How Dram Shop Law Works in Texas

Essentially, Texas Alcoholic Beverage Code Ann. §2.01 states that a person who is licensed to sell or serve alcohol in Texas (a "provider") may be held liable for damages if it was evident that the individual being served was intoxicated to an extent that he presented an obvious danger to himself and others.

The Texas Dram Shop Act enables people to sue bars and other alcohol-serving establishments when over-served patrons cause damages.

Despite the fact that drunk driving has been a plague on Texas highways for as long as cars have been around, until a little less than 30 years ago, there was no way for victims of drunk driving accidents to sue bars that over-served patrons.

Without getting into the legal minutiae, accidents were considered the fault of the person who drank too much until the landmark Texas Supreme Court decision in El Chico v. Poole (1987), changed that, creating a cause of action for those hurt in these accidents to seek compensation from bars.

Since El Chico v. Poole simply established that bars could be sued, without creating any specific criteria by which a bar could be held liable, the Texas Legislature feared that this would create a free-for-all with lawyers suing bars for any perceived infraction of the law. They quickly responded by passing the Texas Dram Shop Act, which accomplished two things: First, it stated in definite terms what a bar can and cannot be sued for, and second, it made a dram shop cause of action the sole remedy against bars, thereby nullifying the aforementioned Texas Supreme Court decision.

In this article, our attorneys explain the effect of the Dram Shop Act in Texas and breaks down what the law says about over-service of patrons. For a more comprehensive explanation of the basic ins-and-outs of Dram Shop law in general, be sure to click over to our article How Dram Shop Cases Work.

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What Does the Texas Dram Shop Act Say About Suing Bars?

The relevant portion of the Texas Dram Shop Act, which gives those injured by unlawful alcohol service the right to sue licensed alcohol providers that over-serve patrons reads as follows:

Sec. 2.02. CAUSES OF ACTION. (. . .)

• (b) Providing, selling, or serving an alcoholic beverage may be made the basis of a statutory cause of action under this chapter of this code upon proof that:
  • (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.

In plain English, this portion of the Texas Dram Shop Act sets up the three conditions required before an injured person can pursue a case against a bar:

1. The establishment must have served an obviously intoxicated person.
2. The intoxication of the illegally served patron must have been the proximate cause of an accident.
3. Injuries or death, and the civil damages associated with them, must have resulted from that accident.

It is only when all of these conditions are met that a person can pursue a dram shop lawsuit against a bar. While some might disagree with the idea of being able to file suit against a bar at all after a drunk driving crash, because after all (they reason) it is the person who drank too much that should be responsible, there are a couple of things to keep in mind.

To be clear, the Texas Dram Shop Act does not remove the drunk driver's liability for injuries that they cause to third-parties. If a guy gets drunk at a bar and plows into a minivan carrying a family, the family has just as much a right to go after the drunk driver financially as they did before it was passed. At the same time the law helps provide a remedy for what was, until El Chico v. Poole, an inconsistency that left many victims with no recourse against a negligent bar that contributed to their losses.

It has been illegal for ages in Texas to sell alcohol to a person who was already drunk. Before the Texas Dram Shop Act passed, there was no civil remedy for those harmed by the actions of bars that broke the over-service law.

In short, a bar could break the law, and, while they may have received a trivial fine from the Texas Alcoholic Beverage Commission, they could tell the victims who were injured by their over-service, Whatever, there's nothing you can do to us. The changes to the law meant that bars now had some civil liability for what was, and still is, an illegal behavior.

Does the Texas Dram Shop Act Only Apply to Bars and Restaurants or Can You Sue Individuals?

The relevant law to answer this question is found in Section 2.01 of the Alcoholic Beverage Code:

(1) "Provider" means a person who sells or serves an alcoholic beverage under authority of a license or permit issued under the terms of this code or who otherwise sells an alcoholic beverage to an individual.

The crucial part of the definition of an alcohol "provider" is that the alcoholic beverage must be sold. This typically excludes what are called "social hosts," most commonly people having parties within their own homes among friends. While it is still morally wrong for them to over-serve their guests, unless they charge admission to their parties, or charge money for their alcohol, they cannot be sued under a dram shop cause of action.

One mistake that attorneys who are not familiar with dram shop lawsuits make when they come across this section of the law is that they misread it as saying that only licensed providers can be sued in a dram shop lawsuit. While it is a reasonable misreading, it is inaccurate nonetheless. Again, the crucial factor for determining liability is whether or not the defendant sells alcohol.

Dram Shop Lawsuits Are the Exclusive Remedy for Alcohol-Related Injuries

Section 2.03 of the Alcohol Beverage Code holds that:

• (a) The liability of providers under this chapter for the actions of their employees, customers, members, or guests who are or become intoxicated is in lieu of common law or other statutory law warranties and duties of providers of alcoholic beverages.
• (b) This chapter does not impose obligations on a provider of alcoholic beverages other than those expressly stated in this chapter.
• (c) This chapter provides the exclusive cause of action for providing an alcoholic beverage to a person 18 years of age or older.

