There is an interesting case before the California Supreme Court on the liability of hosts for guests at parties where a cover-charge is required. California law immunizes hosts who serve alcohol to intoxicated guests, but these parties involve payment that creates an ambiguity in the scope of the state law. The case involves Jessica Manosa, who was 20 years old when she hosted a party at her parents’ rental home and charged $3 to $5 to strangers. One of those guests proceeded to drink too much and ran over another guest, Andrew Ennabe (left), the Cal State Fullerton student.

We often discuss dram shop cases in my torts classes. The term comes from an English measurement that was roughly the size of a shot.

As a general rule, the common law was hostile to the claim of a right of action against a seller of alcoholic beverages for injuries caused by an intoxicated person. The independent decision of the person to drink to excess was viewed as cutting off proximate causation. Dram shop laws impose liability on businesses for over-serving but generally exempt social hosts. In Jarrett v. Woodward Bros., 751 A.2d 972 (2000) the court defined violations of the statutes governing alcohol sales and management to include such liability. The court held:

We reach that conclusion because the legislature has expressed a policy, in unequivocal terms, that the description of this Headnote.requires tavern keepers not to “permit on the licensed premises the consumption of alcoholic beverages” by underage and intoxicated persons. D.C. Code 25-121 (b). The legislature has authorized stiff penalties for violation of the statute, from fines of up to $ 1,000 and imprisonment up to one year, see D.C. Code 25-121 (a), to suspension and revocation of the liquor license, see D.C. Code 25-118 (a). Although Rong Yao Zhou involved injuries resulting from the conduct of a drunk driver, it did not preclude application of its reasoning to injuries resulting from the actions of an intoxicated pedestrian who is injured by a car.

Eight states are non-dram shop jurisdictions. As we have seen with dram shop cases at stadiums (here), these are difficult cases for businesses. We have also seen hotels sued over dram shop charges. Most statutes exclude home owners and social events, though such actions continue to be brought under conventional negligence claims, including some bizarre cases.

California has had an interesting history with dram shop liability. These statute’s generally make the over-serving of alcohol as the proximate cause of later accidents where third parties sue businesses. However, California turned against the strict liability aspect of the rule in California Civil Code section 1714, which states:

(b) It is the intent of the Legislature to . . . reinstate the prior judicial interpretation of this section as it relates to proximate cause for injuries incurred as a result of furnishing alcoholic beverages to an intoxicated person, namely that the furnishing of alcoholic beverages is not the proximate cause of injuries resulting from intoxication, but rather the consumption of alcoholic beverages is the proximate cause of injuries inflicted upon another by an intoxicated person.
(c) Except as provided in subdivision (d), no social host who furnishes alcoholic beverages to any person may be held legally accountable for damages suffered by that person, or for injury to the person or property of, or death of, any third person, resulting from the consumption of those beverages.
(d) Nothing in subdivision (c) shall preclude a claim against a parent, guardian, or another adult who knowingly furnishes alcoholic beverages at his or her residence to a person under 21 years of age, in which case, notwithstanding subdivision (b), the furnishing of the alcoholic beverage may be found to be the proximate cause of resulting injuries or death.

In this case, Manosa (then 20) hosted a party and charged $3 to $5 to strangers who showed up without an invitation. That made her a seller of alcohol according to the plaintiff. Thomas Garcia, 20, paid for himself and his friends and quickly over-consumed alcohol. He harassed women at the party and was generally obnoxious according to witnesses. After he dropped his pants at the party, he was told to leave. He proceeded to get into this car and ran over another guest who died. Garcia later pled guilty to voluntary manslaughter and was sentenced to 14 years.

The trial court granted summary judgment and the California Court of Appeal affirmed, holding that a social host who charges guests an admission or entrance fee to help defray the costs of making alcoholic beverages available to the host’s guests is not a person who “sells, or causes to be sold” an alcoholic beverage within the meaning of Bus. & Prof. Code, § 25602.1. THe language of the state law is tricky on the licensing issue:

Section 25602.1 provides: “Notwithstanding subdivision (b) of Section 25602, a cause of action may be brought by or on behalf of any person who has suffered injury or death against any person licensed, or required to be licensed, pursuant to Section 23300, or any person authorized by the federal government to sell alcoholic beverages on a military base or other federal enclave, who sells, furnishes, gives or causes to be sold, furnished or given away any alcoholic beverage, and any other person who sells, or causes to be sold, any alcoholic beverage, to any obviously intoxicated minor where the furnishing, sale or giving of that beverage to the minor is the proximate cause of the personal injury or death sustained by that person.” (Italics & boldface added.)

