Third-Party Liability for Serving Alcohol: Dram Shop and Social Host Laws

See how an injured victim can pursue a bar or party host who served alcohol to someone who causes an accident.

Drunk driving accidents are responsible for 29 deaths every day on American roadways.¹ Alcohol is the main cause for more than half of all non-fatal injuries, on and off the road. ²

The intoxicated individual is obviously the person most responsible for the harm they’ve caused to you or a loved one. However, you might also have the right to seek compensation from the individual or business that served them alcohol.

Here we review the laws that place third-party liability on the host who serves alcohol, whether at a bar, party, or private residence.

What are Dram Shop Laws?

Bars, taverns, clubs, or other establishments that serve alcohol are some of the most common places where people drink.

Long ago, businesses served alcohol in small amounts measured as drams. Alcohol vendors were called dram shops. Dram shop liability refers to the area of law that makes businesses responsible for the acts of their drunken patrons.

States with dram shop laws impose liability on an establishment if it provided alcohol to a customer to the point of intoxication, and the customer later caused an accident and injured someone.

The original reason for dram shop laws had to do with insurance. A bar’s business insurance policy couldn’t always cover all the damages caused by an intoxicated customer. Dram shop liability laws helped victims recover more compensation from the bar or club.

Currently, 42 states and the District of Columbia have some type of dram shop law in effect.

Jurisdictions that don’t have dram shop laws include:

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

The extent to which an establishment is held liable depends on its location.

State dram shop laws differ when it comes to:

  • The legal standard for liability
  • Liability limits
  • Notice requirements

The Legal Standard for Liability

Generally, negligence is the legal standard used to determine liability in dram shop cases. This means an injured party must prove that the establishment or the person who served the alcohol either knew or should’ve known that the patron was drunk.

Sometimes states award additional damages to a victim if they can show that the person who served the alcohol was reckless. When it comes to dram shop liability, reckless means the person continued to serve alcohol despite knowing that the act created a risk of harm.

Penalties for Dram Shop Violations

Some states’ dram shop laws put limitations on what makes a business responsible and how much they have to pay in compensation.

States like California say that a bar is only accountable for injuries if the person who caused the accident was underage.

California Business & Professions Code section 25602.1 states:

“…a cause of action may be brought by or on behalf of any person who has suffered injury or death against any person licensed, or required to be licensed, pursuant to Section 23300, or any person authorized by the federal government to sell alcoholic beverages on a military base or other federal enclave, who sells, furnishes, gives or causes to be sold, furnished or given away any alcoholic beverage, and any other person who sells, or causes to be sold, any alcoholic beverage, to any obviously intoxicated minor where the furnishing, sale or giving of that beverage to the minor is the proximate cause of the personal injury or death sustained by that person.”

Some states require businesses that serve alcohol to have specific liquor liability coverage.

For example, Massachusetts requires:

“No license shall be issued or renewed under this section until the applicant or licensee provides proof of coverage under a liquor legal liability insurance policy for bodily injury or death for a minimum amount of $250,000 on account of injury to or death of 1 person, and $500,000 on account of any 1 accident resulting in injury to or death of more than 1 person.”

Caps on Personal Injury Damage Awards

State laws setting damage caps for personal injury lawsuits might also apply to dram shop cases. Damage caps mean that even if an establishment is liable for injuries caused by a drunk patron, there is a limit to the amount the victim can recover.

Other states, like Texas, allow juries to award damages without limits in certain cases.

Case Example: $301 Billion Dram Shop Jury Award 

Tamra Kindred and her 16-year old granddaughter were killed when a drunk driver, Joshua Debosque slammed into Kindred’s vehicle while running a red light at 91 miles per hour. Debosque had been drinking at the Beer Belly Sports Bar before the crash.

Kindred’s daughters filed a lawsuit against the Beer Belly, alleging that Debosque, who also died, had been served “a dangerous amount of alcohol” at the bar.

A Texas jury agreed, awarding more than $301 billion to the grieving family, allocated as $1.04 billion in compensatory damages, and $300 billion in punitive damages.

The family will likely not see a cent of the award. The at-fault bar did not carry liability insurance and went out of business before the case went to trial. 

Social Host Laws and Penalties

Social host liability laws hold the person hosting a gathering accountable for damages caused by their intoxicated guests.

Depending on the state, when a party guest becomes intoxicated and then injures someone else, the victim may have a right to seek compensation from the person who hosted the party.

Though similar to dram shop laws, social host laws differ in that a person doesn’t have to sell alcohol to a person to assume responsibility for an accident. The law holds accountable the person who gave or provided alcohol to a guest, to the point of intoxication, when the guest injures a third party.

While most states have dram shop laws, not all states have social host liability laws.

Who Can Be Held Liable?

Social host liability laws usually pertain to homeowners, renters, or anyone who provides alcohol to a guest who gets drunk and harms someone else.

These laws do not require that the host was throwing a party. For example, it’s enough if a person has a small get-together and gives too much wine to a friend.

It’s important to know that most states only impose social host liability laws when a host provides alcohol to someone under 21, the legal drinking age.

See this case example of a teen car accident after being served alcohol.

Who Can Bring a Claim?

Generally speaking, in states that have social host liability laws, anyone who was injured by a drunken guest can bring a personal injury claim against the person who hosted the event.

Some states make a distinction between first-party social host liability cases and third-party cases.

