Let’s get Merry, Bright…and Sued?
Firm Management, Legal Malpractice, LiabilityTHE RISKS OF SOCIAL HOST LIABILITY IN TEXAS
December is National Drunk & Drugged Driving Prevention Month or National Impaired Driving Prevention Month. Many of us will be hosting or attending holiday parties this December. Most who consume alcohol at these parties will do so responsibly. But who’s liable for those who don’t? If I host a party at my house or office, and set out bottles for self service, am I liable for the drunk driving crash involving one of my guests? What if I hire a bartender? What if our party is at a local restaurant’s private party room? What if it’s at a bar? What if a minor consumes alcohol at my party? Does insurance pay, or does a settlement or judgment come directly from my bank account?
The phrase “no social host liability” is frequently thrown around, but is that phrase as absolute as it sounds? As with most things in the law, the application of the rule will trap the unwary, even though the rule appears relatively straightforward.
This article first identifies what a “social host” is or is not. Then, the article considers several common events and responses in those situations that may give rise to liability despite the general rule that social hosts are not liable for injuries caused by their drunk friends.
What a social host is and is not.
The phrase “social host” distinguishes those who are not professional servers of alcohol from those who are, but all who serve or provide alcohol must abide by Texas’ Dram Shop statute. The statute regulates the service of alcohol by “providers”–“a person who sells or serves an alcoholic beverage under authority of a license or permit issued under the terms of this code or who otherwise sells an alcoholic beverage to an individual.” A “social host” is not a professional “provider” like a bartender serving drinks at a bar or a restaurant owner selling alcohol to her restaurant patrons. Instead, a “social host” is someone other than a “provider” who serves (but does not sell) alcohol to others.
Social hosts during the holidays.
During holiday seasons in particular, many people who are not professional providers of alcohol become social hosts, and generally not liable for the acts of their intoxicated guests. However, there are instances where liability can be imposed on a social host. The following hypothetical, but common, scenarios illustrate the social host’s potential liability.
Scenario 1: The Home/Office Holiday Party
This is the classic holiday party scenario. The boss decides to host the holiday party at her house or to have it at the office. She orders beautiful decorations and delicious catering. And she buys copious amounts of alcohol from the liquor store because she really wants everyone to get in the holiday spirit before they play reindeer games. Although the caterer sends folks to serve the food, the alcohol is self-serve (and free!), and the only “monitoring” going on is ensuring the alcohol never stops flowing. Fifty-year-old Dave, from Accounting, couldn’t be more “in the spirit.” Not only did he wear the ugliest sweater anyone’s ever seen (despite there being no ugly sweater contest), he’s decided that this party is the right time for him to show his coworkers he’s not just “Dave the Dreamcrusher” in Accounting (“that’s not in the budget!”), he’s actually a fun guy who likes to party like he’s “Frank the Tank.” He crushes two tequila shots immediately upon arrival and then confiscates a bottle of whiskey for his own personal consumption. As the evening’s end draws near, Dave has broken Frank the Tank’s beer bong record, but instead of running across campus sans clothes, he hops in his convertible sports car and floors it. Surprising no one at the party, Dave crashes into oncoming traffic, seriously injuring the Gibson family who was on their way home from dinner. The Gibsons sue Dave, and the boss, claiming that the boss is liable because she provided the alcohol and never bothered to control Dave’s drinking and driving.
Is the boss liable to the Gibsons for Dave’s drunk driving? Under the facts above, the social host doctrine says, “no.” Texas law does not impose liability on a social host who passively provides alcohol at parties like the one in this fact pattern. In ruling on a similar scenario in Graff v. Beard, the Texas Supreme Court concluded there’s no liability, stating, “the imbiber maintains the ultimate power and thus the obligation to control his own behavior: to decide to drink or not to drink, to drive or not to drive.”
But let’s change the facts a bit. Suppose the boss saw that Dave was so intoxicated that he could get really hurt in a crash driving his little convertible, so, before allowing Dave to leave, the boss made Dave walk around the block while drinking water. Then, upon Dave’s return and noticing he was still heavily intoxicated, the boss made him go take a shower to “sober up.” When he was done showering, the boss saw Dave was still drunk, so she insisted Dave drive home in the boss’s huge SUV which would provide more protection to Dave should he get in a wreck. Then, Dave got into the same wreck with the Gibsons and the same lawsuit followed. Is the boss liable now? Maybe. Texas caselaw shows that when a social host exercises control over a guest, especially when due to that guest’s intoxication, the door to liability is left open. The boss’s actions may have removed her from the role of mere social host and placed upon her an affirmative duty to not negligently exercise the control she had over Dave.
