as well as insurance coverage disputes.

I recently encountered a case involving a liability claim related to serving alcohol. The drinker's intoxication was alleged to be a factor in causing injury to the plaintiff and the plaintiff sued both the drinker and the server. In reviewing the law, I found this area to be quite technical. These cases generally hinge on a few important factors including: (1) whether the server is a business or "private host"; (2) whether the intoxicated person is a minor; (3) whether the intoxication occurs in connection with work; and (4) whether the defendant has a "special relationship" duty to protect the plaintiff separate from any duty related to serving alcohol. The following is a discussion of the law in this area.

Common Law

Historically, server liability in California was a matter of common law. Through the years, the courts consistently held that a server of alcohol is not liable for injuries caused by intoxication of the drinker. The drinker's actions, rather than that of the server, was deemed the "proximate cause" of the injury. See Cole v. Rush, 45 Cal. 2d 345, 356 (1955).

The courts did carve out certain exceptions. For example, in Thomas v. Bruza, 151 Cal. App. 2d 150 (1957), the plaintiff filed suit against a saloon when he was injured by another intoxicated patron. The court held that the plaintiff should have been permitted to amend his complaint to allege defendant failed to protect him from a dangerous patron. Id. at 156,

In Brockett v. Kitchen Boyd Motor Co., 264 Cal. App. 2d 69 (1968), the court reversed judgment for the defendant following the granting of a demurrer. The plaintiff alleged he was injured in an auto accident caused by an intoxicated, under age driver employed by the defendant. The defendant allegedly served the minor alcohol at a company Christmas party, and then assisted the minor into his automobile and directed him to drive home. While recognizing the rule in Cole that the provider of alcohol cannot be held liable for supplying alcohol, the Brockett court found "other factors" that warranted liability including that the defendant had assumed responsibility to monitor the minor-employee and essentially aided and abetted the minor in operating his vehicle while intoxicated. 264 Cal. App. 2d at 72.

Despite these isolated exceptions, courts continued to enforce the basic rule stated in Cole that servers of alcohol are not the proximate cause of injuries related to intoxication. Then, in a series of rulings in the 1970s, the California Supreme Court made a dramatic shift. It abandoned its own longstanding precedent in favor of reinstating broad server liability.

In Vesely v. Sager, 5 Cal. 3d 153 (1971), an injured motorist brought an action against a tavern owner after being struck by an intoxicated tavern patron. The trial court dismissed the complaint. The Supreme Court reversed. The court held:

"The traditional common law rule would deny recovery on the ground that the furnishing of alcoholic beverages is not the proximate cause of the injuries suffered by the third person. We have determined that this rule is patently unsound and that civil liability results when a vendor furnishes alcoholic beverages to a customer in violation of Business and Professions Code Section 25602 and each of the conditions set forth in Evidence Code Section 669, subdivision (a) is established." 5 Cal. 3d at 157. At the time, Section 25602 made it a misdemeanor to knowingly serve alcohol to an obviously intoxicated patron, while Section 669 of the Evidence Code codified the negligence per se doctrine.

In Bernhard v. Harrah's Club, 16 Cal. 3d 313 (1976), the court held that a Nevada tavern owner could be held liable for serving alcohol to an obviously intoxicated patron who became involved in an accident in California. Notwithstanding that Business and Profession Code Section 25602 did not apply to a Nevada operation (the statute applied to California businesses), the court endorsed liability:

"Although we chose to impose liability on the Vesely defendant on the basis of his violating the applicable statute, the clear import of our decision was that there was no bar to civil liability under modern negligence law. Certainly, we said nothing in Vesely indicative of an intention to retain the former rule that an action at common law does not lie. The fact then, that in the case at bench, Section 25602 of the Business and Professions Code is not applicable to this defendant in Nevada so as to warrant the imposition of civil liability on the basis of its violation, does not preclude recovery on the basis of negligence apart from the statute." Id. at 324.

In Coulter v. Superior Court, 21 Cal. 3d 144 (1978), the court considered "whether the noncommercial suppliers of alcoholic beverages may be held liable to third persons injured by reason of the intoxication of the consumer of those beverages." Id. at 147. There, the plaintiff was a passenger of a vehicle operated by an intoxicated driver who was injured when the driver lost control of the vehicle. He sued the owner of an apartment complex whose management allegedly provided the driver alcohol. Id. at 147-48. In reversing judgment for the defendant following a demurrer, the Supreme Court held:

"We will conclude that a social host who furnishes alcoholic beverages to an obviously intoxicated person, under circumstances which create a reasonably foreseeable risk of harm to others, may be held legally accountable to those third persons who are injured when that harm occurs."

