Commercial Host Liability and the Prevention Status Reports

What are the Prevention Status Reports?

As described by the CDC, “the Prevention Status Reports (PSRs) highlight – for all 50 states and the District of Columbia – the status of public health policies and practices designed to address [10] important public health problems and concerns.”12 The public health problems included in the PSRs are: alcohol-related harms; food safety; healthcare-associated infections; heart disease and stroke; HIV; motor vehicle injuries; nutrition, physical activity, and obesity; prescription drug overdose; teen pregnancy; and tobacco use.12 For alcohol-related harms, the two evidence-based policies on which the 2015 PSRs report are commercial host liability and state excise taxes.13 The 2013 PSRs also reported on local authority to regulate alcohol outlet density (e.g. state preemption).1

(Return to top)

Why is commercial host liability included in the PSRs?

To be included in the PSRs, a public health policy must be backed by evidence. More specifically, it must meet at least one of three criteria:

  • Supported by systematic review(s) of scientific evidence of effectiveness (e.g., The Guide to Community Preventive Services);
  • Explicitly cited in a national strategy or national action plan (e.g., Healthy People 2020); or
  • Recommended by a recognized expert body, panel, organization, study, or report with an evidence-based focus (e.g., Institute of Medicine).14

Commercial host liability meets all three evidence criteria.

Systematic reviews of the literature: The Community Preventive Services Task Force (Task Force) is an independent, nonfederal body of research experts. The Guide to Community Preventive Services (The Community Guide) is based on a scientific systematic review process that examines the effectiveness of various public health strategies. Based on these reviews, the Task Force produces recommendations to help inform the decision-making of federal, state, and local health departments as well as other stakeholders and partners. The Community Guide systematic review process was used to assess 11 research studies on the impact of state commercial host liability laws. It found that the laws were consistently related to reductions in diverse adverse public health outcomes, including motor vehicle fatalities overall, alcohol-related motor vehicle fatalities, alcohol consumption behaviors, and alcohol-related violence. Babor et al. (2010) also conducted reviews of the research literature on commercial host liability laws and reached similar conclusions.15

Cited in a national strategy or national action plan: In 2003, the National Research Council (NRC) and the Institute of Medicine (IOM), now the Health and Medicine Division of the National Academies of Sciences, Engineering, and Medicine, recommended that states enact or strengthen their commercial host liability statutes as part of a national action strategy to prevent underage drinking. Congress requested that NRC/IOM develop the plan and authorized funding.6

Recommended by expert bodies, panels, organizations, studies, or reports with an evidence-based focus: Both the Task Force and the IOM explicitly recommend commercial host liability laws as a strategy, based on strong evidence of effectiveness for preventing and reducing alcohol-related problems.6,16

In addition to meeting one of the three criteria noted above, in order to be included in the PSRs, a public health policy must have sufficient data available such that the policy can be tracked and reported across all 50 states and the District of Columbia. Commercial Host Liability meets this criterion. For example, data on liability for serving minors are available from the Report to Congress on the Prevention and Reduction of Underage Drinking, produced by the U.S. Department of Health and Human Services.10

(Return to top)

The PSRs reference and briefly describe 4 “major limitations” to commercial host liability. What does each of these limitations entail?

The PSR ratings take into account 4 major limitations to commercial host liability laws. These limitations, which are enacted by state legislatures, typically have the effect of weakening the commercial host liability law.1,2,3

The 4 limitations recognized by the PSRs are:

  1. Underage liability and adult intoxication liability.
    Generally, commercial host liability may apply when an alcohol retailer either: (1) serves/sells to a visibly or obviously intoxicated person (either adult or underage); or (2) serves/sells to an underage person (whether intoxicated or not). Some states have passed laws that limit liability to just one of these possible retailer actions, with liability for service to underage patrons much more likely to be recognized than adult liability.
  2. Increased evidentiary requirements for finding of liability.
    Generally, the injured third party (known as the plaintiff in the lawsuit), must show that it’s more likely than not (i.e., by a “preponderance of the evidence”) that the retailer acted negligently. But many states now require injured parties to meet an even higher standard of evidence of wrongdoing by the retailer. These higher evidentiary requirements fall into three categories:

