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Can Private Clubs Be Sued for Unlawful Alcohol Service Under Texas Law?

  • Last Updated: March 3rd, 2023
  • By: Mike Grossman
  • Dram Shop

Private clubs and country clubs can be held liable for alcohol-related injuries under Texas dram shop law.

When most people think of who can be held liable for accidents that result from alcohol over-service, they usually think of bars, restaurants, and liquor stores. While these may be the most common offenders under the Texas Dram Shop Act, they are not the only ones.

In fact, any provider who has to be licensed by the Texas Alcoholic Beverage Commission (TABC) can be held liable for accidents that result from serving an obviously intoxicated person. One of the most over-looked classes of alcohol providers is private clubs, usually country clubs. These institutions are formed by members of a community and exist by inviting new members to join. Out of pooled membership fees, many of these clubs purchase alcohol, which is consumed by the members and their guests while they are at the club.

Since the members of these clubs are essentially the owners as well, this can place tremendous pressure on the staff that can create a dangerous alcohol serving environment. It is difficult to cut off a person, like the law mandates, when that person is in a position of authority. As a result, many times members are served well past the point where even most bars and restaurants would refuse service, resulting in the potential for very drunk, very dangerous drivers.

In this article, one of Dallas' leading dram shop attorneys, Michael Grossman, explains how the Texas Dram Shop Act can be used to hold private clubs that over-serve alcohol accountable for the damage they cause in the community.

Questions answered on this page:

  • Can an injured person file a Texas dram shop lawsuit against a private club?
  • Do private clubs have social host immunity under the Texas Dram Shop Act?
  • What about the culture and operation of private clubs makes them particularly dangerous?
  • Why do you need an experienced dram shop attorney to pursue a lawsuit against a private club?
  • Can private clubs and country clubs be liable under Texas dram shop laws?

Does Texas law allow for dram shop lawsuits against private clubs?

The short answer to the question is, yes. Under Texas law, country clubs can face the same dram shop liability as a bar or a restaurant. The legal basis for this is found in the Alcoholic Beverage Code, specifically, section 2.01 and 2.02. The latter section allows for a cause of action (grounds for a lawsuit) against an alcohol "provider" who serves an obviously intoxicated patron whose intoxication causes an accident that leads to injuries. Section 2.01 defines a "provider" as follows"

Section 2.01

  • (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.
  • (2) "Provision" includes, but is not limited to, the sale or service of an alcoholic beverage.

In order to serve liquor, the TABC requires that private clubs follow certain licensing procedures. This license, which permits clubs to serve alcohol, is the basis to classify them as providers under Texas law. This means that if a club member or guest who is obviously intoxicated is served alcohol, then the country club can bear liability for any injuries that intoxication causes.

How private clubs differ from social hosts.

Many people will attempt to argue that country clubs cannot be sued under the Texas Dram Shop Act, because they merely serve alcohol, they don't sell it. This is simply not true and is a poor reading of the plain text in the Alcoholic Beverage Code.

Some of this confusion probably arises the fact that social hosts are exempt from dram shop liability unless they serve, or allow the service of someone under the age of 18. A social host is simply someone who is having friends over and provides alcohol. As long as the host does not charge for the alcohol and merely gives it away, it doesn't matter (for lawsuit purposes, it's still immoral) how much a social host over-serves their guests, they face no dram shop liability.

When people say that country clubs do not face dram shop liability they may be incorrectly applying the social host exemption. The key to a country club's liability is that they are required to be licensed by the TABC to serve alcohol. Because of that requirement, country clubs are no different from bars, restaurants, or liquors stores when it comes to dram shop liability, even though they do not charge for alcohol.

What makes country clubs particularly dangerous alcohol providers.

We do not mean to unfairly demonize country clubs. They are certainly not bastions where members are free to get as drunk as they please and then attempt to weave their way home. The problems with country clubs and alcohol service invariably arise because of the unique atmosphere of country clubs.

