Law Against Alcohol

The law hasn’t always been this way. A generation ago, the traditional rule was that a seller of alcoholic beverages would enjoy legal immunity for harm caused by a drunken customer. The prevailing theory held that it was the customer’s voluntary consumption that directly caused the harm. (Cole v. Rush, 45 Cal. 2d 345 (1955).) The Legislature concurred with the case law decisions by declining to enact a law that would permit civil liability in such circumstances. (See Cole, 45 Cal. 2d at 355.) But that rule didn’t last, at least in terms of the common law approach to the problem of drunken drivers.

In 1971 the California Supreme Court rejected the traditional approach when it observed that “this rule is patently unsound and totally inconsistent with the principles of proximate cause established in other areas of negligence law.” The court concluded that a duty of care was owed to the public for the sale of any alcoholic beverage to an obviously intoxicated person. (Vesely v. Sager, 5 Cal. 3d 153, 165–66 (1971).) The Vesely case involved a bartender who served an “obviously intoxicated” customer who later was involved in a car accident.

Five years after the Vesely decision, the state high court broadened the scope of potential liability by applying the Vesely rule in a case in which the liquor was furnished out of state (in Nevada), but the subsequent auto accident occurred in California. (See Bernhard v. Harrah’s Club, 16 Cal. 3d 313 (1976).) The court made clear in Bernhard that it was establishing a common law rule based on the ancient maxim embedded in the Civil Code, namely that “[e]veryone is responsible … for an injury occasioned … by his or her want of ordinary care …” (Bernhard, 16 Cal. 3d at 324; see also Cal. Civ. Code § 1714(a).)

But the court didn’t stop there; it soon extended liability to non-commercial “social hosts,” stating that someone who gives alcohol to an obviously intoxicated guest at a party or gathering knowing that the person intends to drive a vehicle while in an intoxicated state fails to act with reasonable care. (Coulter v. Superior Court, 21 Cal. 3d 144, 153–155 (1978).)

Legislative Response

However, the decisions in Vesely, Bernhard, and Coulter did not sit well with the Legislature, which amended the state’s general negligence statute (Civil Code § 1714, cited above) to reverse the judicial extension of liability. The amendment reinstated the prior rule—created by judicial analysis in cases such as Cole v. Rush, as already noted—that furnishing alcoholic beverage is not the proximate cause of injuries resulting from intoxication. (See Civil Code § 1714(c).)

In addition, the Legislature modified the Business and Professions Code to include new language that reinstated civil liability immunity for a commercial establishment that “sells, furnishes or gives” alcoholic beverages to an obviously inebriated person who then causes injury to themselves or third parties. (Cal. Bus. & Prof. Code § 25602.1.) By its express terms, the new provision granted immunity to licensed providers of alcoholic beverages who furnished alcohol to obviously intoxicated adults, as well as sober minors. It did not, however, extend liability to purely social hosts. (See Cory v. Shierloh, 29 Cal. 3d 430, 440 (1981).)

Further revisions to the code in 1986 broadened the statute to include licensed sellers (and those sellers without licenses who are required by law to be licensed) who provide alcohol to an obviously intoxicated minor. But once again, the Legislature chose not to include social hosts who merely furnish alcohol. (See Ennabe v. Manosa, 58 Cal. 4th 697, at 709.)

Fast forward to 2011, which was when the Legislature again amended the state’s general negligence statute (Cal. Civ. Code § 1714), this time to expressly permit claims against a “parent, guardian, or another adult” who “knowingly furnishes alcoholic beverages at his or her residence” to a person whom the provider knows, or should have known, is under 21 years of age and when the furnishing of the alcohol is the proximate cause of subsequent injury or death. (See Cal. Civ. Code § 1714(d).)

The state Supreme Court did not rule until 2014 that civil liability extends to social hosts who provide alcohol to obviously intoxicated minors when there is an affirmative “sale” of some sort. (See Ennabe, 58 Cal. 4th 697, 722.)

A key question lingers in this convoluted history: What constitutes the “furnishing” of liquor so as to trigger liability?

