Liquor Liability

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Liquor Liability in California

Liability for Serving Alcohol to a Drunken Driver

By Brian Kabateck and Douglas Rochen. They are partners at Kabateck Brown Kellner in Los Angeles. They represent plaintiffs in a variety of civil litigation, including catastrophic-injury cases.

When a drunken driver is involved in an auto accident and someone dies, is the person who furnished alcoholic beverages to the driver liable? It depends.

Over the years, California has had a legal wrestling match with this very issue. Appellate courts, as well as the Legislature, have struggled to define when the provider of alcoholic beverages—in particular, a person who provides those beverages to an obviously intoxicated person—is liable for the injuries that result.

Governing Statutes

The California Constitution grants exclusive power to the state to regulate the sale of alcoholic beverages. (Cal. Const., Art. XX, § 22.) The Legislature has exercised that power by the enactment of the Alcoholic Beverage Control (ABC) Act (Cal. Bus. & Prof. Code §§ 23000–25762.) The ABC Act expressly provides that its terms should be liberally construed to accomplish the stated statutory purposes, which include “to eliminate the evils of unlicensed … selling, and disposing of alcoholic beverages, and to promote temperance in the use and consumption of alcoholic beverages.” (Cal. Bus. & Prof. Code § 23001.) The ABC Act also sets forth grounds for holding persons criminally liable for providing alcohol to minors regardless of their state of inebriation.

The act specifically states that it is a misdemeanor to provide alcoholic beverages to a person under 21 years of age. (Cal. Bus. & Prof. Code § 25658(a).) It’s also a misdemeanor for a minor to purchase alcoholic beverages or consume liquor at an “on sale” premises, such as restaurants and bars. (§ 25658(b).) Furthermore, the law makes it a separate misdemeanor to provide alcoholic beverages to a person under 21 who then consumes those beverages and proximately causes great bodily injury or death to himself, herself, or any other person. (Cal. Bus. & Prof. Code § 25658 (c).)

But what the code provides, it can also take away. A provider of alcoholic beverages has immunity from civil liability in the absence of an affirmative act furnishing alcohol to an obviously intoxicated minor. (See Cal. Bus. & Prof. Code § 26502.) This immunity exists despite the argument that furnishing liquor to a minor makes it reasonably foreseeable that inebriation will result and someone will likely be injured as a consequence of that inebriation.

Historical Perspective

The law hasn’t always been this way. A generation ago, the traditional rule was that a seller of alcoholic beverages would enjoy legal immunity for harm caused by a drunken customer. The prevailing theory held that it was the customer’s voluntary consumption that directly caused the harm. (Cole v. Rush, 45 Cal. 2d 345 (1955).) The Legislature concurred with the case law decisions by declining to enact a law that would permit civil liability in such circumstances. (See Cole, 45 Cal. 2d at 355.) But that rule didn’t last, at least in terms of the common law approach to the problem of drunken drivers.

In 1971 the California Supreme Court rejected the traditional approach when it observed that “this rule is patently unsound and totally inconsistent with the principles of proximate cause established in other areas of negligence law.” The court concluded that a duty of care was owed to the public for the sale of any alcoholic beverage to an obviously intoxicated person. (Vesely v. Sager, 5 Cal. 3d 153, 165–66 (1971).) The Vesely case involved a bartender who served an “obviously intoxicated” customer who later was involved in a car accident.

Five years after the Vesely decision, the state high court broadened the scope of potential liability by applying the Vesely rule in a case in which the liquor was furnished out of state (in Nevada), but the subsequent auto accident occurred in California. (See Bernhard v. Harrah’s Club, 16 Cal. 3d 313 (1976).) The court made clear in Bernhard that it was establishing a common law rule based on the ancient maxim embedded in the Civil Code, namely that “[e]veryone is responsible … for an injury occasioned … by his or her want of ordinary care …” (Bernhard, 16 Cal. 3d at 324; see also Cal. Civ. Code § 1714(a).)

But the court didn’t stop there; it soon extended liability to noncommercial “social hosts,” stating that someone who gives alcohol to an obviously intoxicated guest at a party or gathering knowing that the person intends to drive a vehicle while in an intoxicated state fails to act with reasonable care. (Coulter v. Superior Court, 21 Cal. 3d 144, 153–155 (1978).)

