Maj. Mark Willingham - Moderator / Panelist James F. Mosher JD – Panelist

1. Maj. Mark Willingham - Moderator / PanelistJames F. Mosher JD – Panelist Alcohol Server Liability The State of Play 20th Annual Legal Symposium on Alcohol Beverage Law & Regulation sponsored by the National Alcohol Beverage Control Association,March 13, 2013, Alexandria, VA

3. News Flash: Government to issue new alcohol warning labels that go beyond that required for tobacco

4. New Alcohol Warning Labels • The consumption of alcohol may create the illusion that you are  tougher, smarter, faster and better looking than most people.

5. New Alcohol Warning Labels • The consumption of alcohol may create the illusion that you are  tougher, smarter, faster and better looking than most people. • The consumption of alcohol may make you think you are whispering  when you are not.

6. New Alcohol Warning Labels • The consumption of alcohol may create the illusion that you are  tougher, smarter, faster and better looking than most people. • The consumption of alcohol may make you think you are whispering  when you are not. • The consumption of alcohol may cause you to think you can sing.

7. New Alcohol Warning Labels • The consumption of alcohol may create the illusion that you are  tougher, smarter, faster and better looking than most people. • The consumption of alcohol may make you think you are whispering  when you are not. • The consumption of alcohol may cause you to think you can sing. • The consumption of alcohol may cause you to tell your friends  over and over again that you love them.

8. New Alcohol Warning Labels • The consumption of alcohol may create the illusion that you are  tougher, smarter, faster and better looking than most people. • The consumption of alcohol may make you think you are whispering  when you are not. • The consumption of alcohol may cause you to think you can sing. • The consumption of alcohol may cause you to tell your friends  over and over again that you love them. • The consumption of alcohol may make you think you can logically  converse with members of the opposite sex without spitting.

9. New Alcohol Warning Labels • The consumption of alcohol may create the illusion that you are  tougher, smarter, faster and better looking than most people. • The consumption of alcohol may make you think you are whispering  when you are not. • The consumption of alcohol may cause you to think you can sing. • The consumption of alcohol may cause you to tell your friends  over and over again that you love them. • The consumption of alcohol may make you think you can logically  converse with members of the opposite sex without spitting. • The consumption of alcohol may leave you wondering what the hell  happened to your underwear.

10. New Alcohol Warning Labels • The consumption of alcohol may create the illusion that you are  tougher, smarter, faster and better looking than most people. • The consumption of alcohol may make you think you are whispering  when you are not. • The consumption of alcohol may cause you to think you can sing. • The consumption of alcohol may cause you to tell your friends  over and over again that you love them. • The consumption of alcohol may make you think you can logically  converse with members of the opposite sex without spitting. • The consumption of alcohol may leave you wondering what the hell  happened to your underwear. The consumption of alcohol may lead you to think people are laughing WITHyou.

11. "When I read about the evils of drinking, I gave up reading." The Truth as I often see it. “I’ve never been drunk, but often I’ve been over served.” George Gobel (1919 – 1991)

12. Time for Confession “Forgive me Father, for I have overlooked a valuable tool.”

13. Confession • Criminal • Second degree misdemeanor • Administrative • $250 - 1,000 fine, if that. Truly a cost of doing business.

14. Confession • I have come to recognize that there is a third motivator – or tool – to drive responsible alcohol retailing practices.

15. Confession • The Civil Justice System • Consider how a judgment of $70 Million, $7 Million, or even $700,000 can affect the future behaviors of both the offending retailer and others in the market.

16. Civil Justice System • The third leg of the proverbial three-legged stool. Criminal Administrative Civil Action

17. How is the Civil Justice System Used in This Venue

18. Dram Shop or Commercial Host Liability • A phrase based on a unit of measure popular in Victorian times, • Approximately 1/8th of an ounce in our vernacular, • Synonymous with a prohibition on the over-service of alcohol to a patron or guest.

19. What is Dram Shop Liability? • Tort liability

20. What is Dram Shop Liability? • Tort liability • Holds retailers responsible for alcohol-related harms caused by a patron

21. What is Dram Shop Liability? • Tort liability • Holds retailers responsible for alcohol-related harms caused by a patron • Who was illegally served alcohol because the patron was either

22. What is Dram Shop Liability? • Tort liability • Holds retailers responsible for alcohol-related harms caused by a patron • Who was illegally served alcohol because the patron was either • intoxicated (“adult liability”) or

23. What is Dram Shop Liability? • Tort liability • Holds retailers responsible for alcohol-related harms caused by a patron • Who was illegally served alcohol because the patron was either • intoxicated (“adult liability”) or • Underage (“underage liability”)

24. What is Dram Shop Liability? • Tort liability • Holds retailers responsible for alcohol-related harms caused by a patron • Who was illegally served alcohol because the patron was either • intoxicated (“adult liability”) or • Underage (“underage liability”) • Or habitually addicted at the time of service.

25. Dram Shop Liability or Commercial Host Liability can be established by statute or by application of common law What is Dram Shop Liability?