First-party social host liability cases are when the injured victim is the same person who was given the alcoholic beverages. Most states don’t allow first-party claims unless the intoxicated person was a minor at the time of the injury.

A 32-year-old who gets drunk at a party and wraps his car around a tree on the way home may not be able to legally blame the party host for his injuries.

Third-party social host liability cases are when the injured plaintiff is someone other than the person who was given the alcoholic beverages.

A typical third-party case arises when someone leaves a party intoxicated, gets behind the wheel, and gets in a car accident that injures another person.

Proving Social Host Liability

While alcohol-related car accident claims require proving the drunk driver’s negligence, social host liability cases are not always based on the same standards.

While they can be based on negligence, social host liability cases can also be based on the host’s recklessness or intentional conduct, depending on the specific state law.

Recklessness occurs when someone is aware of a substantial risk that something unsafe will happen but consciously ignores it and commits an act anyway.

Under social host liability standards, a reckless host keeps giving a guest drink after drink, despite knowing that the guest is already intoxicated.

Intentional Conduct occurs when the host acted with some type of intent or knowledge. Most cases in this area turn on whether a host knew that a guest was under 21.

States are divided on the underage knowledge requirement. Some states say that blame is only imposed if a host actually did know that a guest was under 21, and still served that guest alcohol. Other states say that a host is liable if they should have known the guest was underage.

The Crime of Furnishing Alcohol to a Minor

Aside from limited special circumstances, like religious services, it’s always a crime to supply alcohol to individuals who are underage.

Underage drinking exceptions only apply when the alcohol is consumed in the presence of an adult, guardian, or spouse, who gives the underage individual permission to do so.

Since states differ, it’s essential to know what your jurisdiction allows.

Tribal lands are outside federal government jurisdiction. There are no federal laws regarding the minimum drinking age on Native American reservations since they are considered independent and self-governing entities.

How the Law Defines Supplying Alcohol to Minors

While there are a variety of ways in which a person can supply alcohol to a minor, many people are not aware of them all.

Many people don’t know that in most states, “supplying” alcohol to a minor includes having it in your home without blocking access to it.

In other words, an adult does not even have to be physically present to be charged with supplying alcohol to an underage person.

Let’s say your 19-year old college student is allowed to host a party while you’re gone. An underage guest helps himself to your liquor cabinet, then gets in a drunk-driving crash that kills someone. You may be liable for criminal charges and civil wrongful death damages.

In situations where a parent or adult was unaware that alcohol was available to minors, criminal laws may not be enforced, but you can still be sued in civil court.

Penalties for Providing Alcohol to Minors

You can face criminal charges if you supply alcohol to minors. You can be charged with either a misdemeanor or a felony, depending upon the specific facts of the case.

Most often, though, supplying alcohol to a minor is charged as a misdemeanor.

Misdemeanor alcohol charges are punishable by:

  • Jail time for up to a year
  • Fines up to $5,000 in some situations and states

When supplying alcohol to a minor is charged as a felony, it’s often because:

  • There has been an accident or injury associated with the use of alcohol; or
  • The individual who supplied it was convicted of the same crime multiple times

Felony charges are punishable by:

  • Jail time for at least a year
  • Fines of up to tens of thousands of dollars

Individuals who are convicted of supplying or serving alcohol to minors are usually placed on probation and may have to complete community service.

Liquor stores and other businesses convicted of supplying alcohol to minors often face criminal fines and liquor license suspension or revocation. The owners and employees of such businesses are also open to personal injury lawsuits in civil court.

You Deserve Full Compensation for Your Injuries

Whether you or a loved one were injured in an alcohol-related accident or a bar fight, your attorney can determine if the establishment that served the person who hurt you is liable for your damages.

Don’t Let the Clock Run Out

Injury claims are subject to your state’s statute of limitations. If you fail to settle your claim or file a lawsuit within the statutory time frame, you lose your right to seek compensation.

Dram shop liability laws can have very short deadlines. States like Connecticut require injury victims to notify the business if they are considering filing a legal action under the state’s dram shop laws. The notice deadline can be as short as 30 – 60 days from the date of the accident, or as long as two years.

Don’t wait to consult a local personal injury lawyer to preserve your right to pursue civil liability for alcohol-related damages.

An attorney can evaluate the facts of your case to determine applicable laws that will help your claim. Your attorney will identify all sources of potential compensation and ensure that your claim or lawsuit is properly filed before any deadlines.

Defenses to Dram Shop Laws

When a victim files a lawsuit under state dram shop laws, lawyers representing the establishment being sued will defend the business by arguing that the business wasn’t to blame for the actions of the intoxicated patron.

Common defense arguments include:

  • The patron showed no evidence of intoxication
  • Nonalcoholic beverages were available
  • The establishment encouraged the customer to use a taxi or rideshare service

A skilled personal injury attorney will handle all interactions with the insurance companies, and any corporate defense lawyers.

Most injury attorneys offer free consultations for accident victims, and many will take your case on a contingency fee basis. You won’t have to pay any legal fees until your case is settled or you win an award in court.

Dustin Reichard, Esq. is an experienced attorney with 20 years of work in the legal field. He’s admitted to the Illinois State Bar and the Washington State Bar. Dustin has worked in the areas of medical malpractice, wrongful death, product liability, slip and falls, and general liability. Dustin began his legal career as a JAG... Read More >>