U.S. Dram Shop Liability At Sea - Recent Developments

August 2000

An article in ''Sea Venture'' Vol.18 considered the state of the law as it applies to a shipowner's Dram Shop liabilities. Courts have generally followed the Meyer v. Carnival case which said that in the absence of a maritime dram shop rule the applicable State's law should apply. The majority of states provide a qualified immunity to the seller of alcohol, albeit that in some instances there is an exception where the alcohol has been sold to an obviously intoxicated minor or a person habitually addicted to alcohol.

However, there have been two recent District Court decisions which have the potential to erode the dram shop immunities previously reported.

In Young v. Players Lake Charles(District Court of Texas) the plaintiffs' decedents sustained fatal injuries when their vehicle was struck by another vehicle driven by a motorist on a highway. The motorist had been drinking on a casino boat owned by defendants in Lake Charles, Louisiana. The defendants argued that Louisiana law governed the action, and sought dismissal on the grounds that Louisiana's Dram Shop Law insulated providers of alcohol from liability for the actions of those to whom they sell or serve alcohol.

The court acknowledged that in the absence of a maritime law on this particular subject, they needed to determine whether it should fashion such a rule or instead apply existing State Law. The court viewed the issue as follows:

''Did defendants have a duty toward plaintiffs, did defendants breach that duty, and was there a causal connection between defendants' breach and plaintiffs' injury? According to …… the general maritime law …….plaintiffs are owed a duty of ordinary care. If a defendant fails to exercise ordinary care and the resulting harm was reasonably foreseeable, liability arises. There is nothing inherently complicated about this rule as it relates to dram shop liability''.

In essence, the court concluded that there was an existing maritime rule governing the issue of dram shop liability and that it was contained within the defendants' duty to exercise reasonable care.

Recently, in Bay Casino v. Royal Empress (Eastern District of New York) the court cited the Young case, similarly declined to apply a state Dram Shop Law and instead ruled that substantive federal maritime law was applicable.

In this instance a minor became inebriated as a passenger on a day-cruise and was then deposited on shore by shipboard personnel. He subsequently drove a car which was involved in an accident causing bodily injuries to a number of passers-by who filed the action.

The courts in both of the above-mentioned cases have cast doubt on the viability of the rule enunciated in a body of cases (and especially in the leading case of Meyer v. Carnival Cruise Lines) that courts exercising admiralty jurisdiction should apply state Dram Shop Laws as the rule of decision. More significantly, the court rulings in both Youngand Bay Casinoare a rejection of any concept of immunity, qualified or otherwise, for sellers of alcohol on vessels when sued by someone injured as a result of the intoxication of a person to whom the alcohol was provided. It would appear that vessel owners and operators can no longer feel safe simply by avoiding serving alcohol to ''minors'', ''obviously intoxicated persons'', or any others to whom State Dram Shop Laws provide an exception to immunity.

While the Meyergenre of cases does remain intact, the Young and Bay Casinorulings do suggest some erosion of what had previously been thought to have been a settled area of law.