MINUTES OF THE SENATE COMMITTEE ON JUDICIARY Sixty-eighth Session June 5, 1995 The Senate Committee on Judiciary was called to order by Chairman Mark A. James, at 9:10 a.m., on Monday, June 5, 1995, in Room 224 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Attendance Roster. COMMITTEE MEMBERS PRESENT: Senator Mark A. James, Chairman Senator Jon C. Porter, Vice Chairman Senator Maurice Washington Senator Mike McGinness Senator Ernest E. Adler Senator Dina Titus Senator O. C. Lee STAFF MEMBERS PRESENT: Allison Combs, Senior Research Analyst Marilyn Hofmann, Committee Secretary OTHERS PRESENT: Judy Jacoboni, Lobbyist, President, Lyon County Chapter, Mothers Against Drunk Driving Laurel Stadler, Lobbyist, Legislative Liaison, Mothers Against Drunk Driving Roger S. Trounday, Executive Vice President, John Ascuaga's Nugget, Lobbyist, Nevada Resort Association Burton M. Cohen, Consultant, Nevada Resort Association Robert D. Faiss, Attorney at Law, Lobbyist, Nevada Resort Association Paul E. Larsen, Attorney at Law, Lobbyist, Nevada Resort Association Kay Scherer, Vice President, Public Relations/Research Division, R&R Advertising Senator James asked for committee introduction of Bill Draft Request (BDR) 14- 1455. BILL DRAFT REQUEST 14-1455: Revises provisions governing plea bargains and appeals in certain criminal actions. SENATOR PORTER MOVED FOR COMMITTEE INTRODUCTION OF BDR 14- 1455. SENATOR LEE SECONDED THE MOTION. THE MOTION CARRIED. (SENATORS TITUS, WASHINGTON AND ADLER WERE ABSENT FOR THE VOTE.) * * * * * Senator James opened the hearing on Senate Bill (S.B.) 498. He indicated this bill is termed "dram shop legislation." SENATE BILL 498: Creates cause of action for sale of liquor to intoxicated person or minor. The first to testify on the bill was Judy Jacoboni, Lobbyist, Chapter President, Lyon County Chapter, Mothers Against Drunk Driving (MADD). Ms. Jacoboni presented written testimony set forth herein as Exhibit C. She also referenced a letter from Mr. and Mrs. Leo Reginato of Petaluma, California, regarding a visit to Reno. That letter is attached as Exhibit D. The next to appear was Laurel Stadler, Lobbyist, Legislative Liaison for MADD. Ms. Stadler first read into the record a letter from Sharon Zadra, set forth herein as Exhibit E. Ms. Stadler then proceeded to present her prepared statement, attached hereto as Exhibit F. She added MADD suggests an amendment to the bill to "preclude any offenders or non-innocent victims having opportunity under this law." Senator James indicated he wished to asked questions regarding policies concerning "dram shops." First, he noted an establishment will be liable if it serves liquor to a visibly intoxicated person, and that person then causes an accident with injuries. The chairman said a sign of being "visibly intoxicated" is slurred speech, stumbling when walking, or similar actions. He then asked, "Where is the causation? If somebody is already drunk...there is no exception here that says you had to be the one to get him drunk in the first place." Senator James continued, "The last drink server has the liability." Ms. Jacoboni answered, "Only liability to the degree of his contributory negligence...if witnesses would state that the previous server also served a visibly intoxicated person." Senator James asked, "But how about the person who got him [the visibly intoxicated person] there..how about the people who served all the drinks that got him to the one drink before he was visibly intoxicated? Is that OK?" Ms. Jacoboni responded, "That is not OK...but only the one served after would be the irresponsible server...the one that would be liable civilly, but only to the degree of their responsibility." Ms. Stadler stated the burden of proof will be on the plaintiff and added, "If they can't backtrack and prove in a court of law...then they will not have a case." Senator James continued, "There seems to be a problem with the last drink being what caused an accident...that really isn't what caused it...." Ms. Jacoboni stated the intent of the legislation is to impose strict liability on an establishment which serves liquor to a minor who causes an accident. She said MADD believes this is a "very promising concept," which will aid in upholding the minimum-age drinking laws. Senator James asked Ms. Jacoboni to state the reason "for singling out those who serve for profit." Ms. Jacoboni answered the original bill which was requested included social hosts. Senator James said he does not believe there is any reason to make a distinction between an establishment and a social host. Ms. Jacoboni indicated the bill should be amended to say anyone who is a party to the intoxication and has an accident can take an action against the establishment which served the drinks. Senator Lee stated, "[Let us say] I had five drinks from five establishments...and a jury awards $100,000 to the victim [of an accident I caused]...would that $100,000 be divided by five?" He asked if the legislation will allow that the first establishment is equally as