Dram Shop Law (Alcohol Liability) in North Carolina: A Primer
The Alcohol Beverage Control Commission (ABC) is a State Government Agency within the North Carolina Department of Commerce charged with providing uniform control over the sale, purchase, transportation, manufacture, consumption and possession of alcoholic beverages. There are special risks involved in selling alcohol to the public. The ABC Commission issues ABC permits, and works with alcohol law enforcement (ALE) officers to enforce the alcohol laws and rules.
In addition to the requirement to uphold the regulations established by the ABC Commission, North Carolina has two primary statutes that are relied upon to impose civil liability against vendors who: (1) sell alcoholic beverages to under age persons; and (2) sell alcoholic beverages to persons who they knew, or should have known were intoxicated at the time of the sale. While the “sale to under aged persons” statute is technically within “North Carolina Dram Shop” law, courts frequently use that name interchangeably when addressing claims brought under either or both statutes, referring to both as dram shop actions.
Sales to intoxicated persons are prohibited in North Carolina
By statute, it is unlawful to knowingly sell alcohol to an intoxicated person. N.C.G.S. § 18B-305(a) is plainly worded and provides: “It shall be unlawful for a permittee or his employee or for an ABC store employee to knowingly sell or give alcoholic beverages to any person who is intoxicated.” While the language of the statute requires a “knowing” sale, i.e., an intentional sale, North Carolina Appellate Courts impose liability where the sale was negligent.
In other words, if the vendor knew the customer was intoxicated at the time of the sale, or in the exercise of reasonable care should have known, the customer was intoxicated, the vendor will be held liable for the harm done to third parties by an intoxicated customer.
It is often a difficult situation when a customer is intoxicated and should not be served any alcohol by the vendor. It is particularly difficult to refuse service to a good customer. However, it is the responsibility which alcohol permittees accept when the permit is issued by the ABC Commission. It is therefore imperative that permittees hold information sessions with its employees in order to discuss the serious nature of serving an intoxicated person, the potential for injury and death which can be attributed to serving an intoxicated person, and the result of potential liability for doing so. Although it is an awesome responsibility placed on permittee employees, especially servers and bartenders, early action on the part of the server and/or bartender may prevent the customer from becoming a problem later.
In the dram shop cases in which Teague Campbell has defended permittees, the issue most frequently litigated is whether or not the vendor should have known the customer was intoxicated at the time of the sale. It has been our experience that the courts will allow all relevant evidence to support an inference of intoxication, including the typical physical manifestations associated with the term: slurred speech, glassy/red eyes, belligerent behavior or behavior shifts, stumbling/tripping, etc. Those “symptoms” are routinely offered as reasonably accepted signs of intoxication. Frequently, this testimony comes from independent witnesses, employees of the vendor, or other customers. Furthermore, in January 2012, the ABC Commission published a quick guide entitled “An Overview of North Carolina’s Alcoholic Beverage Control Laws, Rules and Information.” Within that guide, additional “symptoms” or Signs of Impairment to look for when determining whether an individual is intoxicated and examples are given, including but not limited to:
1. Physical coordination, including spilling, carelessness, clumsiness or unsteadiness, clumsiness with money, unsteady walking, bumping into tables;
2. Behavior changes, including anger, excessive happiness, sullenness or withdrawal;
3. Speech patterns, including individuals who are loud, bragging, arguing, swearing, complaining or have slurred speech.
The law is clear in North Carolina: permittees cannot serve alcohol to anyone who is impaired. The ABC Commission warns that “An intoxicated customer can become a dangerous customer either inside or outside your business.”
Permittees are encouraged to keep note of how many drinks your customers have had and to employ delaying tactics if necessary. It is not unlawful to cut off a customer.
If over serving results in litigation, Blood Alcohol Content (BAC) levels are relevant but not necessarily dispositive, on the issue of intoxication. Litigants on both sides of dram shop cases retain toxicologists to offer opinions on whether a particular BAC level constitutes intoxication. Because that opinion can be speculative and because BAC levels may not necessarily determine whether a person outwardly manifested physical signs of intoxication at the time of sale, expert opinions are always subject to impeachment and attack on cross examination. The lawyers at Teague Campbell can offer suggestions to avoid sales of alcoholic beverages to intoxicated persons, and in addition are available to visit the permittee’s business and talk with the permittee’s employees about preventing sales to intoxicated customers.
