1. Maj. Mark Willingham - Moderator / Panelist James 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 WITH you.

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

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

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):314-20Am J Prev Med. 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. 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. Why Commercial Host Liability?

39. 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 - Why Commercial Host Liability?

40. 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 Why Commercial Host Liability?

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

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

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 Applied to 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.

57. MT WY ID WA OR NV UT CA AZ ND SD NE CO NM TX OK KS AR LA MO IA MN WI IL IN KY TN MS AL GA FL SC NC VA WV OH MI NY PA MD DE NJ CT RI MA ME VT NH AK HI Legend Responsible Beverage Service Defense: 2011 DC States that recognize an RBS defense States that do NOT recognize an RBS defense

58. How do the Courts establish that the retailer acted in a Reasonable and Prudent Manner – in a non-negligent manner?

59. By Applying Reasonable Standard of Care. What is Reasonable Standard of Care? From where does it come? Is there widespread agreement about it?

60. In tort law a Standard of Care is the degree of prudence and caution required of an individual under a duty of care.

61. Clear standards exist in Medicine A standard of care in the medical profession is generally recognized as a treatment guideline based on scientific evidence and collaboration between medical professionals involved in the treatment of a given condition.

62. Clear standards exist in other Professions A professional standard of care is generally recognized to be the standard that would be exercised by a reasonably prudent professional in that particular line of work.

63. But do these clear standards exist in the alcoholic beverage industry?

64. Clearly, the beverage licensee is under a duty of care.

65. Each state in the nation has made a public policy decision to license alcoholic beverages Among other issues, beverage alcohol, when used as directed, presents a risk to the drinker, those the drinker may harm, and society. And should only be sold and served as authorized by law.

66. How are reasonable standards of care established?

67. Where are these standards found?

68. Professional Standards Medical Boards, Academies establish the appropriate medical standards. Bar Associations establish appropriate standards for the practice of law. Even in my field, state Police Officer Standards and Training establishes standards of care for law enforcement officers as well as performance guidelines based on academic evidence and professional collaboration among professional associations.

69. Legal action is vested with each individual state. Standards of care, while largely similar from state, are unique to each venue.

70. Reasonable standards of care are expressed in part by:

71. Regulators State laws and rules which codify the degree of prudence and care expected by a beverage retailer.

72. Regulators State laws and rules which codify the degree of prudence and care expected by a beverage retailer. Many regulatory agencies provide reference documents for beverage retailers that express agency expectations.

73. Regulators State laws and rules which codify the degree of prudence and care expected by a beverage retailer. Many regulatory agencies provide reference documents for beverage retailers that express agency expectations. Many regulatory agencies have created training programs that express agency expectations.

74. Regulators State laws and rules which codify the degree of prudence and care expected by a beverage retailer. Many regulatory agencies provide reference documents for beverage retailers that express agency expectations. Many regulatory agencies have created training programs. Regulators may express opinions.

75. Regulators All of which establish reasonable standards of care in Commercial Host civil action. These are what a reasonable and prudent beverage retailer should do under the circumstances.

76. Regulators Regulators have the opportunity to expand these reasonable standards of care through the development and production of materials, training programs, and findings that support responsible alcohol retailing. Laws and rules alone cannot possibly explain everything a reasonable and prudent retailer should do to prevent alcohol related harms.

77. Regulators Regulators have the opportunity to expand these reasonable standards of care through the development and production of materials, training programs, and findings that support responsible alcohol retailing The materials created and provided by regulators have tremendous standing in establishing reasonable standards of care for retailers.

78. Equally Importantly These Regulatory actions and statements which establish reasonable standards of care for civil lawsuits …

79. Equally Importantly These Regulatory actions and statements which establish reasonable standards of care for civil lawsuits … also drive the implementation of these standards throughout the industry. National, state, or regional chains are examples.

80. State Industry Associations Develop and publish guidelines Present training programs

81. National Training Programs ServSafe TIPS TAM Etc.

82. Industry members themselves Written and oral policies, Alcohol service practices, Employee and management training, Management systems, And risk assessment and risk abatement practices

83. Industry members themselves This is especially relevant in recognizing that multi-state chains normally utilize one standard for their business operation even for their operation in states without dram shop laws.