The court further noted:

"As will appear, section 25602 is not limited by its terms to persons who furnish liquor to others for profit. Furthermore, well established general negligence principles lead us to conclude, independently of statute, that a social host or other noncommercial provider of alcoholic beverages owes to the general public a duty to refuse to furnish such beverages to an obviously intoxicated person if, under the circumstances, such person thereby constitutes a reasonably foreseeable danger or risk of injury to third persons." Id. at 149-50.

Thus, by 1978, server liability was alive and well.

Statutory Changes

That same year, the Legislature would pass significant "dram shop" legislation, overturning the common law and reinstating broad server immunity.

First, the Legislature passed Civil Code Section 1714. Among other things, the new law provided:

"It is the intent of the Legislature to abrogate the holdings in cases such as Vesely v. Sager, 5 Cal. 3d 153 (1971), Bernhard v. Harrah's Club, 16 Cal. 3d 313 (1976), and Coulter v. Superior Court, 21 Cal. 3d 144 (1978), and to reinstate the prior judicial interpretation of this section as it relates to proximate cause for injuries incurred as a result of furnishing alcoholic beverages to an intoxicated person, namely that the furnishing of alcoholic beverages is not the proximate cause of injuries resulting from intoxication, but rather the consumption of alcoholic beverages is the proximate cause of injuries inflicted upon another by an intoxicated person. Civil Code 1714(b).

As to "social hosts", subdivision (c) stated:

"[N]o social host who furnishes alcoholic beverages to any person may be held legally accountable for damages suffered by that person, or for injury to the person or property of, or death of, any third person, resulting from the consumption of those beverages." Civil Code Section 1714(c).

The Legislature also amended Section 25602 of the Business and Professions Code, adding subdivision (b):

"No person who sells, furnishes, gives, or causes to be sold, furnished, or given away, any alcoholic beverage pursuant to subdivision (a) of this section shall be civilly liable to any injured person or the estate of such person for injuries inflicted on that person as a result of intoxication by the consumer of such alcoholic beverage.

New subdivision (c) added:

"The Legislature hereby declares that this section shall be interpreted so that the holdings in cases such as Vesely v. Sager (5 Cal.3d 153), Bernhard v. Harrah's Club (16 Cal.3d 313) and Coulter v. Superior Court (_____ Cal.3d _____) be abrogated in favor of prior judicial interpretation finding the consumption of alcoholic beverages rather than the serving of alcoholic beverages as the proximate cause of injuries inflicted upon another by an intoxicated person."

Despite these sweeping changes, the Legislature did not eliminate all server liability. In particular, Section 25602.1 of the Business and Professions Code allowed for liability against "any person licensed pursuant to Section 23300 who sells, furnishes, gives or causes to be sold, furnished or given away any alcoholic beverage to any obviously intoxicated minor where the furnishing, sale or giving of such beverage to the minor is the proximate cause of the personal injury or death sustained by such person."

Server immunity would be further curtailed in subsequent years.

In 1986, Section 25602.1 was expanded to apply to all "persons authorized by the federal government to sell alcoholic beverages on federal enclaves, and any other persons who sell or cause to be sold alcoholic beverages" to an obviously intoxicated minor. (Emphasis added.)

In 2010, the Legislature added subdivision (d) to Civil Code 1714:

"Nothing in subdivision (c) shall preclude a claim against a parent, guardian, or another adult who knowingly furnishes alcoholic beverages at his or her residence to a person whom he or she knows, or should have known, to be under 21 years of age, in which case, notwithstanding subdivision (b), the furnishing of the alcoholic beverage may be found to be the proximate cause of resulting injuries or death." Id. (emphasis added).

Subdivision 1714(d)(2) now further provides:

"A claim under this subdivision may be brought by, or on behalf of, the person under 21 years of age or by a person who was harmed by the person under 21 years of age."

Alternative Theories of Liability

While server liability has been significantly limited, there remain viable theories of liability against those who serve alcohol.

Employment-Related Drinking

An employer is liable for torts committed by employees within the scope of employment. Perez v. Van Groningen & Sons, Inc., 41 Cal. 3d 962, 967 (1986); Civil Code Section 2338. This could include situations where the employer provides alcohol to the employee.