The clubs are usually staffed by teenagers and young people just out of high school. They're generally the ones serving the drinks. They are trained to provide a pleasant, conflict-free environment to enhance the members' enjoyment of the club. The problem is that with alcohol service, there is often a tension between a patron's desire to consume more alcohol and a server's duty to serve alcohol in a safe manner.

Regardless of the environment, no one likes to be told that they have had too much to drink. Most people who have become intoxicated exhibit poor judgment and feel less intoxicated than they actually are. When that simple fact is combined with a member's desire to enjoy themselves on their terms in a club that they pay thousands of dollars a year for, along with young people who have been trained to be deferential to members, it becomes quite easy to see how over-service results. Many members of a country club's staff just don't feel that they can say no to a member.

This culture, coupled with most country clubs' secluded locations, often far from where the members actually live, means that drunk driving is the inevitable result. Again, this is not to say that country clubs encourage drunk driving, merely that they exist at the confluence of cultural factors that make it more likely to occur.

Another issue which can lead to drunk driving is that country clubs sometimes foster cultures that give the impression that the country club is a place apart from the regular world. When this attitude goes too far it can not only cause problems for the patrons, but for the staff. Since country clubs often employee teenagers and have a supply of liquor that is given away and not sold, it can be quite tempting for young managers or bartenders to slip drinks to even younger staff members while everyone is cleaning up. Unlike service to adults, serving children under the age of 18 does not have the obvious intoxication standard for a dram shop case. Any amount of alcohol that is given to a minor under 18 can result in liability for the country club.

While they are not the first place that springs to mind when people think of drunk drivers, the atmosphere of a country club and contribute to the problem, lead to injuries, and ultimately Texas dram shop lawsuits.

The obstacles to pursuing a dram shop lawsuit against a private club.

While there are some modestly-priced country clubs out there, the fact of the matter is that most clubs cost thousands, or tens of thousands of dollars a year in membership dues. Responsible clubs will have liquor liability insurance to protect themselves from dram shop litigation, while irresponsible clubs will still have enough assets, if not attorneys who are members, to mount a vigorous defense.

Without an experienced attorney on their side, most victims who have been injured by a country club's unlawful alcohol service will not have the means or experience to investigate the club, file a dram shop lawsuit, and pursue the case in court. Without representation they may be tempted to accent a settlement offer for considerably less than the full cost of their injuries, simply because they do not know any better.

In cases where the club does maintain liquor liability insurance, the problems will be magnified since insurance companies are in the business of collecting premiums, not paying out claims. Contrary to popular belief, insurance companies don't have to pay out on a claim just because their client injured someone. Instead, they are only legally compelled to pay after they have been sued and a jury has awarded a victim damages. This means that if the insurance company thinks you won't take them to court, or you can't win in court, they have no real incentive to pay you anything. Many times they will offer ridiculously low settlements just to get you to go away, but they will almost never pay the full cost of a victim's injuries.

Since most liquor liability policies are written for $1,000,000, the insurance company has even more reason to fight. As the insurance money increases, so does the tenacity of the insurance company's defense. This is unfortunate for victims, because the financial problems resulting from a drunk driving accident can be truly devastating. That is why hiring an attorney who can hold the country club and their insurance company accountable is so crucial to and victim of an accident that resulted from unlawful alcohol service.

How Grossman Law Offices Can Help You

The attorneys at Grossman Law Offices are some of the most experienced dram shop attorneys in Texas. For over 25 years we have been holding country clubs, bars, restaurants, and other alcohol providers accountable when their unlawful service leads to injuries or deaths. In that time, we have successfully litigated over 100 dram shop cases. Our firm's experience investigating, litigating, and trying dram shop cases is only rivaled by a very few Texas law firms.

If you've been injured by the unlawful alcohol service of a country club or other private club, you need someone to fight for your legal rights. If you need answers to questions about your case, or would like a free consultation, call Grossman Law Offices at (855) 326-0000. We pick up the phone any time, day or night.

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