Don’t Forget to Blame Your Bartender:
The Uncertain Future of Dram Shop Liability
By Ryan Kaufman, Esq.
On a Friday night after a long week on the job, Joe heads to the local bar to unwind with some drinks. After downing a few, he realizes he’s becoming a little tipsy. Joe keeps drinking despite his awareness that he’ll soon be driving home. Although somewhat inebriated, Joe does not stand out from the crowd and simply appears to be having a good time with friends. The bar is crowded and the music is blasting. The bartender is preoccupied with customers as he prepares drinks, keeps track of tabs, monitors inventory, and takes food orders. Joe is not being rowdy or disruptive. As he orders his final drink, it is almost impossible for the bartender to gauge his level of intoxication. Once he’s had his fill, Joe calmly leaves the bar and gets behind the wheel of his car.
There are countless scenarios of what could happen next. But perhaps the most troubling and all-to-common is that Joe loses control of his car and causes an accident, resulting in the death of a third party. In most states, the victim’s estate is able to bring a civil action seeking damages against the establishment that served Joe alcohol. Maryland, however, has historically been in the minority as one of the few states that refuses to impose this type of “dram shop” liability. But this might very soon be changing as the case of Warr, et al. v. JMGM Group, LLC, currently before the Court of Special Appeals, has the potential to turn more than 60 years of established judicial precedent on its head.
Dram Shop Liability
Dram shop laws make it possible for bar owners to be held financially liable if a customer becomes intoxicated on their premises and subsequently causes property damage or injuries to a third party, most typically through drunk driving. States began enacting these laws at the turn of the last century because the common law did not recognize this type of third party liability and over 90 years ago, the U.S. Supreme Court held that states are authorized to do so under their broad police powers to regulate the traffic of intoxicating liquors. See Eigner v. Garrity, 246 U.S. 97, 103-04 (1918). Currently 42 states and the District of Columbia permit, either by statute or court decision, individuals injured by intoxicated persons to seek damages from the bar or restaurant that served the intoxicated person.
A majority of these states allow for recovery when the defendant-establishment knew (or should have known) that the customer was “intoxicated” or “visibly intoxicated” – a difficult test to apply. For instance, in the District of Columbia a tavern keepers’ standard of care is governed by D.C. Code § 25-781 which prohibits the sale or delivery of alcoholic beverages to “[a]n intoxicated person, or any person who appears to be intoxicated.” See Rong Yao Zhou v. Jennifer Mall Rest., Inc., 534 A.2d 1268, 1272 (D.C. 1987). In Pennsylvania, the holder of a liquor license can be held liable if they serve alcohol to a “visibly intoxicated” individual who later inflicts damages on an innocent third party. See Pa. Cons. Stat. Ann. Tit. 47, §§ 4-493(1), 4-497; see also Johnson v. Harris, 615 A.2d 771, 775 (Pa. Super. Ct. 1992). Despite the public safety purpose of these laws, eight states (including Maryland) have remained true to the common law notion that there should be no third party liability for the actions of intoxicated patrons and the harm they cause. How long this remains the case in Maryland, however, is unclear.
Maryland Judicial Decisions and Dram Shop Liability
For more than 60 years, Maryland courts have flirted with the idea of dram shop liability but have ultimately refused to impose it. In 1951, the case of State v. Hatfield involved a situation where a minor became intoxicated at a tavern and was involved in an accident while driving home, killing another motorist. See 78 Md. 249 (1951). The victim’s family filed suit against the tavern but the Baltimore City Circuit Court dismissed the action, stating that the proximate cause of the accident was the driver’s negligence and not the tavern’s sale of alcohol. Id. at 755. The Maryland Court of Appeals affirmed, holding that “the common law knows no right of action against a seller of intoxicating liquors . . . for ‘causing’ intoxication of the person whose negligent or willful wrong has caused injury. Human beings, drunk or sober, are responsible for their own torts.” Id. at 756.
Thirty years later the Court of Appeals was presented with a virtually identical scenario in Felder v. Butler. There, an individual was involved in a car accident after consuming alcohol at a local bar. 292 Md. 174, 175 (1981). The severely injured victims of the accident filed suit against the establishment, alleging that it negligently sold liquor to the driver while she was visibly intoxicated. Id. Relying on Hatfield, the Charles County Circuit Court dismissed the action. Id. at 176. On appeal, the Court of Appeals acknowledged the growth in the number of jurisdictions that had enacted dram shop laws but declined to jump on the bandwagon, deferring to the General Assembly and noting that “the declaration of public policy is normally the function of the legislative branch of government.” Id. at 184.