Note initially that the act of becoming intoxicated is not enough to take the employee's conduct outside the scope of employment. Thus, liability will generally attach to the employer where an employee is intoxicated while performing job duties and injures another. See, e.g., Ingle v. Bay Cities Transit Co., 72 Cal. App. 2d 283 (1945) (intoxicated bus driver injures the plaintiff while driving his route).

But what about situations where the employee is not working at the time of the injury? And what is the effect if the employer provided the alcohol? Does server immunity trump respondeat superior liability?

The law is now well established that an employer may be held liable where the employee becomes intoxicated while engaged in work-related activities. See, e.g., Purton v. Marriott International Inc., 218 Cal. App. 5th 499 (2013) (intoxicated worker returns home from work party but then leaves home injuring plaintiff in an auto accident); Harris v. Trojan Fireworks Company, 120 Cal. App. 3d 157 (1981) (intoxicated employee-driver causes death while driving home from a company Christmas party); Boynton v. McKales, 139 Cal. App. 2d 777 (1956) (intoxicated employee-driver injures plaintiff while returning home from a work banquet). Further, the employer may be held liable even when the employer is not directly involved with the drinking-activity and it does not directly advance the employer's business enterprise See, e.g., Childers v. Shasta Livestock Auction Yard, Inc., 190 Cal. App. 3d 792 (1987) (employer liable for the actions of its off-duty employees when the employer provided alcohol and permitted the employees to drink at the workplace after hours).

The key in these cases is the connection between the drinking and the employment. Employer liability will depend on the specific facts of the case. Just remember that courts will interpret respondeat superior liability "broadly." Farmers Insurance Group v. County of Santa Clara, 11 Cal. 4th 992, 1004 (1995) Further, "[t]he question of scope of employment is ordinarily one of fact for the jury to determine." Mary M. v. City of Los Angeles, 54 Cal. 3d 202, 221 (1994). Importantly, server immunity will not override respondeat superior liability.

"Special Relationship" Liability

Another scenario where liability may be imposed on the server of alcohol is when there is a "special relationship" between the plaintiff and the server.

For example, it is well settled that a business owner has a duty to take reasonable measures to protect patrons from reasonably foreseeable third-party assaults. See Delgado v. Trax Bar & Grill, 36 Cal. App. 4th 224 (2005) (bar owner potentially liable for assault on patron in parking lot). This duty applies even when serving alcohol is a link in the chain of causation. See Cantwell v. Peppermill, Inc., 25 Cal. App. 4th 1797, 1802 (1994) ("A license to sell alcoholic beverages does not confer a grant of immunity to the innkeeper who permits the premises to be used as an arena for aggressive tortfeasors [Citations]."); Saatzer v. Smith, 122 Cal. App. 3d 512, 518 (1981) ("[T]he proprietor of a place where intoxicating liquors are dispensed owes a duty of exercising reasonable care to protect his patrons from injury at the hands of fellow guests. [Citations]."); accord Gray v. Kircher, 193 Cal. App. 3d 1069, 1073 (1987). Again, server immunity will not override "special relationship" liability.

Conclusion

California law has changed dramatically over the years with respect to imposing liability on those who serve alcohol. Currently, server liability is dictated almost exclusively by statute. For any entity required to be licensed, liability will only attach where the server provided alcohol to an "obviously intoxicated minor." B&P 25602.1. Thus, bars and restaurants can serve unlimited alcohol to adults or minors who are not "obviously intoxicated" without fear of liability. "Private hosts" (i.e., those not required to be licensed) are also generally immune from liability. They can only be held liable in two scenarios: (1) selling alcohol to an obviously intoxicate minor (per B&P Section 25602.1), or (2) "knowingly furnish[ing] alcoholic beverages at his or her residence to a person whom he or she knows, or should have known, to be under 21 years of age." Civil Code 1714(d) (emphasis added). Like a bar owner, a private host can serve any amount of alcohol to another adult without civil repercussions. With regard to minors, a private host will only be liable for either selling alcohol to an obviously intoxicated minor or "furnishing" alcohol to a minor (obviously intoxicated or not) in the adult's own home. Lastly, while statutory immunity will protect most servers from liability, it will not override common law liability separate from any liability associated with serving alcohol such as respondeat superior liability and liability based on a "special relationship" between the plaintiff and the defendant. 

Lars Johnson was a litigator for 20 years before joining Signature Resolution as a full-time mediator. He has extensive experience handling high-stakes catastrophic injury and wrongful death cases, as well as insurance coverage disputes.

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