What Is Dram Shop Liability in Arizona?

Jason Hutzler November 23, 2022

People die every day in drunk driving accidents. Nationally, 1.9 percent of drivers have admitted to drinking too much and then driving. Further, statistics show that over one million drivers are typically arrested yearly for driving under the influence. However, data shows this only accounts for 1 percent of the 111 million people who admitted to driving after drinking too much. In a recent year, 309 people in Arizona died in crashes involving drunk drivers.

It is predictable that an intoxicated driver may harm someone else. Therefore, many states, including Arizona, allow the injured person to seek damages from the person who caused the car accident injuries and a vendor who provided the alcohol to the intoxicated person. Claims against business establishments that serve alcohol are called dram shop claims.

What is a Dram Shop Act?

A dram shop is a bar, restaurant, or commercial business serving alcoholic beverages. The term dram shop law dates back to the 18th century. Pubs, taverns, and places that sold liquor to the public were called dram shops. A “dram” is three-fourths of a teaspoon of alcohol.

A dram shop law, or a dram shop act, holds the dram shop liable for harm caused by intoxicated customers. A common example is when the establishment serves alcohol to an intoxicated customer, and the customer injures somebody due to their intoxication. A dram shop is a commercial establishment, such as a bar or restaurant, that sells alcoholic beverages.

Although dram shop employees usually are not physically present in the vehicle that caused the accident, they do hold a responsibility to ensure that drunk driving accidents do not happen. While most jurisdictions limit dram shop liability to commercial establishments, some jurisdictions include social hosts.

Additionally, dram liability laws are not present in all 50 states. Currently, 43 states, including Washington D.C., have dram shop laws. The only federal law concerns establishments that serve alcohol to minors.

Dram shop laws in most jurisdictions base liability on negligence: “A failure to behave with the level of care that someone of ordinary prudence would have exercised under the same circumstances.”

Negligence usually refers to acts but may also include a failure to act.

Why are dram shops held responsible?

Drinking affects a person’s judgment. Many people make poor decisions after drinking, and in some cases, they may not understand or acknowledge that they are drunk. However, a dram shop act holds the establishment responsible for the drunk driver’s harmful actions if the person either showed signs of intoxication or the establishment should have known the person was intoxicated.

However, under Arizona’s dram shop law, if the injured person was there at the time the intoxicated person consumed the alcohol and they knew of the person’s intoxication, the dram shop may not be liable.

In general, the law holds drunk drivers responsible for the injuries they cause. Unfortunately, many people only have the minimum insurance coverage required under the law. A car crash often causes severe or fatal injuries, but the intoxicated driver may have limited financial resources. Dram shop acts help ensure that someone injured by a drunk driver can receive appropriate compensation.

What Is Dram Shop Liability in Arizona?

Understanding Arizona’s dram shop act

Arizona dram shop laws allow victims of drunk driving accidents not only to file a claim against the at-fault driver but the establishment that overserved them as well. The law provides that any restaurant, bar, nightclub, saloon, or any other place licensed to serve alcohol, may be liable for personal injuries or wrongful death under the following circumstances.

The vendor sold alcohol to someone who was visibly intoxicated. For example, if a person who has been drinking stumbles, has balance problems, or slurred speech, they may be obviously intoxicated. If a dram shop employee sees a person is intoxicated and continues to serve them alcohol, the dram shop is often responsible for any injuries or damages the intoxicated person caused.

Dram shop employees know, or should know, that they should be aware of patrons who are clearly intoxicated and may be too drunk to drive safely. If they do not monitor and take appropriate actions regarding intoxicated patrons, the dram shop could be liable in the event of an accident.

A dram shop served a minor. If the vendor sold alcohol to someone under the legal drinking age (under 21) without asking for identification or with actual knowledge that the individual was under 21 and the person then gets involved in a drunk driving accident, the establishment may be liable for the damages.

If the dram shop employee did not ask the minor for identification, it creates a rebuttable presumption that the underage person consumed the alcohol sold to them by the vendor. In other words, the burden of proof falls on the establishment to disprove that selling the alcohol to the minor caused the subsequent harm.

A dram shop act holds a licensed restaurant or bar liable for serving intoxicated individuals or minors under these conditions:

  • The establishment sold liquor to an individual who was obviously intoxicated
  • The individual consumed the alcohol purchased
  • The alcohol consumption was the proximate cause of injury or property damage. Proximate cause means that there was a direct relationship between the resulting injury and the fact of intoxication.

In a recent case, Torres v. JAI Dining Servs. (Phx.) Inc., the Arizona Supreme Court reversed a decision from the appeals court. The Arizona Supreme Court held that an establishment’s duty to the public did not end when an overserved person arrived home.