Sales to Minors are prohibited in North Carolina
Vendors and individuals are prohibited from selling, giving or otherwise providing alcohol to persons under the age of 21 in North Carolina under N.C.G.S. §18B-302(a) and (a1). Similarly, it is illegal for the underage person to “purchase, possess, or consume” alcoholic beverages. N.C.G.S. §18B-302(b). North Carolina also prohibits “aiding and abetting” the purchase, sale, consumption or provision of alcohol to underage persons, and that law applies across the board to under aged persons and those over 21 years of age.
The statutes also provide a cause of action to those persons who qualify as “aggrieved parties” because of the sale to an underage person. N.C.G.S. §18B-121. Obviously, a person who is directly injured because of the sale (i.e., an innocent driver) qualifies as an “aggrieved party” who can bring a direct claim against the vendor who provided the alcohol to the minor. By statute and case law, the underage person who purchases the alcohol is not an “aggrieved party” and cannot bring a claim against the vendor. However, the parents of an underage child who is injured or dies as a proximate cause of the prohibited sale are aggrieved parties who can maintain a cause of action against the vendor or individual who provided the alcohol.
The law prohibiting sales to underage persons is not a strict liability statute. Rather, the plaintiff must prove the sale was negligent. Unlike the “sale to an intoxicated person” cases, issues regarding burdens of proof and admissibility of certain evidence are regulated, in part, by statute in the cases involving sales to underage persons. N.C.G.S. §18B-122 provides the following key points:
- The plaintiff shall have the burden of proving that the sale or furnishing of alcoholic beverage to the underage person, as defined, was, under the circumstances, negligent;
- Proof of the sale or furnishing of the alcoholic beverage to an underage person, as defined, without the request for identification shall be admissible as evidence of negligence;
- Proof of “good practices” is admissible as evidence that the vendor was not negligent with respect to the sale. By statute “good practices” include, but are not limited to evidence of instruction of employees as to laws regarding the sale of alcoholic beverages, training of employees, enforcement techniques, admonishment to patrons concerning laws regarding the purchase or the furnishing of alcoholic beverages; or the detention of a person’s identification documents in accordance with G.S. §18B-129 and inquiry about the age or degree of intoxication of the person.
Likewise, evidence than an underage person misrepresented his age, or that the sale or furnishing was made under duress is admissible and evidence that the permittee was not negligent;
And finally, the plaintiff must prove that the injury complained of was “proximately caused” by the underage driver’s negligent operation of a vehicle while “impaired.” N.C.G.S. §18B-121(3).
Importantly, the “sale to underage persons” laws provide a statutory limitation on the amount of damages recoverable by an aggrieved party. G.S. §18B-123 provides:
The total amount of damages that may be awarded to all aggrieved parties pursuant to any claims for relief under this Article is limited to no more than $500,000.00 per occurrence. When all claims arising out of an occurrence exceed $500,000.00 each claim shall abate in the proportion it bears to the total of all claims.
This damages cap does not apply to injuries caused due to violations of the “sale to an intoxicated persons” statute.
What can my Business do and how can Teague Campbell help?
As with most personal injury cases, the liability, exposure and outcome of any particular dram shop case depends heavily on the particular facts of that case. However, dram shop cases present unique legal and evidentiary issues that are best handled by attorneys who have experience in litigating this variety of lawsuit. Early witness interviews, expert retention and examination of critical evidentiary issues are important to the evaluation of the claim in the early phases of the lawsuit. Teague Campbell is one of the most experienced law firms in the state in handling dram shop claims and lawsuits. Please contact us if you have questions on the laws governing the sale of alcohol and alcohol liability. We can also visit your business to assist in training employees about preventing sales to intoxicated customers, and go over any other premises liability risk management techniques we can identify specifically for your place of business.
Dayle Flammia has handled numerous alcohol liability cases in North Carolina. He can be reached at email@example.com.
 ABC Quick Guide: North Carolina’s Alcoholic Beverage Control Laws, Rules and Information. NC ABC Commission. http://abc.nc.gov January 2012