Red Flame, Inc. v. Martinez

DURHAM, Associate Chief Justice,

dissenting:

¶ 15 I respectfully disagree with Justice Russon’s conclusion that the Dramshop Act, Utah Code Ann. §§ 32A-14-101 to -102 (1999), is subject to the comparative fault principles of the Liability Reform Act, Utah Code Ann. §§ 78-27-37 to -43 (1996 & Supp. 1999). Based upon its sui generis nature and its complex purposes, I believe that the Utah Dramshop Act was intended to operate entirely outside the system of comparative fault established by the Liability Reform Act. Therefore, no cause of action for contribution or indemnity should lie on behalf of a dram-shop against an intoxicated person who causes injuries for which the dramshop is liable under the Dramshop Act.

¶ 16 The history of so-called dramshop acts, also known as civil damages acts, demonstrates that they have three basic purposes: (1) penal (intended to punish commercial servers of alcohol for the wrongful provision thereof), see, e.g., Wessel v. Carmi Elks Home, Inc., 54 Ill.2d 127, 295 N.E.2d 718, 720 (1973) (“As repeatedly stated by this court, the statute, as applied to a dramshop owner or operator, is penal in character.”); (2) compensatory (intended to provide compensation for injured third-party victims, often not available from financially irresponsible intoxicated drivers), see, e.g., Ascheman v. Village of Hancock, 254 N.W.2d 382, 385 (Minn.1977) (“The Civil Damages Act has been characterized as ... remedial in nature, its intent being to ... provide a remedy.”); and (3) regulatory (intended to impose some of the costs of alcohol-related injuries on the industry and to ensure adequate financial responsibility/insurance from industry participants), see Wessel, 295 N.E.2d at 720-21 (stating that state’s dramshop act provides basis of discipline that “may be of an indirect nature which arises from the owner’s or operator’s fear of cancellation of insurance or prohibitive premiums. These factors demonstrate that a substantial burden has been placed upon those engaged in the liquor industry.”). These purposes reflect significant public policy choices about financial liability for a widespread source of private and public ham — the damage done by intoxicated persons to third parties.

¶ 17 By contrast, the policies enshrined in Utah’s Liability Reform Act — compensation of injured parties and limitation of defendants’ liability to the share of the injuries directly caused by their acts — do not connect meaningfully with the concerns addressed in the Dramshop Act provisions. Although it is clear that compensation for victims is one purpose of the Dramshop Act, regulatory and penal purposes appear to have been paramount in its design, as demonstrated by subsections 32A-14-101(6) and (8) of the Dram-*545shop Act. Specifically, subsection (6) contains a cap on damages, both for individual plaintiffs and in the aggregate, for all plaintiffs injured in a single incident. The presence of the caps undermines the notion that the statute is intended solely to compensate injured persons. Although it may partially serve that function, the liability limitations in the statute suggest that it may also properly be viewed as punitive (with limits on the amount of the “fine”) and regulatory (assuring that dramshops can predict their exposure and obtain adequate insurance). Furthermore, subsection (8) specifies that “[njothing in this chapter precludes any cause of action or additional recovery against the person causing the injury,” Utah Code Ann. § 32A-14-101(8), suggesting that the Dramshop Act is in no way exclusive or preclusive in its compensation goals.

¶ 18 Considered in the context of its penal and regulatory nature, the Dramshop Act can function as it was intended only if it occupies a sphere entirely independent of that governed by the Liability Reform Act. Whereas the principles of the Liability Reform Act permit any defendant to escape or reduce liability where some other tortfeasor has caused injuries in whole or in part, the Dramshop Act clearly contemplates that a purveyor of alcohol must pay limited damages whenever there is intoxication causing injury. The Dramshop Act, by definition, contemplates injurious acts by an intoxicated person, who will of course always be liable for negligence. Since these acts in turn will always be more “proximate” to the injuries than the provision of the alcohol, imposing liability on providers as the majority requires will frequently be futile because they can mitigate their responsibility by comparing it to that of the tortfeasor. Stated differently, the penal and regulatory purposes of the Dramshop Act will be frustrated by permitting application of the comparative fault principles of the Liability Reform Act. I do not believe the legislature intended such a result when it enacted the Liability Reform Act.

¶ 19 This conclusion can be reconciled with our prior cases on the basis of their rationales. Rees v. Albertson’s, Inc., 587 P.2d 130 (Utah 1978), which permitted a claim for contribution based on common law negligence by an intoxicated person against an alcohol provider, was decided before the passage of the Dramshop Act. It acknowledged the propriety of common law contribution from a dramshop. However, as discussed previously, the Dramshop Act, unlike the common law, cannot logically be viewed to permit the alcohol provider to receive contribution from the intoxicated person; thus Rees has no application.

¶20 Likewise, this court’s past holdings with respect to the application of comparative fault principles under the Liability Reform Act to other forms of liability do not undermine the conclusion that such principles do not apply to the Dramshop Act. Mulherin v. Ingersoll-Rand Co., 628 P.2d 1301 (Utah 1981), and S.H. v. Bistryski, 923 P.2d 1376 (Utah 1996), stand for the proposition that strict liability, both product and non-product, is “fault” for purposes of comparison under the Liability Reform Act. It is significant, however, that the type of strict liability at issue in those cases was truly non-fault based. The statutory liability imposed on dog owners considered in Bistryski for example, does not require any negligent or wrongful act by an owner, just as strict product liability considered in Mulherin requires no wrongdoing or negligence by a manufacturer. In contrast, the Dramshop Act predicates liability on unlawful (although not necessarily negligent) acts because of its regulatory and penal purposes. The rationale for extending comparative negligence principles to product liability and “pure” strict liability cases strikes a logical balance between the goals of victim compensation and protecting “innocent” or non-wrong-doing defendants from an unfair share of responsibility. “Ultimately, the question of which damages distribution scheme to adopt amounts to a choice between fully compensating the plaintiff and proportionally assessing damages to the defendant.” See Lee A. Wright, Comment, Utah’s Comparative Apportionment: What Happened to the Comparison?, 1998 Utah L.Rev. 643, 581. Those choices are accommodated in the Liability Reform Act. However, the Dramshop Act is not concerned with the same balancing process. It seeks rather to use liability as an enforcement *546mechanism for responsible alcohol distribution, while at the same time providing (limited) sources of compensation for injuries associated with the industry. The extension of comparative fault principles to the Dramshop Act is not required by our prior case law and, I assert, was never intended by the legislature.

Justice STEWART concurs in Justice DURHAM’S dissenting opinion.

Justice STEWART acted prior to his retirement.