Now, let’s change the original facts again. Suppose the boss sees an opportunity to use the party to raise money for a local non-profit, so she decides to play barkeep and to sell the alcohol to her guests. Although the fact that the boss is behind the bar keeps Dave from confiscating the bottle of whiskey, the boss’s offer of $1 mixed drinks allows Dave to consume just as much. Every time Dave stumbles up to the bar, the boss has a good laugh at Dave’s inability to walk properly and to form a coherent sentence. One time, he tripped over himself, let loose a string of curse words, and then bought his mixed drinks from the boss, and lumbered off, all while the boss laughed hysterically. The boss was thoroughly amused by Dave throughout the night, plus, he paid her a small fortune that she could donate to the nonprofit. However, the Gibsons weren’t so amused when Dave crashed into them after he drove away from the party. Is the boss liable to the Gibsons in this scenario? Yes. Under the Texas Dram Shop Act, a “provider” of alcohol isn’t only a professional bartender with a TABC license, but a “provider” is also someone who “otherwise sells an alcoholic beverage to an individual.” This portion of the statute makes the boss liable for Dave’s drunk driving because she sold alcohol to him when he was “obviously intoxicated to the extent that he presented a clear danger to himself and others” and his intoxication was a proximate cause of the Gibsons’ injuries.
Finally, what if the boss decides to hire her nephew, Bud, who is a TABC-licensed bartender, and who will man the bar, serving free drinks to her guests. The boss tells Bud to not overserve any guest and that he has the authority to refuse service to anyone. Bud, being the friendly, non-confrontational sort, overserves an obviously drunk Dave, who leaves and crashes into the Gibsons. Is the boss liable? Probably not. Under these facts, the boss appears to be a traditional social host who did not sell alcohol, nor did she exercise any control over Dave due to his intoxication. Bud may have to pony up, but the boss appears to be off the hook.
Scenario 2: The Work Party at the Bar
Many employers want to avoid the hassle of hosting their own holiday party, so they treat their employees to a come-if-you want night out at the local hotspot. Dave, the omnipresent drunk in these hypotheticals, stays true to form, gets heavily intoxicated at the hotspot, and crashes into the Gibsons. Is Dave’s employer liable? No. The liability here is on the hotspot, not on the employer, because, even though the employer paid for the drinks, it did not exercise control over Dave nor was it a “provider” under the Dram Shop Act.
What if the hotspot creates a special drink in honor of the employer and donates a portion of the proceeds to the employer’s charity of choice? Will the employer be liable under a social host theory? No. The employer did not sell the alcohol, which is the only way it can be converted into a “provider” from an ordinary social host, and only “providers” are liable under the Dram Shop Act.
Suppose the employer noticed how drunk Dave was getting, and, in order to avoid any embarrassing moments for him or the employer, the employer asks two other employees to escort Dave to his car, and to make sure to instruct Dave to drive straight home. Is the employer liable now? Yes, but, like the boss above, the employer is not liable under a social host theory, but because it exercised control over Dave due to his intoxication. These facts are similar to a seminal case on employer liability for the off duty acts of its employees, called Otis Engineering Corporation v. Clark, where the Texas Supreme Court concluded that an employer was liable for the damages caused by its employee who got drunk at work and, because of his drunkenness, was escorted to his car and sent home.
Similarly, if the employer makes the party mandatory and converts it into an end-of-year sales meeting, the employer might incur liability for Dave’s intoxicated driving. Under these facts, the liability arises because of the employer’s control over Dave, not from a dram shop or social host theory of liability.
The “Minor” Exception
There is a fact that could change all of the non-liability scenarios discussed above. If Dave is the boss’s friend’s 17-year-old son, and the boss knowingly served alcohol to Dave or knowingly allowed alcohol to be served to Dave at the party at the office or the boss’s house, the Dram Shop Act expressly imposes liability on the boss. Because Dave is a minor (17 and under) and the boss is 21 or older, the Dram Shop Act imposes liability on the boss for Dave’s drunk driving crash into the Gibsons. If Dave is the boss’s son, or the boss is under 21, then the boss is still free from liability (unless the boss is also a TABC-licensed bartender or sells the alcohol to Dave).
Does insurance cover social host liability?
If potential liability arises, what insurance policies may come into play? Most homeowner’s liability policies will cover the social host when the party is at that person’s covered home. An employer’s general liability policy may also cover these situations, but there may be exclusions for off-premises parties or off-duty actions of employees. If the restaurant or bar where the boss hosted the party, or the bartender hired to serve at the boss’s house, has insurance, it may provide coverage. But beware, there isn’t a requirement for professional providers to have insurance and many general liability policies for restaurants and bars do not include liquor liability.
So, What is the boss to do?
Given the possibility of severe injuries and death, a social host like the boss should follow a few best practices to help everyone have a good time while at the same time minimizing her own potential liability:
- Hire a professional (and properly insured) bartender for the party at her house or the office. Professional providers are required to undergo TABC training, which includes learning the signs of intoxication.
- Double check that she (and the company) have insurance to cover the party at her house (or the office).
- Encourage designated driving and offer to pay for third party drivers, like Uber, Lyft, or conventional taxis.
- Serve food and non-alcoholic beverages, and consider ending bar service before the party’s scheduled end.
- Host the party at a properly insured bar or restaurant.
- Avoid exercising control over Dave, the drunk, such that the boss becomes responsible for Dave when she otherwise wouldn’t be.
The holiday season should be one of great merriment and joy, and with the proper precautions, a social host can ensure that her party does not lead to drunk driving injuries. TLIE wishes everyone a happy, safe, and claim-free holiday!