The case’s facts follow: An individual spent an evening drinking at a club in Phoenix and then drove away from the club while intoxicated. He went home and slept for a short time before taking a friend home. Tragically, he was still intoxicated and killed two people in a fatal car crash. The dram shop argued that the fact that the patron went home and slept broke the chain of causation, and therefore, the establishment was not liable.

The court ruled that a temporary stop at home does not negate liability on the club’s part for overserving a patron while in its care. This case is important because it enlarges the scope of risk that a liquor licensee faces in Arizona dram shop cases. The duty and risk run until the intoxicated patron is sober.

Establishing liability under Arizona’s Dram Shop Act

As you can see, dram shop litigation can involve complex laws. The injured person must establish proximate cause or a direct link between the intoxication and the injury or loss. The evidence must show that the dram shop continued to serve alcohol to a patron, even though it knew or should have known the patron was intoxicated. The first step is determining where the individual was drinking before the accident. There may be more than one place. Police reports may contain this information, or the driver or witnesses may provide it.

The next issue is how many drinks the dram shop served to the intoxicated individual. Credit card and cash register receipts and bank statements are a good start. However, witness testimony from servers and other patrons and surveillance video may also provide details. In some cases, friends or family may have purchased drinks for the individual. Once the attorney or investigator knows how many drinks the shop served the patron, an expert may review the evidence to determine if the establishment knew or should have known the customer was intoxicated at the time.

Many factors affect blood alcohol content. These include a person’s weight, gender, alcohol tolerance, medications, the size of the drink, how quickly the person consumes it, and whether the individual has consumed any food. Without the benefit of a breathalyzer test, servers cannot know a patron’s blood alcohol content. However, they should recognize visible intoxication.

Sometimes a person’s appearance or behavior may indicate visible intoxication. While no single factor identifies visible intoxication, common signs include significant physical dysfunction such as stumbling or falling, falling asleep at the bar, slurred or excessively loud speech, or crude behavior. In extreme cases, dram shop employees served alcohol to customers even when they were clearly unable to drive safely. They have assisted visibly intoxicated customers to their cars to drive home.

In the case of underage drinkers, the key evidence of a vendor’s liability is the customer’s identification. If the individual has a driver’s license or other identification that clearly indicates they are a minor, the establishment may be liable for resulting harm. Witness testimony and video surveillance can prove whether an employee checked the identification.

What are social hosting laws in Arizona?

A social host “furnishes another with alcohol in a social setting and not as a licensed vendor.”

A social host can be just one person or a group of people. The party may be large or small, and the location is unimportant. Thirty-two states make social hosts liable for harm caused by intoxicated guests.

If the following elements exist, you may hold a social host liable for damages or injuries caused by an intoxicated guest:

  • The social host served alcohol to the individual who caused the injury or property damage.
  • The social host knew or should have known that the individual who caused the injury or damage was intoxicated.
  • The social host knew or should have known that the intoxicated individual who caused the harm would be driving following the event.

Under Arizona law, social hosts who provide alcohol to visitors who are not minors are exempt from liability. For example, individuals who do not have an Arizona liquor license are not liable under the dram shop law if they provide alcohol for legal adults. However, the social host can still be held liable if they serve alcohol to minors.

Although it is illegal to serve alcohol to minors in all 50 states, some states, including Arizona, do have social host liability laws for serving alcohol to minors. These cases may carry criminal penalties.

What damages can a victim recover in a dram shop lawsuit?

Car accidents can result in devastating or even fatal injuries. The injured person may live with permanent catastrophic injuries that affect their ability to function and desperately need compensation for current and future expenses. In some cases, the intoxicated driver may have insufficient resources to pay these expenses. However, if liable, the dram shop that provided the alcohol will likely have far greater assets and insurance coverage available to compensate the victim.

Damages a victim or their family may seek compensation for include:

  • Current and future medical expenses
  • Rehabilitation costs associated with the disability
  • Current and future loss of income
  • Property damage expenses
  • Pain and suffering, including emotional and mental anguish
  • Disfigurement and scarring
  • Wrongful death costs, such as funeral or burial expenses

The Statute of Limitations in a dram shop lawsuit

The statute of limitations is the deadline for filing a lawsuit under the dram shop act. According to the statute of limitations, victims must file claims within two years after the injury or property damage in Arizona. If the period expires, you lose the chance to utilize the court system. However, each case is unique, so it is important to consult an attorney immediately.

Whether you were injured in an accident caused by a drunk driver or you were the intoxicated individual, you may be able to collect damages from the dram shop that negligently supplied the alcohol. While you are coping with the pain of your injury, medical bills and lost wages can mount up incredibly fast. Contact an experienced personal injury attorney for your free consultation and pursue the compensation you need.