In Klar v. Dairy Farmers of America, Inc., 300 A.3d 361 (2023), the Supreme Court of Pennsylvania recently addressed the issue regarding the distinction between a “social host” and a liquor licensee, in its interpretation of Dram Shop Act, and its progeny of case law. The Court determined that, unlike a licensee, who engages in the commercial sale of alcohol, no liability can be placed on the part of a social host who serves alcohol to his or her adult guests.           

David Klar (“Klar”) filed suit against Dairy Farmers of America, Inc. (“DFA”) and DFA’s employee, Roger Williams (“Williams”) stemming from a motor vehicle accident that occurred on August 17, 2014, when William’s vehicle collided into Klar’s motorcycle, causing Klar to suffer numerous injuries. Earlier that day, Williams had attended a DFA-sponsored golf outing. DFA employees, including Williams, were required to provide monetary contributions to offset the costs and expenses associated with the golf outing, including greens fees, food and alcohol. Alcohol was available to all attendees on a self-serve basis from coolers. No one was selling alcohol on a per-drink basis. While at the golf outing, Williams consumed alcohol, and then proceeded to drive with a blood alcohol concentration of approximately 0.23% – nearly three times the legal limit.

In the Complaint, Klar asserted that DFA should be held liable for furnishing, serving, and providing Williams alcohol. DFA filed a Motion for Summary Judgment arguing that it could not be held liable for Klar’s injuries because it was merely a “social host,” not a “licensee.” The trial court granted the Motion, finding that only licensed persons engaged in the sale of intoxicants are civilly liable to injured parties and, therefore, because DFA was not licensed to sell alcohol, it could not be liable. The trial court concluded that DFA was a “social host” because collecting money from its employees to purchase alcohol was more akin to friends sharing a meal and drink.

Klar appealed this decision to the Superior Court. On appeal, Klar argued that the Dram Shop Act applies to a much broader range of persons and entities than just licensees, in that it prohibits “any licensee or the board, or any employer, servant or agent of such licensee or of the board, or any other person” from selling, furnishing or giving alcohol to a visibly intoxicated person. Klar argued that DFA assumed licensee status when it collected funds from its employees to purchase alcohol for the golf outing. The Superior Court disagreed, and cited to Manning v. Andy, 310 A.2d 75 (Pa. 1973), in holding that DFA was undisputedly not a licensee and, therefore, could not be held liable for a violation of the Dram Shop Act. In coming to this conclusion, the Superior Court found that a collective purchase of alcohol by a group is not viewed as a “sale” from one member group to the others.[1]

The Superior Court further applied the Supreme Court’s ruling in Klein v. Raysinger, 407 A.2d 507 (Pa. 1983), which held that social hosts who serve alcohol to his or her adult guests are not subject to liability in common law negligence for the actions of their guests.  In Klein, the Supreme Court further held that the conduct of a social host who furnishes alcohol to an adult is not the proximate cause of a subsequent occurrence, noting the driver “chose to drink and chose to drive,” and that ordinary, competent adults are responsible for their own actions – regardless of the fact that the alcohol was collectively purchased. Accordingly, the Superior Court upheld the trial court’s decision, concluding, under Manning and Klein, that DFA was not liable for a violation of the Dram Shop Act or under a common law negligence theory.

On appeal to the Supreme Court, Klar argued that everyone has a duty to avoid providing alcohol to visibly intoxicated individuals, regardless of one’s status as a “licensee” under the Liquor Code. Klar argued again that the Dram Shop Act applies to “any licensee or the board, or any employe, servant or agent of such licensee or of the board or any other person.”

Klar further argued, again, that the use of the employees’ pooled money to purchase alcohol means that it received “consideration” and, thus, it unlawfully “sold” alcohol to the visibly intoxicated Williams.” Accordingly, Klar proclaimed that Klein was wrongly decided and argued the responsibility to ensure that the intoxicated individual does not further indulge lies on the host.

In contrast, DFA argued the lower courts correctly applied the existing precedent to concluded that DFA was immune from liability under both the Dram Shop Act and any common law negligence theory. DFA argued that, because it collected its employees money only to offset the shared expenses of the golf outing and it did not sell or serve the drinks, it remained a “social host” that could not be held liable.

The Supreme Court interpreted the Dram Shop Act, specifically the applicability of “any other person” under the doctrine of ejusdem generis (“of the same kind or class”) and determined that “any other person” encompasses persons who fall within the same general class as a “licensee, the board,” or an “employe, servant or agent of a licensee or the board.” The Court found that all the specifically listed persons engage in the commercial sale of alcohol and that “any other person,” mentioned immediately after these persons, also engage in the business of selling alcohol. Accordingly, the Cout held that “any other person” refers to the persons and entities that fall into the same general category as a “licensee,” the “board,” or an “employe, servant or agent of a licensee or the board.” Therefore, the Court declined to interpret “any other person” to broadly include all non-licensees in all circumstances, as Klar requested.

In sum, the Supreme Court found that the trial court was entirely correct to conclude that, in order to establish a basis for Dram Shop liability, the plaintiff must show that the defendant is “either a licensee or stepped into the shoes of a licensee.” Here, because there was no commercial sale of alcohol, and because DFA did not fall into the category of  “licensee,” the “board,” or an “employe, servant or agent of a licensee or the board,” the Dram Shop Act is inapplicable to DFA. The Court held that it agrees with the common law view, articulated in Klein, that no liability can be placed on the part of a social host who serves alcohol to his or her adult guests. Accordingly, DFA’s act of merely pooling money for a collective purchase of alcohol for shared consumption did not trigger civil liability under the Dram Shop Act and common-law negligence  for the injuries caused by its intoxicated guest.

The Klar v. Dairy Farmers of America, Inc. decision can be found here.

For additional questions, please contact Anthony M. Cognetti, Esq. and/or Conrad James Benedetto, Esq.

This article was prepared by McCormick & Priore, P.C. to provide information on recent legal developments of interest to our readers. This publication is in no way intended to provide legal advice or to create an attorney-client relationship. All Rights Reserved. This article may not be reprinted without the express written permission of McCormick & Priore, P.C.

[1] See Commonwealth v. Peters, 2 Pa. Super.1 (Pa. Super. 1898) (concluding that the man who made the purchase with joint funds from two other men to split the cost of a bottle of whiskey, did not “sell” the whiskey to the other two);  see also, Brandjord v. Hopper, 688 A.2d 721 (Pa. Super. 1997) (affirming the dismissal of a suit against a group of individual who purchased beer together for a Philadelphia Eagles tailgate, one of whom drove drunk and caused a motor vehicle collision).