What Is Dram Shop Liability in Texas?

December 13, 2023 | By Francis Firm Injury Attorneys
What Is Dram Shop Liability in Texas?

If you or a loved one suffered an injury in a drunk driving accident, you can take legal action against more than just the driver who injured you. Of course, you can file a claim against their insurance or a lawsuit against them, but Texas law gives you additional potential defendants based on the circumstances of your case.

You can file a lawsuit against the establishment that sold alcohol if you know where the driver was drinking or purchased alcohol before the crash. However, you cannot hold them strictly liable for selling the alcohol that intoxicated the driver. You must prove that they sold alcohol to a visibly intoxicated person for you to obtain financial compensation.

Dram shop lawsuits are always very factually complex. It can be difficult to trace where the driver bought alcohol and to prove that the seller knew (or should have known) that the buyer was intoxicated.

To have the best possible chance of winning your case, you should hire an experienced drunk driving accident attorney to file your claim, both against the responsible driver and the seller of the alcohol.

Injured drivers have sometimes achieved significant financial recoveries from establishments or liquor stores that placed profits over people. Still, you will likely only get compensation from the dram shop with a determined lawyer and decisive proof.

Texas Dram Shop Liability Law

What Is Dram Shop Liability in Texas

Chapter 2 of the Texas Alcoholic Beverage Code sets the dram shop laws. The law applies to providers of alcoholic beverages, including:

"[P]erson(s) who sells or serves an alcoholic beverage under the authority of a license or permit issued under the terms of this code or who otherwise sells an alcoholic beverage to an individual."

The law makes it illegal for a provider to sell alcohol when:

"[I]t was apparent to the provider that the individual who was 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."

The Texas Dram Shop law was passed in 1987. At that time, the Texas Legislature wanted to attack the root of a spate of drunk driving accidents throughout the state - establishments selling alcohol to clearly intoxicated patrons who got on the road and caused severe accidents.

Dram shop lawsuits are common in Texas. There was one notorious case in Corpus Christi in which a drunk driver consumed eleven drinks at a bar before getting behind the wheel. The driver caused an accident that took the lives of two other people as well as his own.

The surviving family members sued the bar where he drank, and the jury returned an eye-popping verdict, awarding the family $301 billion.

Of course, verdicts that high are symbolic and meant mainly for shock value, as the court will reduce excessive recovery in most situations, and plaintiffs rarely recover those awards. However, the case sends a message about how seriously juries can take drunk driving and award victims for their needless harm.

Most dram shop cases result in more reasonable settlements and awards. Bars and stores have insurance policies to protect against these types of lawsuits, though obtaining compensation is never easy.

In some cases, you must collect against the establishment's assets if they do not have enough insurance coverage to pay for your damages.

Who You Can Sue in a Dram Shop Lawsuit in Texas

The law applies to a person who serves alcohol, but you will likely not sue the individual server. A business has greater resources and insurance to cover issues like this.

Like other areas of the law, dram shop liability can attach to the person's employer. Under principles of agency law and respondeat superior, an employer is liable for most actions of their employee that occur within the scope of their employment. A bartender or store clerk does their job when selling alcohol; therefore, the employer should also be liable.

The Texas Dram Shop law clarifies that you can file a lawsuit against the responsible driver and the establishment selling alcohol. These types of cases do not operate to the exclusion of the other.

Dram shop laws apply to more than just bars and liquor stores. An adult can be legally responsible for the damages caused by a minor when they are not the child's parent or guardian when they have knowingly served them alcohol underage. In addition, you can sue a social host when they knowingly served their intoxicated guest alcoholic beverages.

Establishing Dram Shop Liability in Texas

Dram Shop Liability

Since the law applies when it appears that someone was intoxicated, you must prove that the server knew that they were serving alcohol to someone who was already drunk. This aspect of dram shop cases can make these lawsuits challenging because you need to go back in time and show what the server knew.

However, It is possible to win one of these lawsuits, and establishments across Texas have had to pay. Always have an experienced attorney who handles drunk driving cases carefully evaluate the circumstances of your accident. They can best advise whether you have a dram shop case.

Your attorney will need to gather evidence that reconstructs what the server may have seen and known at the time they were serving alcohol.

The evidence can include:

  • Surveillance video footage from the establishment shows that the patron was obviously intoxicated (practically every liquor store, and many restaurants, will have this evidence available to them)
  • Testimony from people who encountered and saw the intoxicated person when they were purchasing alcohol
  • Medical tests performed on the driver if they suffered an injury in an accident
  • Receipts from the driver or the bar that show the amount of alcohol that they purchased and consumed
  • The size and alcohol content of the drinks served by the bar

It takes work to assemble the case you need to win, and only an experienced attorney knows what evidence you need to pursue and how to get their hands on it.

