The Risks of Over-Serving to Visibly Intoxicated Patrons at Restaurants in NYC

The dangers of over-serving alcohol to restaurant, bar or hotel patrons who are already visibly intoxicated cannot be overstated for establishments that are permitted to serve alcohol in New York State. This is not only a legal, but also a risk management issue for any drinking establishment that serves alcohol to its customers.

Dram Shop Law

Under New York law, a restaurant, bar, hotel or other establishment that serves alcohol to its patrons can potentially be held liable under New York’s Dram Shop Act for continuing to serve alcohol to a patron who is visibly intoxicated if that patron then injures or causes property damage to third parties as a result of his or her intoxication. Although the most common scenario in this context is a drunk driver who gets behind the wheel and injures someone else, there are many other circumstances in which a third party can be injured by someone who is visibly intoxicated. This therefore creates a legal risk to any establishment that serves alcohol to its patrons that needs to be properly managed. With the proper training and supervision of staff members in spotting the obvious, and more subtle, signs of any patron who may be visibly intoxicated, followed by staff monitoring of further alcohol consumption by the patron, an establishment can minimize its legal exposure under New York’s Dram Shop Act. What types of laws regulate serving alcohol to patrons who are already intoxicated? In the United States, dram shop laws can impose liability on establishments for serving alcohol to people who are already visibly intoxicated if the staff chooses to continue serving alcohol to that customer. The term ‘dram shop’ is a legal term that derives from 18th century England, where alcohol was served by the ‘dram,’ a measurement that correlates to roughly a teaspoon. Establishments that served alcohol were referred to as dram shops, with laws regulating the commercial sale of alcohol termed ‘dram shop laws.’ Business establishments that have alcohol licenses and serve alcohol to their customers may be held liable in certain circumstances for damages to third parties who are injured as a result of the sale of alcohol to an intoxicated patron. For example, imagine that a bartender serves ten drinks over a period of 90 minutes to a patron who was already clearly intoxicated and could barely stand whenever he first entered a bar. The patron then loudly announces his intention to “drive home and sleep it off” after having those ten drinks, and kills a pedestrian outside the bar. Depending on the particular jurisdiction’s dram shop laws, the bar itself could potentially be held liable. Although not every example will be this obvious, dram shop laws can put establishments, like restaurants and bars, in a difficult position, given that their business is serving alcohol to customers. What New York’s laws relate to over serving patrons who are already visibly intoxicated? New York’s Dram Shop Act is found in Section 11-101 of the New York General Obligations Law and Section 65 of the New York Beverage Control Act.  Under this law, it is illegal for businesses that sell alcohol to serve someone who is already “visibly intoxicated.” As one might expect, the portion of this law that has generated the most confusion (and consequently the most litigation) has been the definition of what constitutes “visibly intoxicated.” Courts have been consistent that a commercial seller of alcohol, such as a restaurant or bar, cannot be held liable under the Dram Shop Act where the establishment would have no reasonable basis to know the customer was intoxicated.  For example, if a patron appears by all measures to be in control of all of his or her faculties and then is subsequently pulled over for a DUI and tests positive for a highly elevated blood alcohol content level, there is no way an establishment would have any way to know the customer was intoxicated. Whether a customer was visibly intoxicated is a factual question that depends on the particular scenario and facts present in each particular situation. It can include such things as a patron’s demeanor (i.e. was the patron slumped over the bar and slurring words when ordering drinks, or sitting upright with no signs of visible intoxication), whether their breath smelled of alcohol or eyes were bloodshot, and other signs they may have been drinking to excess. New York’s Dram Shop Act is clear in that an establishment must be engaged in the sale of alcohol for profit in order to fall within the scope of the Dram Shop Act.  For instance, several New York courts have held, for instance, that an employer was not covered by the Dram Shop Act where the employer provided alcohol at an office holiday party and an employee then became visibly intoxicated and injured a third party. The same is true if an employer or establishment provides free alcohol to its employees during their work shifts and an employee becomes overly intoxicated and then causes harm to a third party. New York law is also clear that the commercial sale of alcohol must be made directly to the intoxicated person. For example, imagine a person at a bar is visibly intoxicated, but his or her friend keeps going to the bar and buying more drinks for them. That intoxicated person never actually purchases his or her own drinks from a bartender or server, and then drives home drunk and injuries a third party. Under New York’s Dram Shop Act, the establishment would not be liable. New York law also is unique when compared with other states in that intoxicated patrons themselves may not sue a business establishment if the patron goes out and wrecks his or her car but does not injure, kill or cause property damage to a third party. The patron is deemed to be responsible for their own conduct in such circumstances. Instead, the bar or tavern may only be held liable for damages caused to third parties who were injured or killed by the patrons of the bar who were served alcohol. In what types of scenarios are New York’s Dram Shop Act typically implicated? The most common scenario that comes to mind when considering an instance in which over-serving a visibly intoxicated patron could lead to legal liability for a bar or restaurant would be a drunk driver who hits another vehicle, injuring or killing its driver or occupants. However, there are plenty of other circumstances in which an intoxicated person could cause harm to a third party as a result of continuing to drink alcohol past a safe point, including incidences where the patron fights with or attacks an innocent bystander. How can establishments minimize the probability of being implicated in a New York Dram Shop Act lawsuit? For establishments that serve alcohol in New York, the solution to minimizing or mitigating the risks associated with over-serving guests is simple: employee training. Ensure that your entire staff, from owners and managers to back of house staff, know the obvious signs of intoxication.  This includes not only the more recognizable signs, like slurred speech, stumbling when walking or falling asleep at the bar, but also someone smelling strongly of alcohol, or more subtle signs like bloodshot eyes. Creating a culture of openness where anyone can say something to a bartender, member of the waitstaff or a manager regarding a particular customer’s state also is particularly important. For instance, a line cook or dishwasher may see a customer stumbling down a hallway to vomit outside, or overhear a patron commenting on how drunk they are if the staff member happens to be using the restroom at the same time as that patron.  The line cook or dishwasher should not only be permitted, but encouraged, to report such instances to the establishment’s management. This will allow the management team to mitigate the risks associated with continuing to serve a visibly intoxicated patron, and can instruct the bartender or server accordingly. With a culture of constant vigilance and open communication, staff members can lessen the likelihood of injuries to third parties and an establishment’s liability for any such injuries as a result of the serving of alcohol to an intoxicated person. Not only will this make for a safer environment for patrons, but will lessen the possibility of legal exposure for the business. Most importantly, it will reduce the chance a third party will suffer harm as a result of one individual’s decision to keep on drinking past the point where they can safely do so. Unhappy with your reservation management software? Check out SevenRooms.