978-1418051914 Chapter 12 Solution Manual

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Liability and the Sale of Alcohol ■133

I. Sexually Explicit Entertainment

❊Some bars provide nude or sexually explicit dancers (sometimes called “adult entertainment”). The

mechanisms used by governments to deter these establishments are regulations or ordinances that

restrict these business’s operations. Among regulations towns have adopted are prohibitions on to-

tal nudity, limitations on the hours of operation for sexually oriented businesses, prohibition of spe-

cific sexually explicit dance movements, and requirements that such businesses be located outside

residential areas.

❊Courts have determined that nude or nearly nude dancing is a form of speech that conveys eroti-

cism. As such, it is entitled to some protection by the constitutional right to free speech.

❊To pass constitutional muster, the restrictions must further an important government interest un-

related to suppression of free expression (such as protecting public health and safety), and must not

be broader than is necessary to achieve the stated government interest. Among permissible regu-

lations are the requirement that dancers wear minimal clothing such as a G-string or panties; a lim-

itation on the hours of operation, provided the limitation does not unreasonably constrain the

times the business can open; and restrictions on the geographical areas within the town an adult

entertainment business can be located, provided locations exist where the adult entertainment busi-

ness can operate.

J. Answers to Case Example Questions

12-2-1. Why was plaintiff’s opinion that his assailant was intoxicated when he hit plaintiff

not sufficient evidence of the attacker’s intoxication for purposes of dram shop

liability?

Key Terms

Dram shop act Imposes liability on a restaurant or

Liquor liability insurance Insurance to protect a

K. Answers to End-of-Chapter Questions

❊Review Questions

1. The law prohibits the sale of alcohol to certain categories of people. Identify those cat-

egories. What penalties do states impose for illegal sales?

The laws vary from state to state, but in most states a liquor licensee cannot serve minors, those

2. What is meant by dram shop liability?

3. When a patron who is visibly intoxicated continues to drink at two different licensees

and then is in a two-car accident injuring the driver of the second car, which licensee is

liable to the driver of the second car?

If the patron was visibly intoxicated in both bars, both would be liable. However, the injured

person cannot recover twice for the same injury. Instead, the liability would be allocated be-

tween the two bars. If the patron did not become visibly intoxicated until he or she reached

the second bar, only the second one would be liable.

Visibly intoxicated An individual who is obviously

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5. What behaviors might alert wait service personnel that a patron is visibly intoxicated?

The following conduct may be suggestive of intoxication: slurred speech, bloodshot eyes, poor

6. Identify five regulations some states impose on liquor licensees.

The regulations vary from state to state and may include any of the following: minimum age

for alcohol servers; restrictions on alcohol sales on Sunday; warnings to pregnant women; pro-

7. What factors determine the price of liquor liability insurance?

The following are evaluated: the volume of alcohol sold by the licensee, prior incidents of

8. What is an AWOL device, and why are many states banning them?

AWOL stands for alcohol without liquid. It allows the consumer to take in liquor without con-

suming the liquid. The device vaporizes alcohol, and mixes it with oxygen. This allows the con-

❊Discussion Questions

1. In most states, a patron who is illegally served alcohol and thereafter injured as a result

cannot sue the licensee who made the illegal sale. A third person injured by the patron

can sue the licensee. What is the rationale for distinguishing between the two?

The patron who is illegally served alcohol is an active participant in the act of illegally procuring

alcohol. The law treats his or her culpability as greater than that of the bar or restaurant. A third

2. Why does the law impose a minimum age for legal drinking of alcohol?

Underage drinkers wrongfully imbibe. The effects of alcohol are potentially so dangerous that

the law strives to motivate not just the consumer, but also the server, to strictly comply with

When alcoholic beverages are sold by a tavern keeper to a minor or to an intoxicated per-

son, the unreasonable risk of harm not only to the minor or the intoxicated person but also to

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Liability and the Sale of Alcohol ■135

3. Raj was a server at a bar. A customer ordered a beer. Raj knew he had served the cus-

tomer several beers already. What factors should Raj consider in determining whether

to serve the customer another drink?

Raj should be vigilant and observe for any signs of visible intoxication such as slurred speech,

4. From the previous question, if Raj determines that the customer is intoxicated, how

might Raj both refuse to provide another beer but nonetheless appease the patron?

Raj should suggest nonalcoholic alternatives to beer such as bottled water, nonalcoholic beers,

5. Why might a municipality not want a business in town that provides adult entertainment?

Many municipalities and residents living nearby seek to discourage these businesses because of

❊Application Questions

1. Jerry had been drinking all evening at the Bonger Bar and became visibly intoxicated.

The bartender continued to serve him. Thereafter, Jerry left the Bonger Bar and, still

visibly intoxicated, went to Gordon’s Restaurant, where he had another drink. While

driving home from Gordon’s, Jerry drove his car in the wrong lane and crashed head-

on with another car. Both Jerry and the driver of the other car suffered serious injuries.

Both sued Gordon’s and the Bonger Bar. Who is liable to whom?

In most states, neither the bar nor the restaurant is liable to Jerry. Although a bar violates the

Concerning the driver of the other car, in most states both Gordon’s and the Bonger Bar

will be liable for his or her injuries. Dram shop liability provides that a bar or restaurant that

2. A bartender at the Rascal Café, which is located in a state with a drinking age of 21 and

a dram shop act, served a female who was 19 years old. She had only one drink. Due to

the effects of the alcohol, she failed to stop at a red light and hit a pedestrian who was

crossing the street. Is the Rascal Café liable to the pedestrian for the injuries? Why or

why not?

3. Assume in the previous question that no one from the Café asked the patron for proof

of age. What penalty might the Café face and why?

An illegal sale to someone under age is grounds for suspension or revocation of the liquor license.

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