In 2000, appellate courts were once again presented with an opportunity to create dram shop liability in Maryland. In Wright v. Sue & Charles, Inc. a minor purchased alcohol at a local liquor store and was involved in a fatal car accident after becoming intoxicated. 131 Md. App. 466, 469 (2000). The wrongful death action brought by the minor’s parents against the liquor store was dismissed by the trial court, which relied on Hatfield and Felter to find that “the law in Maryland has been fairly well established for a considerable period of time concerning liability in situations like this.” Id. at 470. The Maryland Court of Special Appeals affirmed, stating that “[t]he law is Maryland is . . . clear and unambiguous. The [parents] cannot maintain an action against [the liquor store and its owners] for the death of their son because he voluntarily consumed alcohol and voluntarily got behind the wheel of a vehicle. As Hatfield made clear, the responsibility rests on the individual who chooses to drink and not on the liquor store that sells.” Id. at 476. The court also reiterated that “if any change in the status of the law [is] to come about, it should properly be done by the Legislature and not by the courts.” Id. at 474. Taking the hint, members of the Maryland General Assembly have made recent attempts to change the law regarding dram shop liability.
Maryland General Assembly and Dram Shop Liability
On February 11, 2011 Delegates Kathleen Dumais (D-Dist. 15) and Luiz Simmons (D-Dist. 17) introduced House Bill 1120 which would hold alcohol vendors liable if clear and convincing evidence shows that damage was proximately caused by the vendor’s service of alcohol to underage or “visibly intoxicated” patrons. See H.B. 1120, Gen. Assemb., Reg. Sess. (Md. 2011). H.B. 1120 was received at a hearing in the House Judiciary Committee but no further action was taken.
Almost one year to the day after H.B. 1120 was introduced, Del. Dumais and Del. Simmons made another attempt to create dram shop liability in Maryland when they introduced House Bill 1000. This bill, identical to H.B. 1120, similarly fizzled after a hearing in the House Judicial Committee. See H.B. 1000, Gen. Assemb., Reg. Sess. (Md. 2012).
Despite these attempts to create dram shop liability in Maryland, the General Assembly seems reluctant to take action that would overturn such a long and established line of judicial precedent. Instead, it seems content to sit on its hands and wait for the judiciary to act. Although it has been hesitant to do so in the past, the case of Warr, et al. v. JMGM Group, LLC provides Maryland appellate courts with an ideal opportunity to change the law and establish dram shop liability in Maryland.
Warr, et al. v. JMGM Group, LLC (d/b/a Dogfish Head Alehouse)
The case of Warr, et al. v. JMGM Group, LLC (d/b/a Dogfish Head Alehouse) (Montgomery County Circuit Court, Case No. 341698-V) could be the tipping point for dram shop liability in Maryland. Plaintiffs allege that Michael Eaton spent approximately six hours at Dogfish Head Alehouse in Gaithersburg during which time he purchased 20 alcoholic beverages. Roughly an hour after leaving the bar, Eaton, whose Virginia license had been suspended, was driving nearly 90 MPH on southbound I-270 when he crashed into the back of Reverend William Warr’s vehicle.
Warr’s 10-year-old granddaughter, Jazimen, sustained fatal injuries from the accident. In an effort to hold the bar responsible, Warr sued JMGM Group, LLC for $2 million in medical, burial and funeral expenses. In addition, Warr sought $1.25 million for the bodily injuries, pain, suffering and continued medical expenses of himself, his wife, and Jazimen’s half-sister, all of whom sustained non-life threatening injuries in the crash.
This case deserves close attention as trial judge Eric M. Johnson refused to follow the deeply rooted line of Maryland precedent when he denied JMGM’s motion to dismiss. In an April 28, 2011 opinion, Hon. Judge Johnson acknowledged that Maryland law does not recognize dram shop liability but nonetheless stated that “[t]he facts of this case undoubtedly should serve as the impetus to adjusting Maryland jurisprudence on the topic of dram shop liability.”
Despite this gutsy ruling, summary judgment was granted in JMGM’s favor on January 20, 2012 – likely because Judge Johnson was hesitant to change the law at the trial court level. Indeed, his opinion noted that Maryland’s appellate courts should consider this case a golden opportunity to change the law. The Warrs appealed this decision and hearings will be held at the Court of Special Appeals in Fall 2012.
Whether the CSA will agree that Maryland law is ripe for a change is debatable. Regardless, given the recent legislative activity and Judge Johnson’s treatment on the Warr case, it appears that the tide may be slowly shifting in favor of dram shop liability in Maryland. As such, Maryland business owners who operate hospitality establishments, and insurance companies which provide hospitality coverage, should be closely watching Warr, et al. v. JMGM Group LLC because it has the potential to greatly impact their operations going forward.
Ryan Kaufman maintains a general civil litigation practice, including the defense of dram shop actions, at Silverman Thompson Slutkin & White, LLC in Baltimore, Maryland. He can be reached at (410) 385-2225 or at email@example.com.