A lawyer laptop in the office on desk with text "Dram Shop Rule"

Understanding Dram Shop Law

Gerstner Adam Law June 1, 2023

Restaurants, bars, nightclubs, and other alcohol-serving establishments are in the business to make money. Nonetheless, they are still responsible for ensuring that their patrons and customers do not pose a safety risk to themselves and others. This responsibility is contained in Montana’s dram shop liability laws.  

Dram shop laws are designed to hold alcohol-serving establishments and persons liable for injuries and damages caused by their overserved patrons, customers, and guests. If you believe you have a dram shop liability claim, contact Gerstner Adam Law to discuss your case. Our dram shop liability attorneys in Billings, Montana, can help you seek the compensation to which you may be entitled. We also serve clients in Sidney, Glendive, and Miles City.  

Dram Shop Liability Law in Montana  

Montana’s dram shop law makes an entity (e.g., a bar) or a person (e.g., a social host) liable for injuries and damages arising from incidents involving a person to whom the entity/person furnished alcoholic beverages. However, serving alcoholic beverages alone does not make entities and persons liable. Liability applies when any of the following is true:  

  • Serving alcohol to a visibly intoxicated person;  

  • Serving alcohol to a person under the age of 21 (both when knowing the person’s age and failing to make a reasonable effort to determine the person’s age); or 

  • Forcing or tricking a person into drinking alcohol or falsely telling them that the beverage does not contain alcohol.   

When pursuing a dram shop liability claim, the injured person must prove that their injuries or damages were partially or entirely caused by the incident involving the person who was served alcohol.  

Example: A bartender continues to serve alcohol to a customer who is visibly intoxicated. The customer leaves the bar and ends up causing a motor vehicle accident due to their impairment. The incident causes injuries to another person. Under Montana law, the injured victim can pursue a dram shop liability claim to sue the bar for damages.  

Applicability of Montana’s Dram Shop Law 

Montana’s dram shop law applies to both entities and persons. In other words, it means that those who host private parties can also be held liable under the state’s dram shop liability law. However, social hosts are exposed to personal liability, which can have severe consequences.  

Example: John throws a party at his home and invites a group of people, including Sarah, who drives herself to the party in her car. Everyone drinks alcohol, and John continues to serve alcohol to Sarah even after she is visibly intoxicated. By the end of the party, John walks Sarah to her car and she drives away. Sarah ends up causing a car accident. John could be held liable in this scenario because he continued to serve alcohol to Sarah when she was visibly intoxicated and also allowed her to get behind the wheel of her car.  

Statute of Limitations  

When it comes to bringing a dram shop liability claim, you need to understand the statutory limitations that apply to your case. In Montana, the dram shop law requires injured victims to give notice to the entity or person who furnished alcohol within 180 days from the date of sale/service. If this requirement is not met, the injured victim may be barred from recovering damages.  

Provided that proper notice has been given, the injured victim then has two years from the date of sale/service to pursue a civil action under Montana’s dram shop liability law, though other negligence-based personal injury claims in the state generally have a three-year limit.  

Recoverable Damages 

Like other civil actions, dram shop liability claims allow the plaintiff (the injured victim) to obtain compensation (known as damages) when suing the liable entity or person. Recoverable damages include: 

  • property damage 

  • loss of income 

  • medical expenses 

  • pain and suffering 

There may also be other damages available in your claim. You might want to consult with a dram shop liability attorney to determine available damages and calculate how much your claim is worth. It is important to note, however, that Montana law limits damages in dram shop liability claims to $250,000. When punitive damages are available, they are also capped at $250,000.  

Dram Shop Liability Attorneys Ready to Serve You     

There is nothing worse than suffering an injury that could have been prevented, especially when the injury is the result of someone else’s alcohol impairment. If this situation happened to you or your loved one, you might be entitled to compensation. Contact our dram shop liability attorneys at Gerstner Adam Law to discuss your options for compensation. Fill out the submission form to tell us about your case.