Post-Amendment Dram Shop Cases and the New “Knowingly” Element
By: Derek Goff
Alabama first passed its Dram Shop Act (Ala. Code § 6-5-71) in 1909, and it created a statutory cause of action against any establishment which serves alcoholic beverages to someone who is visibly intoxicated when that intoxication is the proximate cause of the injury or damage to another person. In 1991, the Alabama Supreme Court in McIsaac v. Monte Carlo Club, Inc. interpreted the statute to create strict liability on the part of the establishment which served alcohol. 587 So. 2d 320 (Ala. 1991).
The 1909 Dram Shop Act required an injured plaintiff to prove that the establishment’s service of alcohol was (1) contrary to the provisions of law; (2) was the cause of the intoxication; and (3) resulted in the plaintiff's injury. Because it was deemed contrary to law to serve a patron who was already intoxicated, the injured plaintiff need only show the defendant was legally intoxicated when served, and that plaintiff’s damages were “in consequence of the intoxication of the person” who was served. Laymon v. Braddock, 544 So. 2d 900, 903 (Ala. 1989).
Moreover, the injured plaintiff’s complicity or contributory negligence were not considered valid defenses for Dram Shop defendants. For example, the fact that the injured party was a friend who contributed to the tortfeasor’s consumption of alcohol and was injured as a result would not defeat his claim against the establishment for its over-service of alcohol. Assumption of risk, however, remained a valid defense for the Dram Shop defendant. Assumption of the risk is based on the concept that the plaintiff “knowingly assented” to the risk, whereas complicity or contributory negligence are merely a “matter of involvement.” McIsaac, 587 So. 2d at 325.
As a result of this law, Alabama’s insurance risk grade for liquor liability was a “10,” which is the highest rating and indicates maximum risk. This resulted in high insurance premiums for establishments serving alcohol in the State of Alabama.
On April 19, 2023, the Alabama State Legislature passed Senate Bill 104, which repealed the strict liability standard with regard to dram shop cases set forth in McIsaac and further added a “knowingly” standard. Under the new standard, an establishment can only be held liable if it “knowingly sells, furnishes, or serves alcoholic beverages to an individual contrary to the provisions of the law, who was visibly intoxicated, when the sale, furnishing, or serving is the proximate cause of such injury or damage.” The term “knowingly” is defined by the statute as “knew or should have known under the circumstances.” The term “knowingly” is an objective standard for the jury – that is, whether an objectively reasonable server should have known of the intoxication under the circumstances. Now, plaintiffs have the additional burden of proving that the establishment was aware that the customer was intoxicated but chose to serve him anyway, contrary to the provisions of the law.
Attorneys have noted this new standard has makes Dram Shop claims more difficult, even though under the previous statute, proof of “visible” intoxication was required. Under the 2023 revision, not only must the plaintiff show that the patron was “visibly intoxicated,” the plaintiff must also show that the establishment nevertheless knowingly served him or her.
Under the pre-amended Dram Shop Act, simply proving that someone was intoxicated and subsequently served was easier than the current requirement: proving that the server knew or should have known that the person was intoxicated. Since the passage of the law in April 2023, there has been only one published Dram Shop case under the new standard, and that case was partially decided on statute of limitations grounds. Ex parte Thompson, No. SC-2025-0127, 2025 WL 2738966 (Ala. Sept. 26, 2025). It is perhaps too soon to know whether fewer dram shop cases will be successful (or even filed) under the new standard. One certain result of the Dram Shop Act amendment has been a reduction in the risk to liability insurers and a resultant lowering of liability insurance premiums paid by establishments which serve alcohol.
Attorney Contact Info
Derek Goff
derek.goff@swiftcurrie.com
205.314.2408