Opinion ID: 2621995
Heading Depth: 1
Heading Rank: 7

Heading: The Oklahoma Alcoholic Beverage Control Act and Dram Shop Liability

Text: ถ 39 The Oklahoma Alcoholic Beverage Control Act, 37 O.S.2001, งง 501, et. seq., is a comprehensive statutory scheme to regulate alcoholic beverages for the protection of the welfare, health, peace, temperance and safety of the people of the state. 37 O.S.2001, ง 503(A). The regulatory scheme requires that any person must obtain a license from the Alcoholic Beverage Law Enforcement Commission (ABLE Commission) before engaging in virtually any aspect of the alcoholic beverage industry, including brewing, distilling, importing, transporting, delivering, storing, selling or furnishing alcoholic beverages in this state. [16] 37 O.S.2001, ง 518; Ledbetter v. Oklahoma Alcoholic Beverage Laws Enforcement Comm'n, 1988 OK 117, ถ 2, 764 P.2d 172, 175. The regulatory scheme provides the right to an administrative hearing, 37 O.S.2001, ง 530, with appeal to the state courts, id. at ง 531, before a license may be denied, suspended or revoked, id. at ง 528. The regulatory scheme specifies acts that a licensee may do, id. at ง 521; specifies acts that a licensee may not do, [17] id. at ง 537; and declares various prohibited acts to be crimes and specifies criminal penalties. [18] Id. at ง 538. The regulatory scheme also imposes an excise tax on alcoholic beverages, id. at ง 553, as a direct tax on the ultimate retail consumer, id. at ง 562, and a gross receipts tax directly on holders of mixed beverage licenses. Id. at ง 576. ถ 40 Included in the litany of statutorily-prohibited acts is the prohibition against selling, delivering, or knowingly furnishing alcoholic beverages to an intoxicated person, id. at ง 537(A)(2), a violation of which is declared to be a felony subject to monetary fine between $500.00 and $1,000.00 and/or imprisonment for no longer than one year. Id. at ง 538(G). Extant jurisprudence also holds that ง 537(A)(2) imposes a duty upon a license holder to refrain from furnishing alcoholic beverages to intoxicated persons and that a license holder who furnishes alcoholic beverages to an intoxicated person may be summoned into state district court in a common law negligence action to recover for injury caused by the breach of that duty. Brigance v. Velvet Dove Restaurant, Inc., 1986 OK 41, 725 P.2d 300; Copeland v. Tela Corp., 1999 OK 81, 996 P.2d 931. ถ 41 Brigance abolished the common law non-liability of dram shops, finding a duty imposed by statute and common law principles upon commercial vendors to exercise reasonable care in serving alcoholic beverages to their customers. 725 P.2d at 304. Brigance adopted a rule of dram shop liability grounded in common law negligence: We hold that public policy is better served by holding that the common law principles of negligence are applicable where a commercial vendor for on the premises consumption is shown to have sold or furnished intoxicating beverages to a person who was noticeably intoxicated from which a jury could determine such conduct creates an unreasonable risk of harm to others who may be injured by the person's impaired ability to operate a motor vehicle. Id. at 305 (footnote omitted). Here, the merits of plaintiff's negligence action are not before us. Plaintiff will have an opportunity to prove the elements of common law negligence under Brigance before the trial court on remand. ถ 42 Brigance relied heavily on the analysis and reasoning of the New Jersey Supreme Court in Rappaport v. Nichols, 31 N.J. 188, 156 A.2d 1 (1959). The New Jersey court viewed dram shop liability as compelling obedience to the statutory obligations imposed on license holders: But we are convinced that recognition of the plaintiff's claim will afford a fairer measure of justice to innocent third parties whose injuries are brought about by the unlawful and negligent sale of alcoholic beverages to minors and intoxicated persons, will strengthen and give greater force to the enlightened statutory and regulatory precautions against such sales and their frightening consequences, and will not place any unjustifiable burdens upon defendants who can always discharge their civil responsibilities by the exercise of due care.... Liquor licensee, who operate their businesses by way of privilege rather than as of right, have long been under strict obligation not to serve minors or intoxicated persons and if, as is likely, the result we have reached in the conscientious exercise of our traditional judicial function substantially increases their diligence in honoring that obligation then the public interest will indeed be very well served. Rappaport v. Nichols, 31 N.J. 188, 156 A.2d 1, 10 (1959). ถ 43 Congress enacted a similar prohibition on dram shops for the District of Columbia. The District of Columbia Court of Appeals, in Rong Yao Zhou v. Jennifer Mall Restaurant, Inc., explained: Congress in 1934 clearly was aware of the public safety hazards associated with alcohol abuse and incorporated safety concerns as an integral part of its comprehensive scheme to regulate the sale and use of alcohol in the nation's capitol. Senator Sheppard, who supported Prohibition, and opposed the legislation regulating the reintroduction of alcohol in the District of Columbia, was certain that among the many evils associated with the substance was that it multiplies the hazards on our streets and highways, imperiling the lives of motorists, pedestrians, and little children. 78 Cong.Rec. 698 (1934).... Congress understood that it was regulating a dangerous substance, and that the potential for injury and accident associated with intoxication is amplified when the intoxicated person is placed at the controls of a mechanical device, particularly one involved in transportation. When, as alleged in this case, an intoxicated customer who has been served liquor in violation of the Alcoholic Beverage Control Act crashes his car shortly after departing from defendant's establishment, injuring third parties, we believe that a harm has occurred which ง 25-121(b) was designed to prevent and that the doctrine of negligence per se should apply. Our view is not mitigated by the proposition that public safety may have been only a partial purpose of the legislation.... Liquor control laws frequently have multiple purposes ... and our courts have held that a liberal and reasonable construction shall be given these statutes in view of their remedial objects and purposes so as to effect the[se purposes].... 534 A.2d 1268, 1275-1276 (D.C.1987), appeal after remand and reversed and remanded on other grounds by, 699 A.2d 348 (D.C.1997) (footnote noting that since 1934 the evidence has mounted of the hazards associated with drinking and driving omitted); Jarrett v. Woodward Bros., Inc., 751 A.2d 972 (D.C. 2000). ถ 44 Congress enacted a regulatory scheme for the District of Columbia much like the regulatory schemes enacted by state legislatures. Congress and state legislatures prohibited commercial vendors from serving intoxicating beverages to intoxicated persons. Today, under congressional regulation as well as under state regulation, barrooms and taverns have civil liability for damages caused by knowingly furnishing alcoholic beverages to noticeably intoxicated persons. As the New Jersey Court explained in Rappaport v. Nichols , dram shop liability strengthens the statutes regulating alcoholic beverages and, as enunciated in Brigance, also strengthens the underlying public policy to protect the welfare, health, peace, temperance, and safety of the people of the state. ถ 45 In summary, the Oklahoma Alcoholic Beverage Control Act is a comprehensive scheme to regulate alcoholic beverages within this state enacted by the Legislature through the exercise of its police power and taxation power. The Act provides for enforcement through the exercise of the executive power of specific state agencies and through the exercise of the judicial power over cognizable controversies, criminal and civil. Accordingly, the Oklahoma Alcoholic Beverage Act subjects holders of licenses issued pursuant to that Act to the criminal and civil jurisdiction of the state courts.