When Can People Selling or Serving Alcohol Be Held Liable?

It is illegal for a person to manufacture, sell or deal in spiritu­ous liquors in Arizona without being properly licensed. A per­son to whom a liquor license is issued is called a “licensee.” The law imposes civil liability on a licensee who serves an intoxicated person or a person under 21 years of age who, in turn, causes property damage, personal injuries or death.

A licensee may be liable for property damage and personal injuries, or to a person who may bring an action for wrongful death, if the licensee sold alcohol either to someone who was obviously intoxicated, or to an underage drinker without requesting proper identification or with knowledge that the person was under 21. For the licensee to be liable, the pur­chaser must consume the alcohol sold by the licensee and the consumption must be the proximate cause of the injury, death or property damage.

The term “obviously intoxicated” means inebriated to such an extent that a person’s physical faculties are substantially impaired and the impairment is shown by significantly unco­ordinated physical action or significant physical dysfunction, that would have been obvious to a reasonable person.

If an underage person purchases alcohol from a licensee and that person incurs or causes injuries or property damage as a result of the consumption of alcohol within a reasonable period of time following the sale of the alcohol, it will be presumed that the underage person consumed the alcohol sold by the licensee.

A licensee is not liable to any consumer or purchaser of alcohol over the legal drinking age who is injured or whose property is damaged as a result of the sale or serving of alcohol to that person. Similarly, a licensee is not liable in damages to any other adult who was with the person when the alcohol was drank and who knew of the impaired condi­tion of the person.

The law contains a social host exemption. A social host is not liable to any person who is injured, or to the survivors of any person killed, or for damage to property, which is caused by the furnishing or serving of alcohol to a person of legal drinking age. However, this exemption does not apply to a social host who furnishes alcohol to an underage drinker.