guilty as the establishment which served the fifth drink, "...if I was not visibly intoxicated...?" Ms. Stadler answered she does not believe that is the intent of the bill. However, she said a plaintiff could bring an action against as many persons or establishments as he or she feels were responsible. She said the matter will be for a court to determine. Senator Lee stated, "If this legislation authorizes a victim to recover damages from multi-establishments...I have a problem with allowing someone to arbitrarily decide which one of those five establishments is more guilty." He added, "If I wasn't ever at establishment number one, then number five would not be a problem...because I haven't reached that intoxication yet...." Senator Lee continued, "If I was at all five, it seems to me all five should be equally guilty under this hypothetical proposal." Ms. Stadler repeated that is a decision for a judge and jury. She added, "This bill simply gives the innocent victim the opportunity to present the facts before a court of law." Senator James stated the committee must "figure how it works hypothetically." He referenced persons who drink in hotels and casinos and asked, "How do you even know somebody is driving...they are just walking around...." Senator James said a hotel/casino would have to assume everybody is driving. He cited an example of a small bar where a patron drives up, "staggers in," and asks for a drink. The chairman asked if in that scenario the bartender refuses to serve the intoxicated person a drink, and that person indicates he will go to another bar, will there be a responsibility on the part of the bartender to keep the patron from leaving. Ms. Jacoboni stated the legislation does not require an establishment to intervene in any way. She added, "Their moral duty is very clear, but their civil culpability in that instance would not be any greater than it is now." Senator Adler asked if the intention of MADD is that S.B. 498 only apply to minors. Ms. Stadler reiterated the original bill draft request was to relate to minors, but minors and "intoxicated persons" are included in the final draft. She said they will support the bill as written and will support it if it only pertains to minors. Senator Adler pointed out if a minor goes from bar to bar, and eventually has an accident, all bars will be liable because they served drinks to that minor. Ms. Stadler agreed. Senator Adler asked if, in the case of an adult, the first bar where a witness could say a person was visibly intoxicated, but was served liquor, will be culpable. Ms. Stadler agreed with the senator's interpretation. Senator Adler then asked if the phrase set forth in section 3(2) of the bill will apply to both situations, and Ms. Jacoboni and Ms. Stadler answered it will. Senator James thanked Ms. Jacoboni and Ms. Stadler for their presentation to the committee. There were no other proponents who wished to speak. Appearing before the committee in opposition to S.B. 498 were Robert D. Faiss, Attorney at Law, Lobbyist, Nevada Resort Association (NRA); Roger S. Trounday, Executive Vice President, John Ascuaga's Nugget, Lobbyist, NRA; Burton M. Cohen, Consultant, NRA; and Paul E. Larsen, Attorney at Law, Lobbyist, NRA. The first person to speak was Mr. Faiss, who opened with the following statement, "The Nevada Resort Association believes in strong enforcement of state and local liquor laws and punishment for those who violate them." He then spoke from prepared remarks, which are set forth herein as Exhibit G. Mr. Faiss presented an amendment to the bill, which is attached as Exhibit H. Mr. Larsen explained the amendment to the committee. He said the bill as a whole is "merely a codification of existing common law in the State of Nevada." Mr. Larsen said that common law is primarily articulated through three key cases, which are set forth on pages 1 and 2 of Exhibit G. He said the bill codifies the judicial finding that the proximate cause of alcohol-related injuries is the consumption of alcohol, and not the furnishing of that alcohol. Senator James asked, "Why does dram shop liability...have a statute or some landmark case in each state to adopt it...why doesn't it come within the regular realm of negligence cases...where if it's foreseeable, there is liability...?" He queried why it must be recognized as a separate tort. Mr. Larsen answered there generally is a proximate causation, which is "just a policy statement that at some point a chain of events becomes too remote from the actual injury to impose any liability." He said that decision has been made by the Nevada Supreme Court "after careful consideration in the cases articulated [in Exhibit G]." Mr. Larsen stated the Nevada Supreme Court has concluded the furnishing of alcohol is too remote to be linked to the ultimate injury. He said the injury is "more directly caused by an intervening act, that is, the voluntary consumption of alcohol by an intoxicated person." Mr. Larsen stated the NRA is asking the Legislature to recognize and codify that policy in paragraph 1 of the proposed amendment (Exhibit H). He added paragraph 2 of the amendment is a "natural outgrowth of that policy" when it states, "No cause of action may be brought against the server or seller of alcohol...