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New Jersey's Dram Shop Statute: A Help or Hindrance?

I. Introduction

Approximately four decades ago, New Jersey’s Supreme Court first imposed liability against a liquor license owner for negligently serving an intoxicated patron, who later caused personal injury. Thereafter, the so-called Dram-Shop rule was extended to protect not only innocent third-parties and their property, but also, patrons who became so intoxicated that they injured themselves. For the next thirty years or so, the courts continued to expand the scope of the Dram-Shop rule.

In 1987, the legislature codified liquor law liability in a statute title “New Jersey’s Licensed Alcoholic Beverage Servers Fair Liability Act” (Act). The Act was conceived to address the dramatic increase in cost and widespread unavailability of liability insurance for the “license alcoholic beverage server” ( License Server) caused by the ever expanding Dram-Shop rule. The core purpose of the Act was to provide some level of predictability to Dram-Shop claims by specifically defining the License Server’s liability so as to make insurance coverage readily available at a reasonable price and in that way both the License Server and the innocent victims of a drunken patron could be protected.

In order to impute liability to a License Server under the Act for the personal injury or property damage of another, it must be shown that the License Server was negligent as that conduct is narrowly defined by the Act (Negligent Concept) and that the License Server’s conduct caused some injury which could be reasonably expected under the circumstances of the claim. (Causation/Foreseeability Concept).

Notably, the liability created by the Act is the only remedy for a person who has been injured or who has had property destroyed by a drunken patron of a License Server. (Exclusivity Concept). The Exclusivity Concept is consistent with the Act’s commitment to ensure predictability in cases of this nature.

In another deliberate effort to limit the responsibility of a License Server, the Act further provides that if a License Server has been determined to be negligent, the fault or negligence of all others involved in the event that produced the lawsuit, including, the claimant, must be compared and a percentage of fault ascribed to each actor. (Comparative Negligent Concept). In that way, a License Server’s liability can be diluted by the fault of others.

II. The Negligent Concept

A License Server can be found negligent only under two limited circumstances as defined by the Act. The first is if the License Server provides an alcoholic beverage to a visibly intoxicated patron. The second is when the License Server provides an alcoholic beverage to a minor, where the License Server knew or should have known that the patron was a minor.

A claimant does not have to prove that a visibly intoxicated patron or a minor was actually served an alcoholic beverage. It may be enough if the License Server merely allowed or provided one of these two specifically defined patron an opportunity to obtain an alcoholic beverage.

A. Adult Patron Liability

The Act defines the term "visibly intoxicated" to mean "a state of intoxication accompanied by a perceptible act or series of acts which present clear signs of intoxication." In assessing the influence of this statutory principle on a liquor law liability cases, it may be well to know that it is illegal to operate a motor vehicle in New Jersey with a BAC of .08% . Scientific convention seems to indicate that an average person will exhibit some signs of intoxication with a .10% BAC and that 85 % to 90% of individuals with a BAC of approximate .15% will be visibly intoxicated. A noted expert has concluded that an appropriately trained bartender, waiter or waitress will almost always recognize individuals with a .10% BAC as visibly intoxicated. Moreover, the use of drugs, including marijuana, may in the words of one expert on the subject have "a powerful interactive effect with alcohol in increasing impairment".

Some of the symptoms of a visibly intoxicated person may display are: (1) staggering, swaying or sagging while walking; (2) rigidity, swaying or feet wide apart for balance while standing; (3) speech that is slobbering, slurred or rambling; (4) bloodshot or watery eyes; and, (5) a flushed face.

In addition, a patron may be determined to have been visibly intoxicated by the manner in which his/her vehicle was driven in proximity to the time the last drink was ingested.

B. Underage Patron Liability

A minor under the Act is a person who is under the legal age to purchase and consume alcoholic beverages, which in the state of New Jersey is 21 years. Once a License Server gives an alcoholic beverage to a minor or allows a minor to consume one, the License Server’s negligence attaches irrespective of whether the underage patron was intoxicated. This special rule is based on a recognition that the inherent dangers of alcohol use are intensified with an underage drinker and create more of a public concern than the service of an intoxicated adult.

III. The Exclusivity Concept

Prior to the Act, people who were victimized by drunken patrons of bars and restaurants would contend, among other things, that the License Server failed to properly screen, train or supervise their employees and that by reason of this negligent conduct they suffered a loss. These theories of liability do not appear to be available to a Dram-Shop claimants any longer, if the core of the lawsuit relates to the service of an alcoholic beverage. As explained, the Act limits liability to only those circumstances where a License Server provides an alcoholic beverage to a visibly intoxicated patron or a minor.

