New York Dram Shop Laws

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 What Are Liquor Licenses?

Liquor laws are laws that govern the consumption and sale of alcoholic beverages. Liquor laws may vary, even by region, within the same state.

One example of this is how the sale of alcohol in business zones is highly regulated. In addition, the sale of alcohol can be prohibited on Sundays or during certain times of the day in certain states.

In general, liquor laws govern the following issues:

  • Who can sell alcoholic beverages;
  • Who can buy alcoholic beverages;
  • Where liquor is permitted to be sold and at what times it can be sold;
  • Drinking and driving, or DUI laws, in addition to other crimes, for example, open container laws;
  • Issuing liquor licenses, as well as licenses to serve alcohol; and
  • Alcohol consumption at bars and other alcohol-centered venues.

Liquor licenses are specific documents that allow businesses to sell or to serve alcoholic beverages in the state where they are located. Liquor laws are strictly regulated by:

  • The federal government;
  • State governments; and
  • Local governments.

Liquor licenses include permissions related to:

  • The cost of beverages;
  • Where alcohol can be sold;
  • How much alcohol can be sold;
  • Who can buy alcohol; and
  • When alcohol can be served.

The process for obtaining a liquor license is very extensive, time-consuming, and may be expensive, depending on where an individual is opening their business. This is done to try and reduce fraud.

In addition, towns and cities frequently limit the number of establishments that are not able to use these licenses at one time. This is referred to as a quota.

What Is a Dram Shop Act?

Dram shop acts or laws are laws that place liability on drinking establishments for serving alcohol to individuals who are already obviously intoxicated. Business institutions, including bars, pubs, and taverns may be held liable for damages to third parties who are injured as a result of the sale of alcohol.

The majority of dram shop laws also make it illegal to serve alcohol to minors who are intoxicated. It is important to note that dram shop laws by state may be different, as not all states have dram shop acts and those that do vary widely.
Dram shop laws may also, in some cases, apply to social hosts. These laws are intended to put responsibility on those who profit from the distribution of alcohol.

Dram shop laws also provide incentives to owners of alcohol establishments to develop responsible service policies and to properly train employees to refuse alcohol sales. States vary regarding who is held liable when an intoxicated guest, patron, or minor causes injuries to themselves or to other individuals.

States that impose a dram shop laws vary in terms of how they use terms and define terms, for example:

  • Intoxication;
  • Guest or patron;
  • Sales; and
  • Retailers.

One thing that is similar among the states with dram shop laws is the application of the obvious intoxication test. This means that employees or retailers knew or should have known that the patron was considerably intoxicated and, therefore, more alcohol would cause danger to themselves or to others.

States that do not have dram shop liability include:

What Does New York’s Dram Shop Law Cover?

The State of New York’s dram shop laws are found in Section 11-101 of the New York General Obligations law. Under this law, it is illegal for a business to serve alcohol to individuals who are visibly intoxicated.

The definition of what is visibly intoxicated is largely left to the discretion of the employee who is serving the alcohol. Signs of visible intoxication may include:

  • Slurred speech;
  • Bloodshot eyes; and
  • A lack of physical coordination.

The State of New York is unique because patrons themselves are not permitted to sue the business establishment. Instead, a tavern or bar may be held liable for damages that are caused to third parties who were injured by the patrons of a bar who were served alcohol.

For example, if a bar serves an individual alcohol, then that individual drives away and injures another individual in a car accident, the individual that was injured may sue the bar for recovery. The dram shop laws in the State of New York will hold the bar liable if the patron injures a pedestrian.

The damages in these cases are not limited to a vehicular accident but may include an incident where a patron engages in a fight or attacks an innocent bystander. Employees are also prohibited from serving alcohol to individuals who are known to be habitual drunkards.

Under New York’s dram shop liability law, it is against the law to sell alcohol to individuals actually or apparently under the age of 21 and to individuals who are visibly intoxicated. Courts in the state will allow recovery for injuries that are caused by individuals who sell alcohol in violation of these laws.

What Takes Place if Alcohol Laws Are Broken?

Businesses are required to follow several laws and rules in order to obtain a liquor license. For example, it must maintain and renew its liquor license regularly.

Without a proper license, serving or selling alcohol may result in business loss and, in certain cases, jail time. A business may be required to pay extra fees when it renews its liquor license.

Examples of how liquor laws may be broken include, but are not limited to:

  • Selling an alcoholic beverage that is not permitted by the liquor license;
  • Selling alcohol to an underage person;
  • Bartenders overserving customers;
  • Allowing an open container to leave the premises; and
  • Allowing employees to consume excessive amounts of alcohol after their shift.

Official accusations inform the proprietor of the laws they broke are provided to businesses when they violate the conditions of their liquor license. Owners are also required to attend hearings with the state’s alcohol-controlling official.

A court will determine if the license conditions were broken and whether corrective measures should be taken. If the business is found to have broken its liquor license requirements, the court may impose several sanctions.

One of the most common examples of this is a temporary or permanent revocation of the company’s liquor license. Typically, a restaurant will permanently lose its license if it serves alcohol to any individual under the age of 21.

If a Commercial Establishment Serves Alcohol to a Minor Who has an Accident, is it Still Responsible?

Almost every state has dram shop laws that allow an individual who is injured by a drunken juvenile to sue the business that provided them with alcohol. In many jurisdictions, serving alcohol to a juvenile is a misdemeanor offense and businesses that do so run the danger of losing their liquor license.

What Must a Plaintiff Prove to Succeed on a New York Dram Shop Claim?

In order for a drinking establishment to be held liable, the plaintiff is required to prove:

  • The individual who injured them was intoxicated;
  • The defendant, or the bar or tavern, sold or provided liquor to the intoxicated person; and
  • The defendant also caused or contributed to the individual’s subsequent intoxication.

Therefore, a drinking establishment will be held liable for both the direct actions of its patrons in addition to any instances where a patron is simply a party to an incident that results in injury to a third party.

Should I Hire a New York Lawyer for a Dram Shop Claim?

In the State of New York, dram shop legal actions typically include at least three parties, the drinking establishment that provided the liquor; the patron who consumed the liquor; and any individuals that were injured by the intoxicated patron. Because of the multiple parties involved in these types of claims, there are often overlapping claims and conflicts of interest.

Because of this, it is essential to work closely with a New York business attorney, regardless of which of the parties listed above you are associated with. Your attorney can advise you of New York laws, help you advocate your claim, and assist you in obtaining compensation.

If you have been injured as a result of the actions of individuals employed by an establishment that sells alcohol, it is especially important to have the assistance of an attorney, as businesses often have more funds available to defend against lawsuits.

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