Alcoholic Beverage Law and Hospitality Law: Merry Times and Safe Travels

Vol. 30 No. 6

By

Reshard J. Alexander (rja@rjalexanderlaw.com), Esq., MBA, LL.M., is the managing member of RJ Alexander Law PLLC (rjalexanderlaw.com), in Houston, Texas. He has represented various clients in the alcoholic beverage industry as both general counsel and in litigation.

“Welcome to the Texas’ Spurs bar, home of the all-you-can-eat crawfish tails and the 24-ounce margarita, where the women and men are hot and the drinks are cold. Tonight’s specials are two-for-one boneless buffalo wings, half-price pitchers of the local Armadillo craft beer, $8.95 for a bucket of beer, $5 for Jameson drinks, $8 for doubles, and white wines available by the glass!”

Whether you are an owner of a nightclub, bar, or restaurant or are simply throwing a party for a few friends at your home (or your law office) during the holiday season, this time of the year is a very exciting period for entertaining patrons and house guests. Of course, a great deal of responsibility comes with the service of alcohol to persons in your business establishment and sometimes even in your home. Irresponsible serving of alcohol can lead to loss of community reputation, hikes in insurance coverage, lawsuits, catastrophic multiple injuries, and in some cases even death.

Dram Shop Liability

A dram shop generally refers to any bar, nightclub, tavern, brewpub, or business where alcoholic beverages are sold. The word “dram” in dram shop refers to a small amount of liquid and is a word with roots in Greco-Roman days. In today’s society, “dram shop acts” create a cause of action that allows an injured party to successfully sue a provider of alcoholic beverages if, at the time the injury occurred, it was apparent to the alcohol provider that the person receiving the alcoholic beverage was already intoxicated to the point that he/she presented a clear danger to him/herself and others. The intoxicated person must also have a proximate cause (legally recognizable injury) of the suffered damages.

In some states the dram shop act contains a safe-harbor provision that allows alcoholic beverage providers an escape clause from liability. In Texas, for example, the safe-harbor provision requires the provider to attend (and make employees attend) an alcoholic beverage seller/server training course licensed by the Texas Alcoholic Beverage Commission (TABC). This attendance of the TABC seller/server course grants the provider a shield from the employee’s actions as long as the employer has not directly or indirectly encouraged the employee to violate the law regarding serving alcohol to patrons. Criminal and civil liabilities lie at the footsteps of the establishment that does not respect the law. These liabilities can range from liquor license revocation, medical expenses for the injured, harsh fines from the state alcoholic beverage commission, and even jail time.

Serving Alcohol at Home

For the most part, social hosts (those serving alcohol in the privacy of their own home) are not burdened with the common law duty of curtailing alcoholic beverage service to guests in their homes. Courts generally recognize that such hosts do not have the requisite skill and knowledge to determine when their guests have drunk too much alcohol. However, courts have recognized that social hosts are responsible for not allowing minors (persons under the age of 21) to consume alcohol and have held social hosts liable for damages inflicted by minors who obtained alcohol this way.

Serving Alcohol at a Place of Business

There are several problems that may arise when serving alcohol in your place of business:

Alcohol content. You may not be fully aware of the varying degrees of alcohol content in the beverages you are serving: the standard alcohol content for a 12-ounce serving of craft beer, five-ounce glass of wine, and 1.5-ounce shot of distilled spirits are all the same, meaning drinking any of the above produces the same results as the others. Whether you are a newly minted bar owner or a seasoned veteran, it is important to understand that you are expected to operate within the parameters of your state’s alcoholic beverage code at all times. Your state’s alcoholic beverage commission will not show you sympathy if you over-serve a patron.

Alcohol flavors and ingredients. Alcoholic beverages have become more complex in taste owing to multiple ingredients—ingredients to which your guests may have undisclosed allergies. And accidents can occur when bartenders try to experiment with cocktails outside their acumen. Did you hear about the young lady who had her stomach removed after drinking an ingredient that is supposed to make cocktails smoke? Depending on the jurisdiction, you may be held liable for any injuries suffered by the guests.

Security. People become clumsier and their motor skills fall off a cliff as they drink more. Their hand-eye coordination—along with their inhibitions—plummet after they have tossed back a few shots of the local distilled spirits. So . . . that door that is barely hanging on by the top hinge, that loose floorboard that you have been meaning to fix, and those rickety stairs that your foot might put a hole through any day now need to be fixed as soon as possible to prevent a possible injury to a guest.

