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Dramshop & Alcohol-Related Claims

Historically, taverns and bars were called “dramshops” and the Michigan law involving alcohol liability is almost as antiquated as the name applied to the law. The Michigan Dramshop law makes certain sales of alcohol illegal and allows victims to be compensated for damages caused by an illegal sale. Unfortunately, the law is grounded on a common law assumption that it is not negligent for unlicensed individuals to furnish excessive amounts of alcohol to an adult.

As a result, the dramshop laws are applied only to licensed retail vendors of alcoholic beverages (usually bars or convenience stores, but also, sometimes, wedding receptions and other “events”). It is a statutory criminal offense for unlicensed persons to provide alcohol to underaged drinkers. Nevertheless, most homeowners’ insurance policies exclude coverage for “criminal acts” and therefore there is no practical source of compensation to victims for injuries caused by drunken kids driving away from house parties.

If a homeowner serves too much alcohol to an adult guest, the activity is not “criminal” under Michigan law. It also is not “negligent,” under Michigan law, no matter how egregious the homeowner’s conduct.

In the case of licensed sellers of alcohol, illegal activities include serving a minor, or furnishing alcohol to someone who is already “visibly intoxicated.” The rules involving providing alcohol to a minor are pretty straightforward and allow for few excuses. Even “indirect” furnishing–through an intermediary–is illegal if the licensed vendor was aware of the age of the ultimate purchaser.

On the other hand, the rules involving a sale to an intoxicated person have been “reformed” to an extent that almost eliminates vendors’ responsibility. In the late 1980s, the Legislature decided that bars and taverns would owe no responsibility to the excessive drinker, or his family, if he or she died or was injured as a result of over-consumption. Prior to that “reform,” the dramshop “provider” could be held responsible for a share of the fault in the drunk’s consumption, depending on circumstances. Today, no amount of responsibility can be placed on the licensed provider: the fault is considered to be entirely the drunk’s, regardless of circumstances.

Another basic “reform” that has trapped many innocent families and deprived them of the right to seek compensation was the “name and retain” provision incorporated into the law in the 1980s. To guard against any form of collusion, the dramshop law requires that the victims not settle their claim against the drunk prior to suing the at-fault alcohol provider: the “drunk” must be maintained as a defendant throughout any litigation. If the at-fault drunk’s insurance company makes a settlement offer and the victims accept it–even in a court-approved mediation or case evaluation, the tavern will probably be dismissed by the court, without regard to the victim’s intent or circumstances.

The reform statute also requires the victim family to give written notice to any potential illegal providers of alcohol within a certain number of days of hiring an attorney. Failure to give this notice within the statutory time period results in a dismissal of any subsequent claim, regardless of its merits.

When the so-called “Engler Majority” controlled the Michigan Supreme Court early in this century, it issued a number of rulings that further circumscribed who could sue and what could be recovered. The most significant of these rulings excluded blood alcohol evidence from toxicologists when offered to prove “visible intoxication” in many cases. For the past forty years, victims’ families had been allowed to demonstrate that a drunk would have shown visible evidence of intoxication, based upon the level of alcohol in his blood at the time of the illegal sale.

If the family had access to blood testing of the alleged drunk and could prove his drinking history, they could establish with expert testimony whether his intoxication would have been “visible” through slurred speech, bloodshot eyes, boisterous or belligerent behavior, loss of coordination, and other trademark signs and symptoms of alcohol consumption. Alcohol sellers are obligated to train their servers to recognize these symptoms and to withhold alcohol from intoxicated patrons. The legislation governing alcohol testing of motorists was even amended by the Michigan Legislature to allow victims’ families to introduce a drunk’s test results in a civil action.

The Engler Majority reversed these holdings, however, and excluded expert toxicology testimony based on the drunk’s blood alcohol level, unless the intoxication was confirmed by an eyewitness. In other words, a neutral expert cannot confirm that a drunk was in fact drunk when he was last served at a bar or convenience store–even if his blood alcohol is sky-high, unless the victim’s family can also provide the testimony of an eyewitness to the sale. Not surprisingly, most servers and convenience store clerks won’t admit to an illegal sale (if they even remember it), and most drinking companions or “regulars” from one stool over, also won’t “rat out” their neighborhood tavern. Unless the drunk was drinking in the company of unrelated companions who weren’t close friends, it is almost impossible to provide the corroborating testimonial evidence required by the Engler Majority. As a result, numerous drunk-driving fatalities resulting from illegal sales to clearly-intoxicated individuals have gone uncompensated, despite clear statutory language requiring that the victims’ families be made whole.

If the victims’ families stand any chance of achieving a fair outcome, their claim must be investigated thoroughly and early, while the scope of the tragedy is fresh in the minds of participants and observers. On some occasions, usually involving auto fatalities, the criminal investigation by police will provide a sound foundation for the victims’ civil investigation and notice.

In a minority of situations, alcohol consumption liability may also result from other circumstances surrounding how it was “furnished.” For example, employment activities where alcohol consumption is encouraged may create exposure on the part of the employer. In this kind of situation, the liability of the employer is based upon the master-servant, or principal and agent employment relationship, rather than focusing on the legality of the alcohol provision.

Michigan courts have also refused to allow compensation to anyone who was complicit in the drunk’s intoxication. For example, if a drinking companion purchased any of the alcohol consumed by the drunk and is subsequently injured on the ride home, he and his family are denied access to the courts, as well.

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