84. Professional or lay person standard? Is the reasonable standard of care in the service of beverage alcohol based on the view of an ordinary person or based on that of a professional, well trained, well managed, and motivated bartender or server?

85. Professional or lay standard? A professional standard of care is more than the care required of ordinary people.

86. Professional or lay standard? Does this suggest that the reasonable and prudent standard for an alcoholic beverage industry member in detecting signs of impairment, for example, should be higher than the expected observations and recognition of intoxication by a reasonable and prudent layperson?

87. Professional or lay standard? Should bartenders be expected to recognize behaviors associated with intoxication at a lower BAC level than an ordinary patron?

88. Professional or lay standard? Does that affect the reasonable standards of care for the industry?

89. Standards of Intoxication For example, what is the appropriate standard for obvious or visual intoxication?

90. What is the appropriate standard? 0.08 g% Knee walking drunk? A couple chapters into the novel? Three sheets to the wind? Has Sold his Senses? Schnockered? Toasted? Seen the Devil? Hammered? Legless?

91. Standards of Intoxication What is the appropriate standard? And through whose eyes are these observations made?

92. Standards of Intoxication I believe that in large part the reasonable standards of care which have been intentionally or inadvertently established are those which represent levels of intoxication clearly at least twice that of the presumptive limit for impaired driving.

93. Standards of Intoxication Most states use ambiguous language such as noticeable, visual, obvious intoxication without defining those terms. Other states use language to try to define those standards which may be equally ambiguous.

94. Standards of Intoxication New Mexico, the only state that I know of with a scientific-based BAC level in their law creates a rebuttable presumption that a patron was obviously intoxicated when served if he/she has a BAC of 0.14 or higher within an hour after leaving the bar. Yet, this standard does not apply to civil Dram Shop actions.

95. Standards of Intoxication What is the presumptive limit for the impaired operation of a motor vehicle in the 50 states?

96. Standards of Intoxication What is the presumptive limit for the impaired operation of a motor vehicle in the 50 states? The answer is 0.08 g%.

97. Standards of Intoxication What is the presumptive limit for the impaired operation of a motor vehicle in the 50 states? The answer is 0.08 g%. But if you reflect on dram shop laws you will see that there is neither statutory language or case law that parallels the standard imposed for impaired driving.

98. Standards of Intoxication I recognize that the inquiry for a DUI case is fundamentally different than the inquiry for a dram shop case.

99. Standards of Intoxication I recognize that the inquiry for a DUI case is fundamentally different than the inquiry for a dram shop case. I also recognize that imposing a 0.08 g% standard for criminal, administrative, and/or civil litigation may be too great a leap.

100. Standards of Intoxication I recognize that as Jim points out the inquiry for a DUI case is fundamentally different than the inquiry for a dram shop case. I also recognize that imposing a 0.08 g% standard for criminal, administrative, and/or civil litigation may be too great a leap at least in the near-term. But this discord represents a significant challenge to the prevention of impaired driving harms coming from beverage premises.

101. Police Physicians 1930s DUI Standard and prevailing science for observation of intoxication was 0.15 g% Science has progressed since 1930, however, the use of behaviors associated with intoxication in the industry has not.

102. Private training company Your patron is now visibly intoxicated and he will have impaired reflexes. He may drop cigarettes, spill drinks, knock over bar stools, have slurred speech and stagger when he walks. His eyes may be bleary, Indicating he is seeing double and feeling sleepy.

103. State Government Training Bloodshot eyes or glassy eyes. Flushed complexion Disheveled hair or clothing Staggering when walking Unsteady on feet Odor of alcohol about their breath Uncoordinated actions or movements Incoherent, garbled, or slurred speech Boisterous, loud or profane language.

104. National Restaurant Chain Physical reaction Irregular or slurred speech Poor coordination Dazed, glassy look Inability to complete sentences Spilling food and drink Inability to sit up properly Swaying or drowsiness Stumbling & walking into things

105. Time for a change I believe that it is now time for Regulators, Industry Members, Trainers, and others to recognize that the science of intoxication has moved on since 1930 and a standard for discontinuing alcohol service should not still be based on a 0.15 g% standard.

106. Questions – Discussions?