Avoiding Potential Lawsuits and Injuries

So what can you do to avoid the potential problems caused when serving alcohol to your guests—whether at home or at a place of business? Below are seven tips to consider:

  1. Get a professional involved. Hire a food and beverage company to cater the event. Oftentimes, the catering company is required by city and/or county laws to obtain permits to serve alcohol. These permits generally ensure that the caterers operate within the realm of reasonable service to guests and deny alcohol service to guests who have requested too many drinks in too short a time period or are exhibiting signs of intoxication. Additionally, because the catering service is a business, the owners or servers of the business are likely to feel less pressure in turning away an intoxicated guest from the bar.
  2. Create a designated-driver program. If you are inviting family members or co-workers to your event, make sure that everyone has come to the party with someone who has abstained from drinking.
  3. Keep track of the alcohol. Maintain a record of alcohol sold at each daily event and what vendor you bought your alcoholic beverages from. Nothing is worse than having agents from the state alcoholic beverage commission raid your bar in the middle of an event and shut it down owing to outstanding state taxes or poor record keeping.
  4. Set up a coat check/key check. Have all guests deposit their keys with you at the door of the event. You can place them in a safe deposit box or a secure area that only you can enter. Give them a ticket to redeem their keys or a password that only they would know. This will prevent people from leaving the party intoxicated without your knowledge—and may prevent a potential lawsuit.
  5. Maintain level headedness. You are the conductor of the party, not the life of it. Don’t drink at your party. Bartenders do not drink on the job; if you are hosting a party, neither should you. The point of throwing an event is to entertain your guests and ensure that they have as much fun as possible. Not to get wasted.
  6. Put water out in plain sight. Have a ton of water available for people to moderate their alcohol consumption. People in nightclubs are often concerned with their image. They may feel that they are not being cool in front of their friends if they drink water. Offer it to people who look like they may be experiencing signs of severe inebriation. You will be amazed at how often someone will gladly drink some water to help mellow out the alcohol in their system if you simply ask them, “would you like some water?”
  7. Remember: Kids and alcohol do not mix. Make sure the kids are nowhere near the booze. Generally speaking, courts have zero tolerance for those under the age of 21 consuming alcohol and then driving a motor vehicle. If Little Timmy decides to take a spin in Dad’s truck and rear-ends someone after stealing away a few bottles of Mom’s wine coolers, he may not be the only one in trouble. The police will want to know where the alcohol involved in the accident was purchased and consumed.

DWI

Generally speaking, a person is guilty of driving while intoxicated (DWI) when operating a motor vehicle in a public place and under a state of intoxication. Intoxication is typically defined as not having the normal use of mental or physical faculties by reason of the introduction of alcohol to the point where the alcohol concentration within the bloodstream is equal to or greater than 0.08 percent. A DWI conviction can have serious repercussions affecting the rest of your life. It is imperative to call a cab or have someone drive you home rather than risk losing your license and spending time in jail. Additionally, always remember that a blood test is more accurate than a breath test when attempting to discover how much alcohol a person has consumed, and a blood test will also detect the presence of other controlled substances such as marijuana and cocaine; a breath test will not.

Last Call

“This is the last call for alcohol! At two o’clock the bar closes; you have ten minutes to get to the bar and buy a drink. I repeat, this is the last call for alcohol!”

This scene is a teachable moment for business owners as well as partygoers. If you have hired a professional vendor to serve drinks, you should always ensure that your bar staff is not simply attempting to sell as much alcohol as the crowd will purchase when they rush to the bar for that last drink because there are likely a number of intoxicated people hoping to buy a few more drinks before the event/bar/club closes. When police arrest someone who is suspected of driving while intoxicated, the person often claims that they had only one or two beers. If they drink a ton of alcohol right before leaving the event and get into an accident that injures someone, it is highly likely that the club owners will find themselves involved in the lawsuit as well.

I hate to sound like a worry wart during one of the most festive times of the year. I’m sure we all are looking for reasons to celebrate with family and friends. Just make sure that you think about the safety of your guests and make sure everyone gets home in one piece from your holiday events so that you can party hard next year as well.

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