    • Increased burden of proof: Some states require plaintiffs to establish the facts of the case with more certainty than a preponderance of the evidence (more likely true than not), which is a lower level burden of proof. Burdens of proof with higher standards include the medium-level burden “clear and convincing evidence” (substantially more likely true than not), and the highest level burden “beyond a reasonable doubt” (moral certainty of truth).
    • More egregious behavior on the part of the retailer: Generally, the retailer must be shown to have acted negligently, but some state statutes require the injured party to show that the retailer acted recklessly or intentionally, which can be more difficult to prove.
    • Additional elements: Some states have restricted liability to only certain types of events. For example, in California, liability is allowed only if the retailer serves an obviously intoxicated underage person.
  3. Limitations on damage awards.
    If the injured third party establishes liability, generally he/she is entitled to recover financially from the retailer and other persons at fault (e.g., the intoxicated or underage patron) for all costs associated with the injury, including pain and suffering. In addition, damages to punish the retailer (“punitive damages”) may be possible if the retailer’s actions are determined to have been egregious. However, many states limit how much injured parties can recover by establishing a damage cap – that is, by placing a ceiling on how much an injured party can be awarded and/or by restricting the types of damages recoverable (e.g., prohibiting or limiting punitive damages).
  4. Restrictions on who may be sued.
  5. Some states apply commercial host liability only to on-premises alcohol retailers (such as bars), and exempt off-premises alcohol retailers that sell alcohol for consumption at another location (such as liquor stores). For example, Texas has a unique law that permits liability only if the server is 21 years or older and he/she serves someone 18 years or under.3

(Return to top)

Are there other limitations to commercial host liability not considered in the PSR ratings, and if so, what are they and why are they excluded from the PSR coding?

There are numerous other limitations on commercial host liability, often enacted by state legislatures, which are not included in the PSR ratings. Those limitations include:

  • Relatively short time period during which a lawsuit must be filed (short “statute of limitations”)
  • “Name and retain” requirements (intoxicated or underage patron who caused the injuries must be sued at the same time as the retailer)
  • Notice requirements (injured party must alert the retailer of a possible lawsuit within a short period of time from when the injury occurred)
  • Retailer’s potential liability is limited to his/her portion of fault, rather than the entire amount of damages (in legal terms, “joint but not several liability”)
  • Responsible Beverage Service affirmative defense (a retailer who follows Responsible Beverage Service practices is not liable)3,11

The existence and extent of these and other statutory limitations may vary by state. Many limitations have complex components that are difficult to compare across states. The PSRs relied on a CDC-funded research report to identify the most important limitations to include in its ratings, and the current ratings thus incorporate only those limitations.3,17

(Return to top)

In the context of commercial host liability, what do the PSR classifications green, yellow, and red mean?

As noted on the CDC’s PSRs website, a “green” rating indicates that the policy or practice is established in accordance with supporting evidence and/or expert recommendations. A “yellow” rating indicates that the policy or practice is established in partial accordance with supporting evidence and/or expert recommendations. Finally, a “red” rating indicates that the policy or practice is either absent or not established in accordance with supporting evidence and/or expert recommendations.

Accordingly, states with a green rating recognize the commercial host liability policy without any of the 4 major limitations listed above; states with a yellow rating recognize this form of liability but with 1 or more major limitations; states with a red rating do not recognize this form of liability.

(Return to top)

If my state has a green rating, is there a reason to be monitoring the policy over time?

It is advantageous for public health constituencies to be alert to proposals in their state legislatures to weaken commercial host liability laws, particularly since it can be difficult to monitor all court cases, and since many courts defer to the legislature when it comes to the adoption of such laws. As discussed in the trends section below, many states have weakened their laws by adding 1 or more of the major limitations, which make the laws less effective. Adding these limitations in states with green ratings changes their PSR ratings to yellow.

(Return to top)