How to Build a Strong Dram Shop Lawsuit Case in Texas

Timing is of the essence in a dram shop liability case. Once an establishment realizes they have potential liability, they may figuratively circle their wagons to protect themselves at all costs.

Like a truck accident case, your attorney will need to act quickly to lock down the evidence that you need for your case.

Even if you cannot access the evidence you need immediately, your attorney must direct the potential defendant to preserve it before trial.

Your case may be witness and evidence-intensive. Not only do you need to establish a rough idea of how much the driver was drinking, but you must also prove how they may have looked to someone else at the time.

Your attorney may need to work with expert witnesses to confirm that the driver was visibly drunk based on what they consumed, and the average person should have known that when seeing them.

Types of Damages in Dram Shop Cases

Suing an establishment may give you a deeper pocket to collect from in a lawsuit or a claim because the restaurant or liquor store may have an insurance policy to add to the driver's coverage. Then, the establishment may also have assets that can satisfy any judgment.

The combination of both insurance coverages may be enough to pay for your damages.

The principles underlying dram shop damages are similar to those in any other personal injury case. The establishment will pay your economic and non-economic damages.

Monetary damages represent the direct financial costs of your injuries, whereas non-economic damages compensate you for the physical and mental experience of your accident, both past and future.

Although punitive damages are rare in a personal injury case, dram shop lawsuits are one area where a jury may be more likely to find the extreme culpability necessary for this type of award. The server or person who sold the alcohol may have been grossly negligent.

Alternatively, the establishment may have a track record of ignoring liquor laws and serving alcohol when it should not.

In the case described above, most of the jury award was in the form of punitive damages. These damages must bear some reasonable relationship to the compensatory damages, but they can also significantly increase the value of your case.

Your attorney will always try to establish the high culpability necessary for the jury to award you punitive damages.

Texas Bars Often Have Dram Liability Insurance

A prudent establishment will purchase specialized insurance that covers the sale of alcohol. There is no legal requirement that a bar has dram liability insurance - their liquor license is not contingent on it. Many establishments take a chance and go without dram liability insurance.

Given the frequency of dram shop lawsuits, a bar should know they need protection. The bar will pay for damages if they broke dram shop laws and you suffered an injury.

If the bar does not have insurance coverage (or they do not have enough coverage), they will be responsible for paying you from their assets. A high verdict can put them out of business and place the owners in a precarious financial position.

When an establishment has purchased protection, it also means that you are dealing with an insurance company. These companies have seen many dram shop lawsuits and know the defenses to use to defeat your case. They will also try to underpay your claim and avoid their total amount of liability.

Why You Need an Attorney in a Dram Shop Case

Dram shop cases are cumbersome on evidence, and you will need an extensive investigation by your attorney. Even then, much evidence is in the defendant's hands. For example, the defendant will not willingly give you their video camera footage and receipts to show their liability.

You will have to obtain this evidence through the lawsuit discovery process, and the defendant will be legally obligated to hand over relevant evidence after a lawsuit.

Then, you need to know how much to seek in a claim or lawsuit. Your damages will encompass both past and future harm, and you may be entitled to far more money than you think or that the insurance company leads you to believe.

The insurance company may realize that they have a significant problem and try to settle the case for far less than you can otherwise get.

Alternatively, they may take the stance of fighting your case until they realize that you have the proof to hold them accountable. Either way, you need someone to play hardball with the insurance company.

Hire a Lawyer Who Has Handled Dram Shop Cases

You will have already hired your attorney after you had suffered an injury in a car accident. Suppose you believe that the driver was intoxicated after being out drinking. In that case, you may consider retaining an attorney with experience in dram shop law because not every lawyer has handled these high-stakes cases.

Hiring a car accident lawyer does not cost you any money from your pocket. You will have to pay a retainer to get legal help and will not be responsible for hourly bills. The only way that you pay a lawyer is if you win your case. Then, they will receive a percentage of your proceeds, as specified in the representation agreement.

Consulting with a car accident lawyer offers peace of mind during a challenging time. Legal professionals have the experience to guide you through a complex case and protect your rights. By providing knowledgeable advice, they relieve much stress associated with insurance claims, legal processes, and negotiations.

With a personal injury lawyer by your side, you can focus on recovery, knowing that your legal matters are in capable hands, increasing the likelihood of a favorable outcome in your case.