Legislative Response

However, the decisions in Vesely, Bernhard, and Coulter did not sit well with the Legislature, which amended the state’s general negligence statute (Civil Code § 1714, cited above) to reverse the judicial extension of liability. The amendment reinstated the prior rule—created by judicial analysis in cases such as Cole v. Rush, as already noted—that furnishing alcoholic beverages is not the proximate cause of injuries resulting from intoxication. (See Civil Code § 1714(c).)

In addition, the Legislature modified the Business and Professions Code to include new language that reinstated civil liability immunity for a commercial establishment that “sells, furnishes or gives” alcoholic beverages to an obviously inebriated person who then causes injury to themselves or third parties. (Cal. Bus. & Prof. Code § 25602.1.) By its express terms, the new provision granted immunity to licensed providers of alcoholic beverages who furnished alcohol to obviously intoxicated adults, as well as sober minors. It did not, however, extend liability to purely social hosts. (See Cory v. Shierloh, 29 Cal. 3d 430, 440 (1981).)

Further revisions to the code in 1986 broadened the statute to include licensed sellers (and those sellers without licenses who are required by law to be licensed) who provide alcohol to an obviously intoxicated minor. But once again, the Legislature chose not to include social hosts who merely furnish alcohol. (See Ennabe v. Manosa, 58 Cal. 4th 697, at 709.)

Fast forward to 2011, which was when the Legislature again amended the state’s general negligence statute (Cal. Civ. Code § 1714), this time to expressly permit claims against a “parent, guardian, or another adult” who “knowingly furnishes alcoholic beverages at his or her residence” to a person whom the provider knows, or should have known, is under 21 years of age and when the furnishing of the alcohol is the proximate cause of subsequent injury or death. (See Cal. Civ. Code § 1714(d).)

The state Supreme Court did not rule until 2014 that civil liability extends to social hosts who provide alcohol to obviously intoxicated minors when there is an affirmative “sale” of some sort. (See Ennabe, 58 Cal. 4th 697, 722.)

A key question lingers in this convoluted history: What constitutes the “furnishing” of liquor so as to trigger liability?

Judicial Interpretation

Last year the California Supreme Court confronted this very question. In the course of a detailed opinion that traces the history of the various statutory amendments and judicial decisions, the court noted that for social hosts liability exists under section 25602.1 if a person “sells” or “causes to be sold” alcohol to an obviously intoxicated minor. (See Ennabe, 58 Cal. 4th at 709–710.) Stated another way, a social host can retain immunity by simply refraining from charging invited guests for alcoholic drinks. (See Ennabe, 58 Cal. 4th at 722.)

California’s appellate courts also hold that social hosts are not liable for their failure to supervise individuals who drink alcohol at their events. One court noted that if the “failure to supervise” theory of liability was enough to circumvent the social host immunity statutes, “the immunity would be seriously eroded.” The duty of supervision, said the court, “is premised upon the need to look after those whose coordination and judgment have been adversely affected by the consumption of alcohol. If allowed, the duty would appear to exist in many if not most cases where alcohol is furnished by social hosts.” (Allen v. Liberman, 227 Cal. App. 4th 46, 55–56 (2014).)

The Allen court opined that immunity holds, for example, if a person fails to lock up the liquor cabinet at a residence to prevent minors from accessing alcohol in their home. (Allen, 227 Cal. App. 4th at 56.)

Affirmative Act

As previously observed, the key to establishing social host liability lies in the word furnish and the parallel phrase causes to be sold. Both seem to require at least some type of affirmative act. (See Ruiz v. Safeway, Inc., 209 Cal. App. 4th 1455, 1460 (2012); Sagadin v. Ripper, 175 Cal. App. 3d 1141, 1157 (1985).)

Accordingly, a person who has control over alcohol and who directs or explicitly authorizes another person to sell it to a clearly drunken minor will be held liable. However, if the person merely provides a room in which alcoholic beverages are sold or provided by others—for example, the owner of a rented vacation property where a party takes place—there is no liability. (See Allen, 227 Cal. App. 4th at 56; see also Leong v. San Francisco Parking, Inc., 235 Cal. App. 3d 827, 833–834 (1991).)

