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By: Erin E. Lamb
The Pennsylvania Supreme Court has rejected an attempt to upend long-standing Pennsylvania and common law by declining to extend liability for service of alcohol to visibly intoxication people to any person. The argument made by the Plaintiff in Klar v. Dairy Farmers of America, Inc., a Corporation, and Roger J. Williams, an Individual, No. 29 WAP 2022, J-14-2023, Pa. 2023 would have rendered each and every person in the Commonwealth, regardless of whether they are in the business of selling alcohol, that serves, procures, hands to, or even provides access to alcohol to a visibly intoxication person, or does not prevent a visibly intoxicated person from drinking alcohol liable under both the Dram Shop Act and common-law negligence for damages caused by that intoxicated person. The Supreme Court took the opportunity to reiterate the Commonwealth’s commitment to the protection of social hosts from such liability and to forcefully rebuff attempts to expand any form of liquor liability to individuals who are not in the business of legally or illegally selling alcohol. See Klar v. Dairy Farmers of America, Inc., a Corporation, and Roger J. Williams, an Individual, No. 29 WAP 2022, J-14-2023, Pa. 2023.
The Dairy Farmers of America, Inc (DFA) held a golf outing for its employees at a golf course in Mercer County, Pennsylvania. To offset “costs and expenses”, employees were required to provide a “monetary contribution”. Id. at 2. Roger Williams paid DFA and attended the outing. Willaims drank at the outing, left in his vehicle, and soon after swerved across the center line and into David Klar, a motorcyclist. Williams’ blood alcohol level was 0.23%, or nearly three times the Pennsylvania legal limit. Id. Klar sued both Williams and DFA for liability for his “numerous and grievous injuries.” Id. The trial court granted DFA’s Motion for Judgment on the Pleadings. The Superior Court affirmed that decision, and Klar appealed to the Supreme Court.
Klar alleged that DFA on violated the Pennsylvania Dram Shop Act and committed common-law negligence. Id. at 11. DFA countered that it was not a licensee under the Liquor Code, and “that it did not take on ‘licensee status’ by virtue of the funds it collected to pay for the golf outing, and it was instead merely a ‘social host’ that was not responsible for the actions of its guest.” Id. at 3. Klar argued that the language of the Dram Shop Act “facially applies” to a broad range of people, and not to just licensees, because the Act “prohibits ‘any licensee or the board… or any other person, from selling, furnishing, or giving alcohol to a visibly intoxicated person.” Id. (emphasis in original). Klar argued DFA was or had become “any other person” and was therefore subject to the Dram Shop. Id.
The question of to whom the Dram Shop Act applies was first decided by the Pennsylvania Supreme Court in Manning v. Andy, 310 A.2d. 75 (Pa. 1973). The Klar Court characterized that decision as finding that, “’[o]nly licensed persons engaged in the sale of intoxicants have been held to be civilly liable to injured parties,’ and rejected the imposition of Dram Shop liability upon ‘nonlicensed persons’ who ‘furnish intoxicants for no remuneration.’” Id. at 4. Klar distinguished his claims from Manning first by claiming DFA received renumeration by receiving the contributions to offset the costs and expenses Id. The trial court felt, and the Supreme Court agreed, that “Klar had at least plausibly suggested that DFA’s collection of funds from its employees could constitute a ‘sale’ of alcohol or the receipt of ‘renumeration’ for it…. [t]he trial court reasoned that ‘collective action to purchase alcohol presents a problem of consistency’ with the proposition that social hosts are not exposed to liability.” Id. The trial court found that the pooling of the resources by DFA was more akin to “friends sharing a meal and a drink” than to the “unlicensed commercial sale of alcohol,” and DFA was not subject to the Dram Shop Act. Id. The Superior Court agreed, and “…effectively ‘held that the statutory phrase ‘any other person’ did not encompass non-licensees.’” The Superior Court also held that the DFA “’did not assumed licensee status’ by virtue of its receipt of funds from its employees.’” Id. at 7.
Klar argued to the Supreme Court that his claims were not counter to Manning because the DFA received renumeration and their “motivations were not purely social, inasmuch as it also sought to advance its interests as a ‘commercial enterprise’ – that is to ‘ingratiate’ itself with its employees.” Id. at 13.
In ruling against Klar, the Supreme Court refused to “interpret ‘any other person’ to include all non-licensees in all circumstances” and further “reject[ed] his suggestion as inconsistent with Manning and we decline to disturb Manning’s holding in that regard.” Id. at 23. The Court emphasized the importance of stare decisis. The Court also noted that the Pennsylvania General Assembly had 50 years to amend the Dram Shop Act to overrule the Manning decision and has not done so. See Id. at 24-25. Their inaction invoked “the doctrine of legislative acquiescence” which “carried significant weight.” The Court emphasized that expanding Dram Shop Act liability to regular citizens and not merely to “purveyors” of alcohol would be a “decision of enormous magnitude” and “…we conclude that this is another reason to reaffirm Manning’s rejection of the expansive, open-ended interpretation of ‘any other person’.” Id. at 26.
The Court disposed of the argument that the DFA received “renumeration” by placing the term (which does not appear in the Dram Shop Act) within the “context” of the “scenario” Manning laid out. Id. at 27. “…[W]hat Manning meant by ‘renumeration’ relates to the word it emphasized vis-à-vis licensees: ‘sale.’” Id. (emphasis in original). “We conclude that the renumeration… is the receipt of payment for the commercial or quasi-commercial sale of alcohol with the intent to repeat a profit.” Id. at 28.
The Court also hypothesized the identity of “any other person.” Id. For licensees, “any other persons” would encompass “bartenders who give free drinks to a visibly intoxicated patron.” Id. For non-licensees, they would become “any other person,” and be subject to Dram Shop Act liability, “by engaging in the unlawful commercial or quasi-commercial sale of alcohol.” Id. at 29. Applying those principles to the case at hand, the Court found that DFA, a non-licensee, had not received renumeration. The Court noted that Klar never claimed “that the DFA collected the funds from its employees in order to profit from the sale of alcohol” and the “facts pleaded in no way suggest that… DFA sought to enter the liquor trade.” Id. The Supreme Court emphasized that “[T]here is a distinction, both in law and common sense…” between “…a social host who collects a few dollars from his or her guests as reimbursement for the party’s expenses” and “a person who sets up a booth on the sidewalk to sell shots of liquor to passerby. The Court affirmed the lower court’s holdings that DFA is not subject to the Dram Shop Act. Id. at 30.
Klar also claimed common-law negligence applied. Klar asked that the Court overrule long-standing precedent and extend common-law negligence liability to all “furnishers of alcohol to visibly intoxicated persons”. The Court rejected that attempt and reiterated the holding of Klein v. Raysinger, 470 A.2d 507, 510 (Pa. 1983). The Klein decision “refused to extend common-law liability to social hosts.” Id. at 34. Klein revolved around “proximate cause.” Id. at 35. The Klein Court stated that “the great weight of authority supports the view that in the case of an ordinary able bodied man it is the consumption of the alcohol, rather than the furnishing of the alcohol, which is the proximate cause of any subsequent occurrence.” Id. at 35 quoting Klein at 510. Klar argued that Klein was wrong, and “an intoxicated person is not competent to determine whether to cease drinking, and that the responsibility to prevent such overindulgence therefore lies with the alcohol’s provider.” Id. at 36. The Klar Court stated, “Common experience teaches otherwise,” and declined to overrule Klein. Id. at 37. The dismissal of Klar’s claims against DFA were affirmed. And Pennsylvanians already envisioning their Super Bowl parties can breathe a little easier.