Operating an establishment that sells liquor to patrons in California can be a difficult proposition at times. In addition to the challenges imposed on all business owners at one time or another, a business serving alcohol can face liability for injuries sustained by their patrons from a variety of sources. These can include underage patrons, other patrons and criminal third parties. This article summarizes the current state of tort liability law in California governing liquor-serving establishments.

Liability for Acts of Other Patrons of Non-Patrons

Does an establishment owner have an obligation to protect its patrons from injuries caused by other patrons? For example, is there any liability for an owner if the owner or its employees fail to prevent one patron from harming another?

Generally, under California law, a person or entity does not owe a duty to protect against the conduct of third parties, unless there is a special relationship between the person or entity and the third party. One of these special relationships is that of a business establishment and its patrons. California decisions long have recognized, under the special relationship doctrine, that a proprietor who serves intoxicating drinks to customers for consumption on the premises must “exercis[e] reasonable care to protect his patrons from injury at the hands of fellow guests.”Delgado v. Trax Bar & Grill (2005) 36 Cal.4th 224, 241. Examples where liability has been imposed on businesses under this theory include:

1. A tavern keeper that allowed a person on the premises who has a known propensity for fighting;
2. A tavern keeper that allowed a person to remain on the premises whose conduct had become obstreperous and aggressive to such a degree the tavern keeper knew or ought to have known he endangered others;
3. A tavern keeper that had been warned of danger from an obstreperous patron and failed to take suitable measures for the protection of others;
4. A tavern keeper that failed to stop a fight as soon as possible after it started;
5. A tavern keeper that failed to provide a staff adequate to police the premises; and
6. A tavern keeper that tolerated disorderly conditions.

What about liability for the acts or conduct of non-patrons? Does a business owner have a legal duty to protect its patrons (or tenants) from criminal acts by third persons while they are patronizing the establishment, or are simply on the establishment’s property? The answer is a clear “yes.” Under California law, business proprietors owe a “general duty of maintenance, which is owed to tenants and patrons, and ... include[s] the duty to take reasonable steps to secure common areas against foreseeable criminal acts of third parties that are likely to occur in the absence of such precautionary measures.” Delgado v. Trax Bar & Grill (2005) 36 Cal.4th 224, 235

Liability for Acts of the Patron - Dram Shop Statutes

However, the legal duty of business owners is not absolute and all-encompassing. One area of California law that provides some measure of protection for business proprietors are California’s “Dram Shop” Acts. These laws protect a business owner from civil liability for injury or damages caused by an intoxicated person to whom the owner has served alcoholic beverages. California Business and Professions Code Section 25602(b) states:

(b) No person who sells, furnishes, gives, or causes to be sold, furnished, or given away, any alcoholic beverage pursuant to subdivision (a) of this section shall be civilly liable to any injured person or the estate of such person for injuries inflicted on that person as a result of intoxication by the consumer of such alcoholic beverage.

Generally, this statute provides broad immunity for sellers of liquor for the acts of the patron who consumes alcoholic beverages, whether they are proven to later be intoxicated or not. This was summed up in section (c) of B&P Code Section 25602 which states that “it is the consumption of alcoholic beverages rather than the serving of alcoholic beverages as the proximate cause of injuries inflicted upon another by an intoxicated person.” (emphasis added).

The Legislative intent is to preserve the ability of liquor-serving businesses to continue the most profitable component of their businesses without risking civil suits filed by persons injured by their potentially intoxicated patrons. While the general public may disagree with the public policy inherent in the Legislature’s intent to protect liquor-selling establishments, the “Dram Shop” statute is an important protection available to these businesses.

Liability for the Acts of Minors

Another potential risk for business owners is underage drinking by minors on their property. Because of the public policy implication of the need to prevent underage drinking, the Legislature has allowed civil lawsuits against businesses who sell alcohol to minors, but with an important exception. California Business and Professions Code Section 25602.1, provides that:

Notwithstanding subdivision (b) of Section 25602, 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.(emphasis added).

There are two important qualifications to this statute that provide fodder for attorneys representing the parties in civil suits as found in the phrases: 1) “obviously intoxicated;” and 2) “proximate cause of the personal injury or death.” Clearly, whether a person is “obviously intoxicated” or whether the furnishing or sale of an alcoholic beverage proximately causes an injury or death can be the subject of much debate. The adjudication of these important factual disputes often requires a jury trial but unfortunately, with all of the attendant risk and cost to a business owner or its insurance carrier.

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Joseph J. (J.J.) Minioza is a partner and shareholder in Oakland office of Ericksen Arbuthnot, a California law firm. Mr. Minioza is an AV-Preeminent attorney as rated by Martindale Hubbell™ and was named a 2013 Super Lawyer©. He is a trial attorney specializing in representing corporate defendants in all manner of suits, from premises liability and personal liability, to employment, to construction and real estate matters.