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Texas Dram Shop and Social Host Liability

© 2014 Mark Courtois

These types of claims arise out of injuries caused by an intoxicated person. Dram shop generally refers to causes of action related to selling and serving alcohol under the authority of a state license or permit. Social host refers to causes of action related to the provision of alcohol to guests by a social host.

Under Texas law, no cause of action is permitted in the social host context because Texas Courts have long held that a social host has no duty to prevent someone from drinking and driving. Schlumberger Tech. Corp. v. Arthey, 2014 Tex. LEXIS 502, *1, 57 Tex. Sup. J. 840 (2014); Smith v. Merritt, 940 S.W.2d 602, 607-08 (Tex. 1997); Graff v. Beard, 858 S.W.2d 918, 920 (Tex. 1993). Although, a negligence claim may exist against an employer who affirmatively exercises control over an incapacitated employee, for example an intoxicated employee, and does not use ordinary care to prevent the employee from causing an unreasonable risk of harm to others. Otis Eng'g Corp. v. Clark, 668 S.W.2d 307, 311 (Tex. 1983).

The Texas Dram Shop Act was enacted to deter providers of alcoholic beverages from serving alcoholic beverages to obviously intoxicated individuals who may potentially injure themselves and others. FFP Operating Partners LP v. Duenez, 237 S.W.3d 680, 583 (Tex. 2007). The Act provides a statutory cause of action against a provider of alcohol under certain situations. Providing, selling, or serving an alcoholic beverage may be the basis of a cause of action against the provider if: 1) at the time the provision occurred it was apparent to the provider that the individual being sold, served, or provided with an alcoholic beverage was obviously intoxicated to the extent that he presented a clear danger to himself and others; and 2) the intoxication of the recipient of the alcoholic beverage was a proximate cause of the damages suffered. Tex. Alco. Bev. Code Ann. § 2.02(b). A Provider is defined in the Act as a person who sells or serves an alcoholic beverage under authority of a license or permit issued under the terms of the Alcoholic Beverage code or who otherwise sells an alcoholic beverage to an individual. Tex. Alco. Bev. Code Ann. § 2.01. Provision includes, but is not limited to, the sale or service of an alcoholic beverage. Id.  The action of a provider's employee in serving a minor or intoxicated individual shall not be attributable to the employer if: 1) the employer requires all employees to undergo a training program approved by the TABC; 2) the employee who served a minor or intoxicated person actually attended the program; and 3) the employer has not directly or indirectly encouraged the employee to violate the law. Tex. Alco. Bev. Code Ann. § 106.14.

The Act also makes actionable claims for damages against any adult 21 and over who: 1) knowingly serves or provides alcohol to a minor that contributed to a minor's intoxication, or 2) knowingly allows the minor to be served or provided any of the alcoholic beverages that contributed to the minor's intoxication on premises owned or leased by the adult. Tex. Alco. Bev. Code Ann. § 2.02(c). The adult must not be the intoxicated minor's parent, guardian, or spouse, or have legal custody of the intoxicated minor for there to be a claim. Id.