Judicial Interpretation

Last year the California Supreme Court confronted this very question. In the course of a detailed opinion that traces the history of the various statutory amendments and judicial decisions, the court noted that for social hosts liability exists under section 25602.1 if a person “sells” or “causes to be sold” alcohol to an obviously intoxicated minor. (See Ennabe, 58 Cal. 4th at 709–710.) Stated another way, a social host can retain immunity by simply refraining from charging invited guests for alcoholic drinks. (See Ennabe, 58 Cal. 4th at 722.)

California’s appellate courts also hold that social hosts are not liable for their failure to supervise individuals who drink alcohol at their events. One court noted that if the “failure to supervise” theory of liability was enough to circumvent the social host immunity statutes, “the immunity would be seriously eroded.” The duty of supervision said the court, “is premised upon the need to look after those whose coordination and judgment have been adversely affected by the consumption of alcohol. If allowed, the duty would appear to exist in many if not most cases where alcohol is furnished by social hosts.” (Allen v. Liberman, 227 Cal. App. 4th 46, 55–56 (2014).)

The Allen court opined that immunity holds, for example, if a person fails to lock up the liquor cabinet at a residence to prevent minors from accessing alcohol in their home. (Allen, 227 Cal. App. 4th at 56.)

Affirmative Act

As previously observed, the key to establishing social host liability lies in the word furnish and the parallel phrase causes to be sold. Both seem to require at least some type of affirmative action. (See Ruiz v. Safeway, Inc., 209 Cal. App. 4th 1455, 1460 (2012); Sagadin v. Ripper, 175 Cal. App. 3d 1141, 1157 (1985).)

Accordingly, a person who has control over alcohol and who directs or explicitly authorizes another person to sell it to a clearly drunken minor will be held liable. However, if the person merely provides a room in which alcoholic beverages are sold or provided by others—for example, the owner of a rented vacation property where a party takes place—there is no liability. (See Allen, 227 Cal. App. 4th at 56; see also Leong v. San Francisco Parking, Inc., 235 Cal. App. 3d 827, 833–834 (1991).)

As the published cases indicate, the sale of alcoholic beverages by a social host can include a transaction in which an alcoholic beverage is passed on to another for “consideration.” In this context, consideration can include requiring a cover charge for an event. (See Ennabe, 58 Cal. 4th at 716–717.)

Even so, the concept of a sale of alcoholic beverages does not necessarily apply to every transaction or the entire chain of supply. For example, in one case there was no liability for a grocery store that sold alcohol to a minor who later died in a car crash. In that case, the parents of the minor driver who was killed alleged that a supermarket caused the beer to be furnished when a checker sold beer to the minor driver’s companion. The checker asked for identification, and the friend provided a forged driver’s license and paid for a twelve-pack of beer. The friend then provided the alcohol to the driver, who got drunk and was killed in the ensuing traffic accident. (See Ruiz v. Safeway, Inc., 209 Cal. App. 4th 1455 (2012).)

The court in Ruiz concluded that the supermarket did not furnish the driver with beer because (1) the checker sold the beer to the driver’s companion and not the driver himself, and (2) nothing about the sale amounted to an affirmative act directly related to the driver, or an act that necessarily would have resulted in the companion’s furnishing or giving beer to the driver. (Ruiz, 209 Cal. App. 4th at 1461.)

The view expressed in the Ruiz decision that the term furnishing includes only transfers at the end of the supply chain to the person who actually causes the harm finds support in the statutory text, which uses the phrase “to an intoxicated person” when defining when a “furnisher” is liable. The statutory language suggests that the furnisher would have to have some knowledge of the recipient’s inebriation, thus implying at least some control over who receives alcoholic beverages.

Along the same line of reasoning, a court has held that a beverage manufacturer—separated from the ultimate consumer by a regional distributor and a local retail outlet—does not “furnish” the beverage to an inebriated consumer. (Fiorini v. City Brewing Co., LLC, 231 Cal. App. 4th 306, 318–25 (2014).)