Notably, Ennabe was also intoxicated at the party when Garcia was escorted to his car and then ran over Ennabe. Given the lower court rulings, it is not clear if there will be an argument that Ennabe contributed to the accident, but being intoxicated at such a party is no crime and hardly unforeseeable for the defendants. However, a clearly promising young man was lost and this family wants to see liability for the person who held the party in addition to the criminal punishment meted out to Garcia. That may be difficult to secure.

In Ennabe v. Manosa, 190 Cal. App. 4th 707, the appellate court ruled:

Section 23025 requires that there be a transaction, for consideration, whereby title to an alcoholic beverage is transferred from “one person to another.” The statute thus contemplates a transaction in which one person relinquishes title to the alcoholic beverage and another person receives title to the alcoholic beverage. In the case of a social host, like Manosa, charging guests an admission or entrance fee of $ 3 to $ 5 to help defray the cost of providing “communal” alcoholic beverages to guests who serve themselves, there is no transfer of title to an alcoholic beverage at the time the entrance fee is paid. If any transfer of title occurs, it is only when the guests consume the alcoholic beverage.

But it is difficult, if not impossible, to determine which individual or individuals held title to the alcoholic beverages consumed by Garcia because not only Manosa, but two of her friends as well, contributed the money to obtain the initial alcoholic beverages. Other guests paying an entrance fee, including Garcia himself, contributed the money used to obtain additional alcoholic beverages during the party. Hence, Manosa and all of her paying guests may be said to have provided alcoholic beverages to each other, making Manosa and all of the guests both sellers and purchasers. Under such circumstances, it would be unreasonable to deem a sale to have occurred within the meaning of sections 25602.1 and 23025.

The Court also rejected the licensing claim:

Section 23399.1 provides: No license or permit shall be required for the serving and otherwise disposing of alcoholic beverages where all of the following conditions prevail: [¶] 1. That there is no sale of an alcoholic beverage. [¶] 2. That the premises are not open to the general public during the time alcoholic beverages are served, consumed or otherwise disposed of. [¶] 3. That the premises are not maintained for the purpose of keeping, serving, consuming or otherwise disposing of alcoholic beverages. [¶] Provided, however, that nothing in this section shall be construed to permit any person to violate any provision of the Alcoholic Beverage Control Act.”

The circumstances of this case establish that no license was required for Manosa’s party because the three conditions of section 23399.1 were met. For the reasons set out in part B. of the Discussion, we conclude that there was no sale of an alcoholic beverage to Garcia within the meaning of sections 23399.1, 25602.1, and 23025. In a section of the TEIG dealing with private parties, a note provides, “Be aware that the definition of ‘sale’ includes indirect transactions other than merely paying for a glass of wine or other drink containing alcohol. For instance, if an admission fee is charged or there is a charge for food and the alcohol is included, but not separately charged, an ABC license is required.” (Cal. Dept. of Alcoholic Beverage Control, TEIG (Nov. 2009).) The TEIG cites no authority for its definition of “sale”; it does not discuss section 23025 or Civil Code section 1714, subdivision (c). We give the definition of “sale” in the TEIG no weight because it does not appear to address the statutes or issues presented in this appeal.

The remaining two conditions of section 23399.1 are met: the residence where Manosa held her party was not open to the general public, but only to those to whom the party was publicized; and the residence, used by Manosa for a party on only that one occasion, was not maintained for the purpose of keeping, serving, consuming, or disposing of alcoholic beverages.

The rule that emerges from the California Supreme Court could be a line for party tickets that defray costs as opposed to making money. Of course, one could image social clubs that internalize salaries and other benefits as “costs” for tickets. The potential liability for average citizens is slightly not great since the vast majority of parties do not charge. However, the common practice of charging could now come with heightened liability.

The holding of such large parties with tickets is always a high-risk practice for parents. The potential for criminal charges for serving underaged persons adds another threat. A friend recently was actually charged with serving an underaged girl despite his (1) repeated inspection of the party looking for alcohol, (2) throwing out kids who brought alcohol, and (3) calling the girl’s parents to say that she appeared intoxicated. When she was later confronted about drinking, she lied and said our friend gave her alcohol. The police simply took her word for it despite the testimony of all other kids and witnesses. The charges were only dropped after the girl was confronted on email by our friend’s daughter and admitted that she lied. Nevertheless, it cost the family thousands to hire an attorney to deal with the charge. It is chilling account since a father could not have done more to try to prevent drinking and this was a relatively small party.

The clear legislative intent in California is to protect social hosts. After courts held in the 1970s that social hosts who serve alcohol to intoxicated guests are liable, the legislature pass a law creating this immunity. However, there remains liability for serving minors or selling alcohol.

I tend to disfavor liability for parents and hosts as a general rule, though I prefer to leave such matters to the common law. Any way this goes, it is likely to be a major ruling and we will be following it.

Ennabe’s family have created a moving foundation in his name.