by Jonathan T. Howe Esq. | April 01, 2014
Be Smart
• Learn the law in your meeting's destination. Some 28 states have social-host liability. California now joins them on a limited basis.

• Make sure you have social-host liability insurance.

• Make sure your servers are aware that they are not to serve anyone underage or who appears to be intoxicated.

•  Be tough. Cut intoxicated people off and keep them out of their cars. If someone causes further damage, such as destroying a hotel room, the host could be found liable.
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In a unanimous decision in late February, the California Supreme Court overruled both trial and appellate courts that had dismissed a social-host liquor-liability case. As a result, social-host immunity is changed in the state.

In 1971, the California courts held that sellers and furnishers of alcoholic beverages could be liable for injuries caused by those to whom they had served alcohol, but in 1978 the California legislature negated those rulings by reinstating the prior common-law rule that the consumption of alcohol, not the service of alcohol, is the basic cause of any resulting injury.

At Issue
In this current case, which is now sent back down for trial, the facts are somewhat unique, but are a great lesson for anyone who conducts an event at which alcohol is served.

Jessica, who was 20 and thus under the legal drinking age, hosted a party at a rental residence owned by her parents, without their consent. Word got out and about 60 people arrived, both invited and uninvited, the majority of whom were under 21. Jessica spent $60 on liquor and two of her friends helped offset the cost. About $60 was collected from the uninvited guests, who were charged $3 to $5 per person.

One uninvited guest, Thomas Garcia, arrived visibly intoxicated and became aggressive and obnoxious. He was escorted out by Andrew Ennabe. Garcia got in his car and ran over and severely injured Ennabe, who later died.

Ennabe's parents filed a wrongful death action against Jessica and her parents, citing negligence, premises liability and liability under California law. A summary motion to dismiss the case was granted to the defendants, but the plaintiffs appealed all the way to the state's Supreme Court, saying it was not a hosted situation but rather, because of the entrance fee, Jessica had sold alcohol, making her potentially liable. The state's Supreme Court found that the social-host immunity did not apply to "any other person who sells alcohol," determining that Jessica was a seller and her parents could be liable because the party was held on their rental property.

It will be interesting to see what happens at trial.

The Implications
Suppose you want to host a cash bar or your registration fee covers a cocktail party. The court interpreted the state law to mean "sale" as including "any transaction whereby, for any consideration, title to alcoholic beverages is transferred from one person to another." The court placed heavy emphasis on the words "any transaction."
Even complimentary drinks can be considered part of a transaction. Other cases have concluded that a free glass of wine with a meal at a restaurant is a sale, or a social club that charges a fee for guests to enter the club and to get "free" drinks constitutes a sale. In other words, beware (and heed the tips at right).