26. “New” Common Law Requirements re:Duty of Care Old Common Law Rule: Alcohol servers have no duty to protect public from actions by their underage and intoxicated patrons. New Common Law Rule: This duty does exist because the resulting harm is foreseeable and the patrons’ actions are not superseding causes of the harm.

27. “New” Common Law Requirements – Evidentiary Requirements • Alcohol was served to a minor or visibly/obviously intoxicated adult. AND

28. “New” Common Law Requirements – Evidentiary Requirements • Alcohol was served to a minor or visibly/obviously intoxicated adult. AND • The server acted negligently using the “reasonable person” standard AND

29. “New” Common Law Requirements – Evidentiary Requirements • Alcohol was served to a minor or visibly/obviously intoxicated adult. AND • The server acted negligently using the “reasonable person” standard AND • Negligent service contributed substantially to plaintiff’s harm.

30. Why Commercial Host Liability?

31. 40% - 50% of alcohol-related vehicle crashes originate in retail establishments.

32. Drivers who Drove after Binge Drinking Were Coming From: 54.3% Bars/clubs/restaurants 32

33. Driving after Binge Drinking 54.3% Bars/clubs/restaurants 27.7% reported consuming 10 or more drinks before driving 33

34. Driving after Binge Drinking 54.3% Bars/clubs/restaurants 27.7% reported consuming 10 or more drinks before driving 35.7% Private residences 34

35. Driving after Binge Drinking 54.3% Bars/clubs/restaurants 27.7% reported consuming 10 or more drinks before driving 35.7% Private residents 10.0% Elsewhere “Drinking in bars and restaurants is strongly associated with binge drinking and with alcohol-impaired driving among U.S. adults who report binge drinking.” Source: Driving after Binge Drinking, Am J Prev Med. 2009 37(4):314-20 35

36. Underage alcohol harm Alcohol is the most commonly used drug among young people. In 2010, there were approximately 10 million underage drinkers between the ages of 12 and 20 in the U.S.; 6.5 million of whom report binge drinking.

37. Underage alcohol harm Alcohol is also a key factor in the leading causes of death among 12 to 20 year olds: unintentional injuries, homicide, and suicide. Every day, 4,500 young people in the U.S. start drinking, and every year we lose 4,700 young people because of alcohol use.

38. Why Commercial Host Liability? The Community Guide and literature reviews by NIAAA and NHTSA have found: • Commercial host liability was associated with a substantial reduction in alcohol problems • For example, a median reduction of 6.4 percent in alcohol-related motor vehicle crashes.

39. Why Commercial Host Liability? The Community Guide and literature reviews by NIAAA and NHTSA have found: • Commercial host liability was associated with a substantial reductions in alcohol problems (a median reduction of 6.4 percent in alcohol-related motor vehicle crashes) • However -

40. Why Commercial Host Liability? The Community Guide and literature reviews by NIAAA and NHTSA have found: • Commercial host liability was associated with a substantial reductions in alcohol problems (a median reduction of 6.4 percent in alcohol-related motor vehicle crashes) • Legislation that limited the scope of commercial host liability may undercut these positive effects

41. Why Commercial Host Liability? Commercial host liability substantially raises the stakes for violating laws and encourages adoption of Responsible Beverage Service practices.

42. A convenience store sold alcohol to a minor… The minor got drunk and crashed his car … Judgment = $716 Millionhttp://www.myfoxtampabay.com/story/18433300/for-selling-alcohol-to-minor

43. States by the numbers – Adult • As of January 1, 2011: • 21 States and DC recognized liability without major restrictions. • 16 imposed restrictions. • 13 did not recognize Dram Shop liability

44. States by the numbers – Underage • As of January 1, 2011: • 28 States and DC recognized liability without major restrictions. • 16 imposed restrictions. • 13 did not recognize Dram Shop liability

45. States by the numbers – RBS Defense • As of January 1, 2011: • 6 States had a Responsible Beverage Service defense by statute.

46. Statutory Limitations Statutory Limitations on Commercial Host Liability: • Restrict who may sue or be sued • Restrict the actions that lead to liability • Require higher standards of care • Require additional elements of proof of retailer negligence • Limit recovery (damage caps) • “Joint but not several” liability – retailer may only be responsible for its share of the harm.

47. Evidentiary Restrictions Appliedto Dram Shop Liability

48. RBS Affirmative Defense Some states have an RBS Affirmative Defense which provides: A retailer will not be held liable if it establishes that RBS (Retailer Beverage Service) practices were in effect at the time of the service to a minor or intoxicated adult.

49. Model RBS Affirmative Defense RBS practices include: • Training staff on: • Checking ID’s • Identifying intoxicated patrons • Slowing & cutting off drink service • No price promotions or other practices that encourage intoxication • Adequate staffing and monitoring Source: NIAAA, 1985

50. To many people, these Statutory Limitations represent special interest legislation. They are perceived as harmful because they reduce the deterrent effect of the policy thereby reducing the likelihood that retailers will adopt RBS practices at least because of this motivation.