Recently, however, an appellate court seems to have expanded the limited pockets of liability defined by the Act. In that case a minor joined a number of drinking-age friends at a local bar where the minor was drinking heavily before his arrival. While the License Server did not provide or serve the minor with any alcoholic beverages there was proof that one of his friends were spiking his coke with rum. There was other proof that the minor, who was known to be underage by various employees of the License Server, became intoxicated and that the waitress provided the group with "attentive" service. After a two-and-a-half hour stay at the bar, the minor drove a friend home and became involved in a one car accident where his friend who was also visibly intoxicated was killed. The minor’s blood alcohol concentration (BAC) was .199% which is almost two-and-a-half times greater than the legal limit.

At trial, the case was dismissed because the claimant could not established that the License Server provided the minor with any alcoholic beverages. The appellate court, however, reversed the trial court’s ruling and reinstated the case for two separate reasons. The first was that the License Server had a responsibility to the intoxicated victim to insure that he did not drive or ride home with someone who was similarly intoxicated. The second theory of liability offered by the court focused on the License Server’s responsibility to protect both the minor and others by making sure that the intoxicated minor did not drive. Notably, as of January 2009, this case is under review by the Supreme Court. A decision on this important issue has yet to be rendered as of the date of this article.

IV. The Comparative Negligent Concept

As explained, the Act authorizes a License Server to place all or part of the blame resulting from a Dram- Shop case on the intoxicated patron, as well as, any other person that may have caused or influenced the harm. Negligence must be apportioned to each actor according to the actor’s degree of fault. The

Comparative Negligence Concept can require the analysis of fault apportionment under a whole host of different circumstances. Typically, however there are two recurring issues in Dram-Shop cases. One relates to the negligence of the intoxicated patron who caused the harm and the other to the negligence of the intoxicated patron who sustained the harm.

The comparative negligence of a intoxicated patron usually occurs where he/she decides to drive a motor vehicle or enters a motor vehicle operated by a drunk driver. In those instances, it has been determined that while an intoxicated patron’s voluntary decision to drink an alcoholic beverage may be considered, if a License Server provides an alcoholic beverage to a visibly intoxicated patron, it will be presumed absent extraordinary circumstances, that the patron lacked the capacity to appreciate the risks that would ordinarily follow. By the necessary implication of this proposition of law, the intoxicated patron’s negligence should not reduce the License Server’s liability, if the patron was served while visibly intoxicated. This presumption may not apply, however, where there are special or exception circumstances. One of the circumstances that will prevent the use of this presumption is where the intoxicated patron assaults another. In another situation, it was determined that this presumption should not apply where the claimant was a bartender who drank herself to a high level of intoxication while working in a License Server’s establishment that had or a no-drinking-while on-duty policy.

V. Foreseeability/Causation Concept

In order to establish the liability of a License Server it must be shown that the injury was the probable result or cause of the License Server’s negligence and that it was reasonably anticipated. These principles are based on concepts of fairness.

A. Causation

If an intoxicated patron leaves a Licensed Server’s establishment and decides to "sleep-it-off" in the back seat of his vehicle and while asleep the vehicle rolls down a hill and strikes a pedestrian because of the vehicles defective brakes, the Licensed Server who served the intoxicated patron should not experience any liability because the injury was not caused by the negligence of the Licensed Server. In short, there must be some link or nexus between injury and the negligence of the License Server.

B. Foreseeability

One can readily anticipate or foresee that a drunken driver can cause injury and so does the law. The negligence of a License Server is not limited to automobile accidents involving drunk drivers, however. Injury has been foreseeable in Dram-Shop cases under a number of other circumstances, including where: (1) a drunken patron falls on the License Server’s premises; (2) where a drunken minor sets fire to his home after returning from the License Server’s bar; (3) where a patron is assaulted by another patron who is intoxicated; and, (4) where a drunken minor injures him/ herself by punching a window.

If, however, a visibly intoxicated patron leaves a Licensed Server’s establishment and for some unexplainable reason climbs up a tree and is later injured because he fell from that tree, there should be no liability because that type of conduct cannot be foreseen.

VI. Conclusion
Plainly, the Act has seriously limited the scope of a Licensed Server’s liability. It is equally plain that the courts are literally struggling to maintain allegiance to this legislative goal. Notwithstanding, victims of drunken patron’s of bars and restaurants continue to have a significant legal basis for a remedy where the claimant’s attorney is prepared to commit to a painstaking analysis of all of the factual and legal principles needed to win the case. If you or a loved one have been injured by an intoxicated person, you should immediately engage an attorney who has extended experience in this area of the law.

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