As the published cases indicate, the sale of alcoholic beverages by a social host can include a transaction in which an alcoholic beverage is passed on to another for “consideration.” In this context, consideration can include requiring a cover charge for an event. (See Ennabe, 58 Cal. 4th at 716–717.)

Even so, the concept of a sale of alcoholic beverages does not necessarily apply to every transaction or the entire chain of supply. For example, in one case there was no liability for a grocery store that sold alcohol to a minor who later died in a car crash. In that case, the parents of the minor driver who was killed alleged that a supermarket caused beer to be furnished when a checker sold beer to the minor driver’s companion. The checker asked for identification, and the friend provided a forged driver’s license and paid for a twelve-pack of beer. The friend then provided the alcohol to the driver, who got drunk and was killed in the ensuing traffic accident. (See Ruiz v. Safeway, Inc., 209 Cal. App. 4th 1455 (2012).)

The court in Ruiz concluded that the supermarket did not furnish the driver with beer because (1) the checker sold the beer to the driver’s companion and not the driver himself, and (2) nothing about the sale amounted to an affirmative act directly related to the driver, or an act that necessarily would have resulted in the companion’s furnishing or giving beer to the driver. (Ruiz, 209 Cal. App. 4th at 1461.)

The view expressed in the Ruiz decision that the term furnishing includes only transfers at the end of the supply chain to the person who actually causes the harm finds support in the statutory text, which uses the phrase “to an intoxicated person” when defining when a “furnisher” is liable. The statutory language suggests that the furnisher would have to have some knowledge of the recipient’s inebriation, thus implying at least some control over who receives alcoholic beverages.

Along the same line of reasoning, a court has held that a beverage manufacturer—separated from the ultimate consumer by a regional distributor and a local retail outlet—does not “furnish” the beverage to an inebriated consumer. (Fiorini v. City Brewing Co., LLC, 231 Cal. App. 4th 306, 318–25 (2014).)

More Than Nonfeasance Required

A related concept is that mere nonfeasance does not create liability. Thus the failure of university officials to stop a campus drinking party does not constitute the affirmative act of furnishing alcohol. (Baldwin v. Zoradi, 123 Cal. App. 3d 275, 289–290 (1981).) In addition, no liability exists for merely contributing to a common fund for the purchase of alcohol when the defendant never exercised any control over the alcohol. By the same token, the failure to protest or to attempt to stop another from drinking in one’s presence is not considered to be an affirmative act of furnishing alcohol. (See Calrow v. Appliance Industries, Inc., 49 Cal. App. 3d 556, 568–569 (1975).)

The Big Picture

Underage drinking is a risk that attracts many adolescents who are drawn to the adventure of trying alcohol without fully recognizing its effects on their health and behavior. In this context, the alcohol often is provided through family members or easy availability at home.

According to a July 2013 study by the National Institute on Alcohol Abuse and Alcoholism, approximately 5,000 people under age 21 die each year from alcohol-related car crashes, homicides, suicides, alcohol poisoning, and other alcohol-related injuries such as falls, burns, and drowning. The Center for Disease Control and Prevention recognizes that “reducing underage drinking will require community-based efforts to monitor the activities of youth and decrease youth access to alcohol.” The surgeon general has also issued a “call to action” to prevent underage drinking. Preventive strategies will require action on the national, state, and local levels: enforcing minimum legal drinking age laws, national media campaigns targeted at both youth and adults, increasing alcohol excise taxes, reducing youth exposure to alcohol advertising, and development of comprehensive community-based programs. (For more information, visit the pertinent websites: National Institute on Alcohol Abuse and Alcoholism; CDC; and the Surgeon General.)

In California, the basic premise of the ABC Act continues to resonate: “to promote temperance in the use and consumption of alcoholic beverages.”

Notwithstanding these statistics and the policy goals, broad civil immunity remains in place for commercial providers of alcohol, as well as for social hosts. The sole exception is for commercial purveyors who supply, and social hosts who sell, liquor to an already intoxicated minor.

More about Liquor Liability in California

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