[for] proximately caused injuries inflicted by an intoxicated person upon himself or third parties." Mr. Larsen said the third paragraph of the proposed amendment (Exhibit H) addresses negligence. He said the common law was adopted in Hamm v. Carson City Nugget (1969), and has remained unchanged in the last 26 years. Mr. Larsen set forth the decision, "Violation of any penal statute...does not give rise to negligence per se...," against the server or seller of alcohol. He said the rationale behind the decision is, "If the Legislature intended to create a civil cause of action, they would have done so...and the penal remedy...is the sole and exclusive remedy intended by the Legislature." Senator Titus asked if there are regulations "on the books" which deal with serving liquor to an intoxicated person, other than a minor. Mr. Faiss stated there is a regulation directly applicable to gaming licensees which prohibits such action. Mr. Larsen added there are also county ordinances prohibiting that conduct. He said those regulations are taken very seriously by the gaming and resort industry. Mr. Faiss emphasized the bill does not release the seller or server from criminal penalties, fines and license revocation for violation of laws regulating the sale or service of alcohol. Senator Lee asked if an establishment which serves a minor who later causes an accident can be sued under present law for civil damages. Mr. Larsen answered, "Today, no... under the series of decisions we discussed earlier." However, he added, the establishment will face criminal liability under the local and state regulations. Mr. Faiss said the ultimate penalty will be loss of a gaming license. Mr. Cohen addressed the committee. He said he asked to appear because of his strong feelings regarding the proposed legislation. Mr. Cohen stated, "The bill presented to you is a bad bill...it is unenforceable within its very intent. All it will do will be to clog up our court system." He said this type of legislation will "open Pandora's box" for legal attack. Mr. Cohen said in today's industry, which includes 5,000-room hotels with bars and mini-bars, hospitality suites, and convention centers, the old days of "isolated mini-facilities" no longer exist. He said it is impossible to "police a guest" who sits in his room, empties the mini-bar, goes down and has one drink at the bar in the hotel, then goes out to his car. Mr. Cohen stated he is against drunk driving but added, "That is not what is before us." He said the issue before the committee is to try to "transfer responsibility from the individual to somebody else." Mr. Cohen asked, "If a juvenile goes into a stationary store, buys a can of glue, sniffs it and goes out and kills somebody...are you going to hold the stationary salesman responsible for that action? Of course not." Mr. Cohen asked, "Are we to paint a white line down the casino...or do we have breathylators at every bar...at every hospitality suite?" Mr. Cohen reiterated the responsibility is with the individual. He said the amendment on Exhibit H, tells visitors they are responsible for their own actions, and if they get into an accident, they are responsible for the damages which occur. Mr. Cohen said in closing, there is no way to determine "which drink caused the intoxication." He said it is an "impossibility" for a court of law to make such a judgment. Mr. Trounday stated John Ascuaga's Nugget maintains training programs in order to monitor minors who go to the property, as well as "taking care of anyone who may be intoxicated." He said all casino employees are trained in this manner. However, Mr. Trounday said, some of the customers stay in their hotel rooms and have drinks in those rooms. He said in that case the hotel has not served them one drink, but the customer may drive his car and cause an accident. Mr. Trounday asked if the Nugget should be held responsible, because the person was staying at the hotel. He closed by saying it is "virtually impossible" for the hotel/casino to monitor such a situation. Mr. Cohen and Mr. Faiss both referred to the Clark County Liquor Servers' Training Program, which certifies a person to serve liquor in an establishment. He said employees who serve liquor must attend that 4-hour training program. Kay Scherer, Vice President, Public Relations/Research Division, R&R Advertising, presented a display and played an audio tape, which demonstrates the "affirmative and dramatic steps the Nevada resort industry has taken to help prevent incidents of injury caused by intoxication." There was no further testimony to come before the committee, and the hearing was adjourned at 10:30 a.m. RESPECTFULLY SUBMITTED: Marilyn Hofmann, Committee Secretary APPROVED BY: Senator Mark A. James, Chairman DATE: Senate Committee on Judiciary June 5, 1995 Page