By Mark Conrad
On August 3rd, a New Jersey appellate court overturned what was the largest liquor liability verdict in the nation against the concessionaire, which had served alcohol to an intoxicated fan at a Giants football game who later swerved his car and collided with another motor vehicle.
The accident caused serious and permanent injuries to a two-year old passenger in that vehicle. In ordering a new trial, the panel, in Verni v. Harry M. Stevens, Inc., 2006 N.J. Super. LEXIS 229, ruled that the trial judge improperly admitted evidence showing that “a culture of alcohol” at Giants games existed and that the concessionaire actions were part of this atmosphere which, along with other “multiple errors in the course of the trial,” justified a remand. The appeals decision was the latest twist in this closely-watched case.
About 90 minutes after the conclusion of the October 24, 1999 Giants home game, the defendant driver, whose blood alcohol level was over twice the legal limit, lost control of his vehicle and collided head-on with the vehicle driven by the plaintiff’s father. The tragic result was quadriplegia for the then-2-year-old plaintiff. Breathing with the aid of a respirator and unable to use her hands and feet, Antonia Verni will need 24-hour care for the rest of her life.
The accident spawned a lawsuit against a number of defendants, including the team, stadium, stadium owner and the NFL. The claims against the New Jersey Sports & Exposition Authority, Giants Stadium, the New York Giants and the NFL were settled shortly after the filing for about $1 million. The intoxicated driver, Daniel Lanzaro, settled for $100,000, the face of his insurance policy, then pleaded guilty to criminal charges and is presently serving a five-year prison sentence.
However, the cases against Aramark Services Management, Inc. (Aramark), the employer of the beer servers and Harry M. Stevens (Stevens), the long-time liquor license holder (and subsidiary of Aramark since 1995) went to trial in late 2004. The jury awarded compensatory damages to Antonia and her mother totaling $109 million, of which $85 million was in punitive damages. Aramark and Stevens were liable for all the punitive damages and one-half the compensatory damages. The driver was liable for the other half.
In an opinion by Presiding Judge Cuff, the panel ruled that the issue of liability of Aramark and Stevens fell exclusively under New Jersey’s version of the “Dram Shop” act, a statute which imposes liability only when a licensed alcohol beverage server negligently serves a visibly intoxicated person, (emphasis added) and bars common law negligence lawsuits against such servers or their agents. N.J.S.A. 2A:22A-4; 2A:22A-5. This narrow definition of negligence, the court noted, prevents the application of regulations or standards governing dispensers of alcoholic beverages or holders of liquor licenses. Therefore, it concluded “the character of the place of dispensation is also inadmissible because it is irrelevant to the central issue.”
The last statement was the linchpin for the court’s conclusion that the trial judge allowance of evidence demonstrating the “culture of intoxication” at Giants Stadium was incorrect and more than an insignificant error. Such evidence included improper employee training and repeated violations of the two-beer sales limit. According to the appellate panel, “plaintiffs’ attorney referred to [the culture of intoxication] in his opening, witness after witness were presented to speak about it, and plaintiffs’ attorney emphasized the theme in his summation.” The opinion added: “[t]he evidence had the clear capacity to mislead the jury, to inflame the jury and to detract from the central issue in the case of whether Lanzaro was visibly intoxicated at the time of service.” What made this prejudicial, was that the evidence was murky as to whether Lanzaro was “visibly intoxicated” as required under the states’ Dram Shop law.
No direct evidence existed as to whether the servers knew of this intoxication. The plaintiff was forced to rely on experts and on Lanzaro’s brother, sister-in-law and friend who claimed he was intoxicated, but not necessarily “visibly intoxicated” when buying the beers. Concluding that the evidence was “less than overwhelming,” the panel admitted that although sufficient evidence existed for the jury to consider whether Lanzaro was visibly intoxicated, it added that it had “no confidence” that the jury was able to evaluate the relevant evidence in a “dispassionate manner” without a prejudicial inference about patterns of intoxication due to actions or inactions by Aramark personnel.
Additionally, the court found error when the trial judge barred the common law negligence action against Aramark during the course of the trial, rather than before its beginning, which was compounded by the absence of a jury instruction that all of the evidence admitted in support of this claim should be disregarded. “By that time, substantial evidence and discussion of the “culture of alcohol was presented, which poisoned the case,” the opinion noted.
For those representing vendors and concessionaires, the Verni appeals court ruling stands as a guard against generalizations about alcohol service and mandates a limited reading of the Dram Shop law. As an action based on a statutory duty, rather than on a more general negligence standard, the ruling clearly helps those representing concessionaires and other licensed alcohol servers. Proving that a vendor served alcoholic beverages to one “visibly intoxicated” is a difficult evidentiary standard to meet, requiring more than a general breach of duty. In fact, on retrial, the lack of direct evidence on that point makes the case more difficult, especially since the kind of “hot button” evidence pertaining to common law negligence would not be admissible. Given the reliance on such points as the nature of the fans at a stadium, the allegedly lax standards and training of personnel (discussed at length during the trial) and the enforcement of rules prohibiting a certain number of drinks by plaintiff’s trial counsel, plaintiffs will have a much tougher task proving Dram Shop liability. Even if liability can be shown, it is unlikely that a jury would be compelled to award the $109 million damage figure.
(Mark Conrad is an associate professor of Legal and Ethical Studies in the School of Business at Fordham University. He recently wrote a book, The Business of Sports – a Primer for Journalists, which is available at http://www.erlbaum.com/ME2/Default.asp)
