Consider this scenario – someone gets drunk at a bar, gets in car, and on their way driving home, hits and seriously injures someone. Obviously, the injured party can sue the driver that hit them, but they may not have adequate car insurance (or insurance might not cover the harm). Who else? In DC and nearly every state (but not the nearby cluster of Virginia, Maryland and Delaware, the cluster of South Dakota, Nebraska, and Kansas, and the nightlife destination states of Nevada and Louisiana; Calif. ‘s only applies when it serves someone obviously intoxicated underage and Wyoming/Florida only applies when it’s someone underage or an alcoholic. Mississippi and Wisconsin similarly shield liability) has a dram shop law or other legal requirement that basically can make bars and restaurants themselves legally responsible in lawsuits for serving in many situations.

In January 2023, DC Councilmembers Christina Henderson and Brooke Pinto introduced the Dram Shop Clarification Amendment Act of 2023. This bill would change and clarify DC law regarding the liability of bars and other places that serve booze when their customers cause harm. Advocates of the bill in the hospitality industry claim that this would help lower the astronomical liquor liability insurance costs in DC, while opponents argue it will make the public less safe and reduce ability of injured parties to be whole. The Council held public hearings in early June where hospitality industry strongly expressed their support, while the DC government (though their opposition is pretty targeted and can be addressed easily), trial lawyers, and MADD (WABA in writing) opposed bill as written.

There has been virtually no public reporting on this (Amanda Michelle Gomez of DCist wrote a paragraph at the end of her reporting about the potential I-82-related legislation – this is the only reporting I’ve seen on this), so Barred in DC is hoping to fill the void here (NOTE: this is not legal advice, and views don’t represent my employer).

Current Law

DC does not technically have a “dram shop law,” but since a 1987 DC Court of Appeals decision (Rong Yao Zhou v. Jennifer Mall Rest., Inc.) it has been settled law in DC (after a 15 year period where Federal courts and DC courts issued contradictory rulings) that an establishment that sells booze to a customer who is intoxicated or appears to be intoxicated, is generally liable for injuries/damages caused by the customer as a result of serving that booze (if the negligence standard is met). The court ruled that the DC law that prohibits licensees from serving intoxicated customers, even though it doesn’t explicitly say that injured parties have a right to sue, has a “public safety purpose” and that an “unexcused violation therefore constitutes negligence per se.” Whether someone can be intoxicated (not defined under DC law) can be shown by evidence, including apparently blood alcohol level tests.

Proposed Changes

The draft bill does the following:

• Adds a statutory definition of “intoxicated” for first time
  • “a condition in which a person has consumed enough alcoholic beverages to observably affect their manner, disposition, speech, muscular movement, or general appearance of behavior”
  • Apparently borrowed from Virginia law
  • Under this definition, a customer’s intoxication would have to be observable to an establishment’s staff
• Inserts knowledge requirement for violation
  • Adds “knowingly“ to statute
  • According to RAMW, 1/3 of states have this in their law
  • So if bartender doesn’t know if person is intoxicated, the bar is off the hook
• Prohibits serving an “obviously” or “noticeably” intoxicated customer
  • Current law prohibits serving:
    • “An intoxicated person, or any person who appears to be intoxicated.”
  • Proposed law prohibits serving:
    • “An obviously intoxicated person, or person who is in a state of noticeable intoxication.”
  • Supposedly “noticeably”, “visibly”, or “obviously” is in 20 state laws currently
• Restricts liability to only those inflicted by customer on injured third parties, not the customer itself
  • Apparently in 12 states
• Puts a $250,000 cap on damages
  • There are no other tort damages caps under DC law
  • In addition to the 10 states that basically don’t have a dram shop civil liability law, another 12 states have some sort of caps (5 of which are at or below this figure)

