Overview of Alcohol Liability in Texas – Part I

The following is the first in a series of posts addressing alcohol or dram shop liability in Texas.

In 1987, the Texas legislature enacted the Texas Dram Shop Act.  Prior to such time, Texas law did not impose liability on sellers of alcohol who "over-served" intoxicated patrons.  Rather, the over-served patron was considered responsible for his/her own conduct and any consequences proximately caused by such conduct.  The Dram Shop Act was an effort to address concerns related to over-service weighed against the reality of the circumstances surrounding the sale of alcohol.  The Dram Shop Act was intended to represent a balance between the need to protect the public from over-service, and the desire to protect alcohol providers from litigation.

In order to establish liability under the Dram Shop Act for the alleged over-service of alcohol to an adult, the injured party must show that the alcohol provider, i.e., the bar, restaurant, convenience store, etc., served alcohol to a customer when it was apparent to the provider that the recipient was "obviously intoxicated" and the recipient's intoxication proximately caused the injured party's claimed injuries.

To be obviously intoxicated, the recipient of alcohol must present a clear danger to himself and others.  For the recipient's actions to be apparent, the conduct must be visible, evident and easily observable.  Note that obvious intoxication is generally considered a higher standard than mere legal intoxication, i.e., the legal limit to operate a motor vehicle.  Put differently, a customer normally must have a higher blood alcohol level to be deemed obviously intoxicated versus simply being legally intoxicated so as to not be able to legally operate a motor vehicle.

Whether a provider should have noticed that a customer was obviously intoxicated is determined under an objective standard.  The provider is compared against what a reasonably prudent provider would have done under similar facts and circumstances.

The Dram Shop Act provides the exclusive remedy for liability resulting from injuries caused by an alcohol provider's negligent over-service of a patron.  Consequently, a party injured resulting from the service of alcohol cannot bring an ordinary negligence claim.  Furthermore, Texas courts have generally held that exemplary damages are not recoverable under a dram shop cause of action.  This often serves to limit grossly oppressive damage awards in these types of cases.  However, these cases remain some of the most dangerous cases that affect the restaurant and hospitality industry.

In the upcoming series of posts related to alcohol liability in Texas, we will discuss what it means to be a provider of alcohol, the application of the Dram Shop Act to social guests, the standard for the sale of alcohol to minors, potential available defenses for providers of alcohol and best practices related to investigating claimed events of over-service.  Please stay tuned to this blog for regular updates on this subject-matter.

Kane Russell Coleman Logan PC's Retail, Restaurant & Hospitality Practice Group has extensive experience representing alcohol providers in dram shop claims and litigation.  The Practice Group also has experience guiding providers through inquiries and investigations undertaken by the Texas Alcoholic Beverage Commission.  Further, the Practice Group provides guidance on alcohol safety manuals and training materials and conducts workshop programs to assist providers and their employees with understanding and complying with the requirements of the Dram Shop Act.