In a nutshell, this section makes it clear that dram shop lawsuits are the only way for victims of unlawful alcohol service to recover damages for their injuries. This means that when it comes to alcohol-related injuries, this is the only applicable law. It means that gross negligence causes of action, which penalize folks who do something completely insane that shocks the senses, and premises liability claims, do not apply in any case where the over-service of alcohol is alleged.

The exclusive remedy provision matters, because the threshold that bars have to meet to avoid being sued is so low. Basically, as long as they don't serve already intoxicated people, they can indirectly cause as much chaos as they like and not face any consequences. In this way, one can see that the Texas Dram Shop Act really was a compromise between those who wanted to have open-season on every kind of misconduct that a bar could engage in when serving alcohol, and bars, who wanted to avoid having any liability for their bad behavior.

How Does the Texas Dram Shop Act Treat Minors and Juveniles?

It's also worth noting that everything we have covered applies only to purchasers of alcohol over the age of 18. For those under 18 there are a totally different set of rules (in Section 2.02). They read as follows:

(c) An adult 21 years of age or older is liable for damages proximately caused by the intoxication of a minor under the age of 18 if:

• (1) the adult is not:
  • (A) the minor's parent, guardian, or spouse; or
  • (B) an adult in whose custody the minor has been committed by a court; and
• (2) the adult knowingly:
  • (A) served or provided to the minor any of the alcoholic beverages that contributed to the minor's intoxication; or
  • (B) allowed the minor to be served or provided any of the alcoholic beverages that contributed to the minor's intoxication on the premises owned or leased by the adult.

The basic takeaway here is that all of the exceptions defendants in other dram shop cases are permitted to take advantage of do not apply to adults who serve minors when those minors injure themselves or others. The social host exemption: gone. The Safe Harbor defense, often called the "silver-bullet" defense of alcohol establishments (although not to our firm): worthless. Even the requirement that the patron being served be "obviously intoxicated" goes right out the window when the patron is not 18.

Whatever protections that bars, restaurants, other alcohol providers enjoy when they serve adults who are old enough to make a mature decision about drinking are obviously not meant to apply when they serve children. For this reason, the law treats those who engage in this behavior much more harshly.

One may notice that the threshold is 18 and not 21. This may strike some as odd, since it is illegal for those under 21 to purchase alcohol lawfully, yet 18 to 20 year olds are treated just the same as adults who can legally purchase alcohol. An educated guess as to why the law was written to treat those in this age group in the same way as those who are over 21 is that not doing so would cause another discrepancy to arise in the law.

To wit, if someone is 18 and they choose to illegally purchase alcohol, they are an adult who is breaking the law, whereas those under 18 are obviously children, at least for legal purposes. In effect, if the standard applied equally to everyone under the age of 21, you would be rewarding young adults for breaking the law by having a lower standard to prove their dram shop claim than those who are actually of drinking age.

This would mean that those adults would have special rights, unavailable to other adults that were actually following the law when they purchased alcohol. In effect, legislatures chose the small discrepancy that is treating everyone over 18 as an adult, versus the bigger problem of granting special privileges to 18-20 year old drinkers who were breaking the law.

Grossman Law Offices Has Won More Dram Shop Cases Than Almost Any Other Firm in Texas

When we say that Grossman Law Offices has pursued and won more dram shop cases than almost any other law firm in Texas, we're not saying it to brag. We point this out because getting compensation for victims injured by crashes due to unlawful alcohol service is very important to us. One would think that in the early 21st century, bars, restaurants, liquor stores, and every other alcohol seller would realize the danger that their product creates for the community when served improperly. Sadly, far too many bad actors continue to make their livelihoods in ways that endanger entire communities, give honest merchants a bad name, and cause untold tragedy in our communities.

For the past 25 years, the attorneys at Grossman Law Offices have not only helped the victims of alcohol over-service seek the compensation they deserve under the law, so that they can begin to put their lives back together after a tragic, senseless accident. We have also helped send a message on behalf of our fellow Texans that alcohol providers' days of making money while endangering the community are over. If a bar or other vendor over-serves an intoxicated person and a tragedy results, our team of attorneys stands ready to help the victims hold them accountable.

We're one of the few firms that actually understands the importance of seeking compensation for those involved in Dram Shop cases. Most attorneys will turn you away or say that Dram Shop cases are unwinnable. That is simply not true. We've won hundreds of cases and held negligent establishments accountable to their victims. Call us today at (855) 326-0000 to find out how we can help you.

Related Articles for Further Reading:

• Who Can Bring a Dram Shop Claim Against a Bar?
• What Is a Third-Party Dram Shop Case?
• Holding Baseball Stadium Vendors Accountable for Over-Serving Alcohol