Support For Bill

According to RAMW (Restaurant Association of Metropolitan Washington), the DC Nightlife Council, and the multiple bar owners/GMs (Pie Shop, One Eight/District Made, Black Cat, Trade, Echostage, Lucky Buns, Madhatter, Shaw’s Tavern, Vagabond), who testified at the June 8, 2023 hearing,, because of the courts’ interpretation of the law, DC has the second most permissive climate for suing bars and other establishments (behind only Vermont; Alabama, which was also more permissive than DC, instituted relatively similar reforms in April of this year), and as a result has gotten a “liquor liability hazard grade” of “9” by the Insurance Services Office (ISO). Per RAMW, this high grade has resulted in much fewer insurance carriers operating in DC and those who do charge excessively high rates; so high that some restaurants and bars have chosen to forgo having insurance at all (a risky gamble).

I obtained a copy of a presentation RAMW has circulated regarding this bill.

According to RAMW, the nightclub Echostage currently pays $400,000/year in liquor liability insurance, while a similar club in Chicago that is double the size (Radius) only pays 1/5th of that amount. The new Adams Morgan spot Baja Tap pays nearly $43,000, while Nighthawk in Crystal City pays $0. The owner of District Made/One Eight Distilling testified that they paid $32,000 for insurance this year when they are only on track to gross $35,000 in cocktail sales on premises this year. Multiple bar owners testified about how they had to scramble basically every year to secure insurance because their carrier dropped out, with carriers citing the uncertainty/permissiveness of DC law.

RAMW testified that they supported the bill and requested the addition of a one year statute of limitations because bar/restaurant staff are pretty mobile so it may make it difficult.

Law as Written Opposed by Mayor Bowser’s Administration, Trial Lawyers, WABA, MADD

Although the Director of DC’s Alcoholic Beverage and Cannabis Administration (ABCA) (Fred Moosally) testified that they supported clarifying the dram shop law (since DC doesn’t really have one), they opposed the bill overall because the changes to the bill would affect their enforcement/regulatory actions and would encourage negligent behavior that would avoid civil enforcement in situations where there is no 3rd party harm.

They suggested primarily that DC should create a separate law regarding civil liability like is done in many states. In response to questioning, Fred implicitly seemed to propose defining “knowingly” as “knew or should have known,” encourage DC council to work with both the hospitality and trial lawyers on the bill language, and suggest they look at Maine’s law, which was extensively revised in 1987, in part to “Allocate the liability for payment of damages fairly among those responsible for the damages, which will encourage liquor liability insurance availability;” the law includes a $350k cap, but significantly exempts medical expenses from the cap.

Aside from ABCA, several others testified against the bill: several trial lawyers who’ve brought lawsuits against bars/restaurants in the past, the parents of Patrick Casey (A veteran who was killed in a fight at the M St NW McDonalds who ended up filing suit – yes that’s a Supreme Court justice on that opinion), Mothers Against Drunk Driving (MADD), and (in written testimony), the Washington Area Bicyclists Association (WABA).

In general, the testimony said that the bill would make the public less safe and make it extremely hard for those harmed to seek compensation. The most pointed objections were to the addition of the “knowing” standard to the law as well as the $250k cap (several pointed that this wouldn’t even cover medical expenses in many cases, which has to be reimbursed usually to insurer). The trial lawyers said that under the “knowing” standard it would be almost impossible for injured parties to win cases as it would require them to secure the testimony of the bartender and ask them if they knew the person was “intoxicated” or not-if they said no, then the case would fail even if all evidence was to contrary. One noted that Iowa passed a similar bill which hasn’t resulted in lower insurance costs, and others suggested that DC council actually ask insurance companies.

Copies of written testimony from lawyer Brendan Klaproth (on behalf of the Trial Lawyers Association of Metropolitan Washington, D.C.), MADD, and WABA is found below.

What’s Next?

The committee will usually hold a markup session to revise the bill. With ABCA’s opposition to the bill, I think it will need to be overhauled into a separate statute, but that may be pretty simple. I will guess that the council will adopt at least “should have reason to know” to “Knowledge” requirement and either eliminate the proposed cap (or borrow the exclusion from Maine’s bill).