Catherine Ferrando: As a DC parent and bar owner, I care about responsible alcohol service — but liability reforms are necessary
I’m a longtime DC music venue and bar owner, but my primary job is being a mother. Ever since my daughters were very young, I have been frank with them about the potential dangers of alcohol, while modeling responsible behavior in our household — all with the intent that when they come of age, they will make good choices. If anything were ever to happen to my family because of the actions of someone who made poor choices, I would want the offenders to be held responsible.
I have the same expectations at Black Cat, my place of business, especially when it comes to alcohol consumption and liability. Every state has specific rules governing liability when an intoxicated person injures another person. Some of them — DC among them — also have “dram shop” or “host liability” laws where claims can be made against the person or business that served the alcohol.
But in the District our dram shop laws are problematic because they are being used in ways far from their original purpose. They were initially drafted as part of a regulatory framework meant to establish rules for the District to enforce, rather than specifically designed to create a basis for civil lawsuits. As a result, the potential liability that businesses face is not only ill-defined but also unlimited by any monetary cap on damages. The lack of clear-cut guidelines has given plaintiffs a nearly unlimited power to pursue lawsuits against bars, restaurants and other venues.
This uncertainty has made insurance rates astronomical in the District compared to other states — up to 10 times higher than those for similar establishments right across the border in Maryland or Virginia. It’s no surprise that insurance carriers have labeled the District the second-worst place to provide coverage in the country. Bars and restaurants have little choice in insurance options, and rates have become high enough to make it difficult or impossible for some businesses to carry liquor liability insurance at all.
The exorbitant costs make it hard for businesses of all sizes, but they disproportionately affect small, independently owned neighborhood bars and restaurants. At Black Cat, we have worked hard to create a culture of responsibility and vigilance, and we are fortunate that throughout our almost three decades of operating we have avoided any liquor liability claims. Despite our stellar record, finding reliable insurance remains a challenge. Most insurers simply won’t offer us coverage, and others have dropped us after a year or two — often because they have pulled out of DC’s insurance market altogether.
So, we find ourselves constantly scrambling to find new insurers and policies that we can afford. It’s also opened the doors for some bad actors in the insurance business that prey on this challenging market. Such insurance is not required, but a business that cannot afford liquor liability insurance faces the much greater risk of a single lawsuit bankrupting them, no matter how careful and vigilant their behavior.
Thankfully, the DC Council has recognized this problem and is considering legislation that would establish more clarity. The Dram Shop Clarification Amendment Act better defines the term “intoxicated,” and it clarifies that licensed establishments can be held liable for consequent injury and damages only if they knowingly serve, sell or deliver alcohol to a person under 21 years of age or a person who is obviously or noticeably exhibiting signs of intoxication. The legislation — introduced by Ward 2 Councilmember Brooke Pinto and at-large Councilmember Christina Henderson — would cap monetary damages and permit civil actions only by third-party victims who have been injured by the intoxicated person.
As an attorney as well as a venue owner, I believe that reform is not only fair and logical but also absolutely necessary. It will protect bars and restaurants from frivolous lawsuits and enable them to procure liquor liability insurance from financially stable, legitimate companies at reasonable rates — like those enjoyed by their competitors in Maryland and Virginia. This is important because many restaurants and bars continue to struggle since the outbreak of the COVID-19 pandemic. Insurance is a big-ticket item, and that is particularly hard for small, local shops — exactly the kinds of places DC residents want to keep alive.
Most importantly, the Dram Shop Clarification Amendment Act would set realistic and achievable goals for bars, restaurants, and their employees. When my husband and I go out for a night on the town, or plan to drink several glasses of beer or wine with dinner, we leave our car at home. The businesses that serve us during our evening out should not be at risk of losing their livelihood if we were to make the unforgivable choice to drive home under the influence. If approved, this legislation would make clear that those businesses should not continue to serve alcohol to an obviously intoxicated person, and would hold them accountable for such overserving.
In contrast, right now a business can be held responsible for the damage a patron causes whether or not its employees had reason to know the person they served was intoxicated. The broad nature of this risk can make any attempt to train servers to curtail liability seem hopeless.
The bill also seeks to clarify what businesses should and should not do — and there is a great deal that businesses can do: They can train servers to look for signs that someone is “obviously” or “noticeably” intoxicated. They can cut people off, and they can encourage and assist patrons in finding a safe way home. And if they do serve a noticeably intoxicated person, they can rightly be held accountable.
The DC Council should pass the Dram Shop Clarification Amendment Act, which is currently pending in the Committee on Business and Economic Development. Saddling bars and restaurants with sky-high insurance rates and the constant threat of being sued won’t lower the rate of alcohol-related injuries and damage in our community. Education on the dangers of over-serving — and preventative measures — will.
Catherine Ferrando owns Black Cat with her husband in DC’s U Street Corridor. She is a mother and attorney who lives and works in the District.
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