Arizona Court of Appeals Division One holds that statute authorizing liability in dram shop actions only when a person is “obviously intoxicated” preempts common law dram shop liability and does not violate the anti-abrogation clause.

After drinking one night at a club, a patron drove home, slept for a while, then went back out on the road and hit a truck, killing its occupants.  Plaintiffs sued the patron and the club for damages under common law and statutory dram shop theories.  As to the club, the jury found in Plaintiffs’ favor on the common law claims, but in the club’s favor on the statutory dram shop claim.

The court of appeals reversed the judgment against the club, holding that the trial court erred by not granting the club’s motion for judgment as a matter of law, which argued that the patron’s stop at home was an intervening cause precluding the club’s liability.  The supreme court vacated the court of appeals’ decision and held that the trial court properly submitted the intervening cause issue to the jury.  The court also remanded the case to the court of appeals to decide the issue of whether Plaintiffs’ negligence and common law dram shop claims were preempted by the dram shop liability statutes, A.R.S. §§ 4-311 and 4-312. 

The court of appeals held that the statutes do preempt the common law claims.  The court discussed the history and development of dram shop liability in Arizona, which was first established in Ontiveros v. Borak, 136 Ariz. 500 (1983), and Brannigan v. Raybuck, 136 Ariz. 513 (1983).  In those cases, the supreme court abolished the common law doctrine of tavern owner nonliability in Arizona and recognized a common law cause of action for dram shop liability. 

Three years later, the legislature passed A.R.S. §§ 4-311 and 4-312, codifying a cause of action against dram shops.  The statutory claim, however, preempted liability for liquor licensees unless the patron was “obviously intoxicated.”

Overturning earlier precedent in light of intervening supreme court cases, the Court further held that this narrower statutory claim does not violate the Arizona constitution’s anti-abrogation clause, which generally prohibits statutory abrogation of common law claims that existed when the Arizona Constitution was adopted in 1912.  Here, the court found that the common law dram shop cause of action did not exist in 1912.  Accordingly, the court held, contrary to its earlier decision, that § 4-312(B) does not violate the Arizona Constitution’s anti-abrogation provision.

Judge Winthrop authored the unanimous opinion, in which Judges Cruz and Gass joined.

Disclosure: Osborn Maledon attorneys were involved with this case.