NEW OHIO SUPREME COURT DRAM SHOP DECISION

in Business, Employment, Insurance, News

The Ohio Supreme Court decided the Dram Shop Act case on Wednesday, September 6:

Johnson v. Montgomery, Slip Opinion No. 2017-Ohio-7445

Basically, it applied the protections of the Dram Shop Act to liquor permit holders even when they encouraged the club’s exotic dancers to drink, did not keep track of how much they drank, and let the one in question drive home drunk.

The dancer caused an accident that seriously injured two people in another car. According to the unusually stinging dissent, the one victim had over $1 million in medical bills and permanent physical deformities as a result of the accident.

Nonetheless, in a 6-1 decision, the Ohio Supreme Court affirmed the Court of Appeals’ vacation of a $2,854,645.55 jury verdict, finding that the accident victims had no viable cause of action against the permit holder because there was no evidence the club “knowingly” sold alcohol to a “noticeably intoxicated” person – in this case a dancer who admitted that she was drunk.

The facts were bad – the club encouraged the exotic dancers to drink and patrons to buy drinks for them. The club charged more for drinks bought for the dancers. The club generated 95 percent of its revenue from alcohol sales and the dancers consumed 35 to 40 percent of all alcohol sold by the club. The club allowed and encouraged its security guards, its bartenders and its wait staff to drink at work. The club did not limit the amount of alcohol a dancer could drink and did not keep track of it.

The Court ruled that the injured victim also could not sue the liquor permit holder under a negligence theory – because the Dram Shop Act precludes common law claims against liquor permit holders. All claims, against liquor permit holders, arising from alcohol sales to persons who then injure a third party, are subject to the Dram Shop Act’s strictures, which only allow liability when the permit holder “knowingly” sells alcohol to a “noticeably intoxicated” person.

The case is a stark reminder of what the dissent calls an “absurdly high burden of proof on Dram Shop Act claims * * *.” It is also a case where the liquor permit holder’s business model and practices would seemingly make the average person cringe – but the Court applied the statute’s plain wording – despite the club’s outrageous business model and practices. The Court said that it was applying the statute’s language plainly – and that if people had problems with the statute, then “* * * that fight belongs in the General Assembly.”

If you have any questions about this topic, feel free to contact John Farnan or your Weston Hurd attorney.

Link to Johnson v. Montgomery, Slip Opinion No. 2017-Ohio-7445

Contact

John G. Farnan

Weston Hurd LLP

1301 East 9th Street, Suite 1900

Cleveland, OH 44114-1862

216.687.3288

jfarnan@westonhurd.com