Bar Liability in Drunk Driving Accidents

The Dram shop law provides a statutory remedy for victims. But what about common-law claims for negligence? A recent decision by a federal appeals court, Mesa Underwriters Specialty Co. v. Secret’s Gentleman’s Club, suggests that businesses that serve liquor may be held responsible if they fail to stop a severely intoxicated customer to drive away. Furthermore, this liability exists independently of any obligation not to serve a drunk customer under the Dram shop law.

This case arose from the tragic death of a 22-year-old woman, Desiree Snyder, on I-480 in Cleveland. At the time, Snyder was a passenger in a vehicle struck by another man who was intoxicated and driving on the wrong side of the highway. As it turned out, the drunk driver had a blood-alcohol content of approximately 0.265 percent, more than three times the legal limit in Ohio.

In a criminal proceeding, the drunk driver pleaded “no contest” to aggravated vehicular homicide. A Cuyahoga County judge sentenced the driver to 15 years in prison.

Snyder’s family then sued the strip club where the driver had been drinking just prior to the fatal crash. Of note, the family chose to dismiss its Dram shop claim against the club and instead argued common-law negligence. The case was tried in Cuyahoga County court before a judge sitting without a jury. In September 2016, the judge ruled in favor of the family.

In brief, the judge determined that the club “had a common law duty to prevent foreseeable harm to others, including to Desiree Snyder.” The club failed in this duty. The judge noted that the driver was ejected from the club after he assaulted a dancer. In fact, the driver was “physically brought to” management and detained for a period of 15-20 minutes before he was allowed to leave the premises in his car. Given the driver’s level of visible intoxication–not to mention the fact he’d just attacked an employee–the club was therefore negligent. Under these circumstances, the judge said that management should have called the police.

The judge ultimately awarded the family over $8 million in damages. This led to a second lawsuit–the subject of the federal appeals court decision–between the strip club and its insurance company. The insurance company sought a declaration that it was not liable to cover the $8 million state court judgment. But the federal courts ruled against the insurer. According to the U.S. Sixth Circuit Court of Appeals, the federal courts had no grounds to second-guess the judgment of the state court, and the language of the insurance policy did not clearly exclude claims for “common-law negligence,” only those brought under the Dram shop law.