Traditionally, the term “dram shop” referred to a shop where spirits were sold by the dram, a small unit of liquid. A dram is nearly equivalent to a teaspoon and in years past was used to refer to a small amount of Scottish whiskey. So, if you want to befuddle your local barkeep, try ordering a “wee dram of Laphroaig” in your best Scottish accent.
In the United States, dram shop liability is often used to describe various state statutes governing the civil liability of restaurants, taverns, liquor stores and other commercial establishments that serve alcoholic beverages. Dram shop laws generally establish civil liability of establishments arising out of the sale of alcohol to visibly intoxicated persons or minors who subsequently cause death or injury to third-parties (those not having a relationship to the bar) as a result of alcohol-related car crashes and other accidents. In states where dram shop acts or statutes have been adopted, it has been held that the civil remedies afford under these acts are exclusive.
Tennessee’s Dram Shop Act was enacted in 1986 and is comprised of two sections: T.CA. §§ 57-10-101 and 102. This Act replaced common law and established liability of a commercial seller of alcohol arising out of the sale of alcohol to patrons who subsequently cause injury to third-parties. Section 57-10-101 states the general rule of immunity as follows:
The General Assembly hereby finds and declares that the consumption of any alcoholic beverage or beer rather than the furnishing of any alcoholic beverage or beer is the proximate cause of injuries inflicted upon another by an intoxicated person.
Section 57-10-102 removes immunity if the injured third party demonstrates, beyond a reasonable doubt, that the seller:
(1) Sold the alcoholic beverage or beer to a person known to be under the age of twenty-one (21) years and such person caused the personal injury or death as the direct result of the consumption of the alcoholic beverage or beer so sold; or
(2) Sold the alcoholic beverage or beer to a visibly intoxicated person and such person caused the personal injury or death as the direct result of the consumption of the alcoholic beverage or beer so sold.
The Tennessee Supreme Court, in the case of Worley v. Weigels, 919 S.W.2d 589 (Tenn. 1996), held that the plain language and legislative history of the Act demonstrated a clear, legislative intent to abrogate common law and to limit liability to the two, narrowly stated exceptions in Section 57-10-102. Likewise, in the seminal case of Biscan v. Brown, 160 S.W.3d 462 (Tenn. 2005), the Court stated “[t]he effect of Section 101 is to make it impossible for one who has been injured by an intoxicated person to state a claim for negligence against the person or entity who furnishes the alcoholic beverage or beer because the statute removes, as a matter of law, the required element of causation.” The enactment of Section 101 was a “legislative determination” that persons who furnish alcohol are not at fault for injuries inflicted by an intoxicated person.
If you have any questions about the history of Tennessee’s Dram Shop Act, or its applicability to your business, please do not hesitate to contact me.