In the highly competitive quick-service restaurant industry, fast-food chains are continually looking for an edge over their competitors. Some brands have found a way to distinguish themselves from other fast-food establishments and even higher-end restaurants by adding alcoholic beverages to their menu.

Chains such as Pizza Hut, Smashburger, Chipotle Mexican Grill, and Taco Bell sell alcohol to their customers—and some go so far as to offer happy hour specials or cocktail pairings. The higher-priced selections increase restaurants’ margins and attract customers who might go elsewhere for a beer, glass of wine or a cocktail. Additionally, by serving alcohol, the restaurants bring in more customers in the evening, which is counter to typical fast-food sales.

While restaurant chain owners are enthusiastic about the new source of income, critics are concerned that they may not be prepared for the complexities associated with serving alcohol. While a recent Florida Supreme Court ruling establishes a precedent that will help reduce liability risks for restaurants serving alcohol, restaurants everywhere can and should take certain measures to reduce their liability exposure.

Florida’s Dram Shop Laws Protect Establishments Selling Alcohol, But Not All Transactions

A “dram shop” is a legal term that refers to a tavern, bar or other establishment that sells alcoholic beverages. The term comes from the old English term “dram,” which is a measurement of liquid spirits. Dram shop liability is the body of law governing the liability of establishments engaged in the commercial sale of alcohol to patrons.

Under Florida’s dram shop laws, a bar, pub or tavern within the State that sells or provides alcoholic beverages to a person of lawful drinking age cannot be held liable “for injury or damage caused by or resulting from the intoxication of such person.” (Florida’s Section § 768.125: Liability for Injury or Damage Resulting from Intoxication). In other words, qualifying establishments will not be liable for injury or damage caused by the actions of someone of lawful drinking age.

An exception to this law is someone who “willfully and unlawfully” sells or provides alcoholic beverages to an underage person or a person or establishment who “knowingly serves a person habitually addicted to the use of any or all alcoholic beverages may become liable for injury or damage caused by or resulting from the intoxication of such minor or person.” Case law presents fact patterns which should assist in informing an establishment of “habitual drunks,” but owners and insurers should establish policies for documenting and deterring such patrons from over imbibing. 

Florida Tort Reform and Comparative Fault

Comparative fault, also referred to as comparative negligence, compares the fault of each party involved in an incident and reduces damages awarded to the plaintiff if they caused their own injuries. Prior to 2023, Florida was a “pure” comparative fault state, which means that the jury could apportion fault among the responsible parties, and the plaintiffs’ damages would be proportionally reduced based on their percentage of liability. So, for example, if the court found that damages were $1 million but the plaintiff was found to be 60 percent at fault, the plaintiff would be awarded only $400,000.

Florida underwent a massive tort reform last year, including changing how verdicts can be reduced based on the plaintiff’s percentage of negligence. The new standard states: “In a negligence action to which this section applies, any party found to be greater than 50 percent at fault for his or her own harm may not recover any damages” (Florida Statute § 768.81(6)). This decision greatly favors bars, restaurants and other alcohol establishments because plaintiffs found to be more than 50 percent at fault for their injuries cannot collect damages. 

Application of Florida’s New Comparative Fault Standard: Guardianship of Jacquelyn Anne Faircloth vs. Main Street Entertainment Inc.

In Guardianship of Jacquelyn Anne Faircloth vs. Main Street Entertainment Inc., the Florida Supreme Court addressed the state’s new comparative fault statute (§ 768.81) and whether it applies to lawsuits against vendors who willfully and unlawfully sell alcohol to underaged patrons, resulting in the patron’s intoxication and related injury. In this case, an 18-year-old woman who’d been drinking at a bar was later catastrophically injured when she crossed the street in front of a pickup truck driven by a 20-year-old drunk driver.

The woman’s guardians sued the two bars that served alcohol to the woman and the pickup truck driver, claiming their intoxication caused the accident. The lower court rejected the bars’ comparative fault defense and issued a $28.6 million jury verdict for the woman. Attorneys for the bar that served the young woman appealed, arguing that she was partially at fault for her own injuries and that the bar’s liability should be reduced. Florida’s high court ruled that the comparative fault defense could be presented to the jury, establishing a precedent that will help reduce liability risk for Florida establishments that serve alcohol.

The application of the new comparative fault rule to dram shop cases will change the assessment and valuation of these types of lawsuits. Plaintiffs’ lawyers may be less interested in pursuing cases in which their potential clients demonstrated poor judgment before suffering injuries. Settlements may be easier to reach, as well.

Practical Tips for Quick-Service Restaurants

While the ruling in the Guardianship of Jacquelyn Anne Faircloth case is beneficial to vendors, restaurants serving alcohol can reduce their risk even further. The following time-tested, common-sense actions can help prevent incidents or show that establishments made good faith efforts to avoid them:

• Check every patron’s identification and age, without exception.
• Make sure staff members cover the establishment’s entry and exit points and check patron’s identification—again, without exception.
• Train employees on laws and liability related to underage drinking.
• Enforce a zero-tolerance policy for knowingly selling liquor to underaged patrons.
• Ensure that supervisors consistently monitor the restaurant staff and patrons to promote safety and risk reduction. 
• Consider turning away or limiting patrons known to be habitually addicted to alcohol.

These are just a few tips that quick service restaurants can employ to potentially reduce future liability for your establishment. For more detailed guidance, contact an attorney on the recent changes in Florida’s comparative fault law and how it could impact your business.  

This article was originally shared on QSR Magazine on August 26, 2024 and is republished here with permission from the publication.