A decision of the Louisiana Court of Appeal for the Third Circuit involving underage drinking is an important reminder to retailers of alcoholic beverages.

Act 18 of the 1986 Louisiana Legislature, effective June 6, 1986, provides, in part:

The legislature finds and declares that the consumption of intoxicating beverages, rather than the sale or serving or furnishing of such beverages, is the proximate cause of any injury, including death .... inflicted by an intoxicated person upon himself or upon another person.

....no person holding a permit.... nor any agent, servant, or employee of such person, who sells or serves intoxicating beverages of either high or low alcoholic content to a person over the age for lawful purchase thereof, shall be liable to such person or to any other person or to the estate, successors, or survivors of either for any injury suffered off the premises, including wrongful death and property damage, because of the intoxication of the person to whom the intoxicating beverages were sold or served.

This statute was the subject of scrutiny by the Third Circuit Court of Appeal in November of 1993. In Hopkins v. Sovereign Fire & Casualty Insurance Company, et al, the sales clerk at a liquor store sold beer and alcoholic beverages to a 14 year old girl, apparently mistaking her for an 18 year old. The 14 year old girl shared the alcohol with friends, and, not long thereafter, a serious traffic accident occurred, resulting in injuries. The trial court dismissed several defendants, including the retailer that sold the alcohol. The Court of Appeal reversed this decision, in effect ordering the retailer to stand trial.

The importance of the Hopkins case lies in its reminder that the above statute, which was designed to protect retailers of alcoholic beverages from lawsuits arising out of the intoxication of the purchasers of those beverages, has a very important exception. The exception provides that the purchaser of the beverages must be over the age for the lawful purchase thereof. R.S. 14:91, part of the Louisiana Criminal Statutes, provided (at that time) that one must be at least 18 years of age to purchase alcoholic beverages. (The statutes now require one to be at least 21 years of age to purchase alcoholic beverages).

Although Hopkins was decided on a Motion for Summary Judgment, which was reversed by the appellate court and remanded for trial on the merits, the statements made by the appellate court are most important and should be taken to heart by all LRA members. The retailer in Hopkins claimed that the sale, even though made to a 14 year old girl, did not render the retailer liable, since the 14 year old girl subsequently transferred the alcohol to her minor friends. In fact, the girl was accompanied by two male companions, (both of whom were minors), when the purchases of the alcoholic beverages were made, and the court found that it would be difficult for the retailer to claim lack of knowledge in light of the volume of alcohol purchased by the girl in a short period of time, and in the presence of other minors. In addition, the alcohol was purchased "cold and ready to drink." Thus, the red flags are clear, and retailers should especially be aware of:

1. LARGE QUANTITIES OF ALCOHOLIC BEVERAGES BEING PURCHASED.

2. BEVERAGES PURCHASED COLD, READY TO DRINK.

3. PURCHASES BY AN INDIVIDUAL WHO COMMON SENSE TELLS US MAY BE A MINOR.

The courts have rather remarkably read the letter of the law in other cases involving sales of alcoholic beverages to adults who then distribute the alcohol to minors. For example, in Boudreaux v. Delchamps, Inc., 567 So.2d 700 (La.App.3rd Cir.1990), the Court of Appeal for the Third Circuit was presented a lawsuit in which a supermarket had sold beer to an 18 year old, who was of legal age to purchase the beer. The older boy then shared the beer with minor friends, one of whom was the driver in a subsequent auto accident. The purchaser was selected by his peers to make the purchase, since the other members of the group were not yet 18 years of age. Even though several of the younger boys accompanied the 18 year old into the store and to the cash register, the Court of Appeal held that the supermarket could stand behind the Dram Shop Statute and, since the 18 year old was the individual who handed the money to the cashier and purchased the beer, no liability was imposed upon the supermarket. The Boudreaux decision is probably an example of the outer limits of how far the Louisiana courts will go in protecting a retailer. This was a 2-1 decision by the Court of Appeal, in which the dissenting Judge noted that all of the boys had pooled their money and gave the money to the 18 year old.

Many liability insurance companies have exclusionary clauses in their policies carving out coverage for liability of the insured for sales of alcoholic beverages to minors. In Morris v. Nu-Way Beverage Co., 591 So.2d 1318 (La.App. 2nd Cir. 1991), the parents of children injured in an automobile accident sued a grocery store and the grocer's insurer alleging that the sale of alcoholic beverages to minors was the proximate cause of the accident.

The insurance company claimed that its policy did not apply to lawsuits arising out of the sale of liquor to minors, and the court agreed with the insurance company. Thus, not only did the retailer find himself stuck with the liability for the damages that had occurred after the sale to the minor, but he also found himself without insurance.

An important point to remember is that lack of knowledge of the age of the purchaser is not a defense to a lawsuit for damages caused by the intoxication of a minor who causes damage to himself or third parties.

An unusual "quirk" in Louisiana law prior to 1996 provided that persons younger than 21 years of age were prohibited from illegally purchasing alcoholic beverages. However, at that time, the alcoholic beverage statutes prohibited the selling of alcoholic beverages only to persons under 18 years of age. In other words, although a tavern owner could sell to a person over 18 years of age, a person between 18 and 20 years of age could not legally purchase the alcoholic beverages. In Godfrey v. Boston Old Colony Insurance Company, 718 So. 2d 441 (4th Cir. 1998) the Court of Appeal considered whether the statute's limitation of immunity to vendors selling alcoholic beverages to a person "over the age for lawful purchase" of alcohol extended only to sales to minors (i.e. those persons under 18 years of age), or included sales to all persons under the age of 21. The Court found that the statute validly prohibited the sale of alcoholic beverages to all persons who have not yet attained the age of 21 years, including the sale of alcoholic beverages to majors between the ages between the ages of 18 and 21. Thus, dram shop immunity did not extend to vendors selling alcohol to a major between 18 and 21 years.

CONCLUSION

The combined effect of liability insurance policies that contain exclusionary clauses denying coverage for liability for sales to minors, along with the clear exception for sales to minors in the Louisiana statutes, should be a warning and reminder to all retailers: BE CAREFUL AND KNOW THE AGE OF YOUR CUSTOMERS. IF IN DOUBT, REFUSE TO MAKE THE SALE.

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